How to Make a Loyalty App
In the era of capitalism, the competition spins up every other week. Thus, many businesses face the problem of attracting new customers and turning them into loyal ones.
Did you know that almost 62% of consumers are loyal to 1-5 brands only? And if we take a look at what makes customers loyal to a certain brand, the opportunity to join a loyalty program takes 4th place after the product/service itself, price, and customer service.
Surely, there are a bunch of ways how businesses can deliver their loyalty programs to consumers. However, with mobile devices dominating the market & bringing the most traffic, many companies opt for an app. Additionally, 66% of businesses who experienced a lowering of customer loyalty don’t have a mobile app for their programs.
In fact, more than 70% of customers are more likely to take part in a loyalty program, provided that it’s easy for them to access rewards & loyalty cards from their mobile devices.
So, if you want to build an app for your business or get to know how to improve an existing solution with loyalty features — keep on reading!
🚀 How a Mobile App can Boost Your Loyalty Program
Having a well-thought-out loyalty program itself can be highly beneficial for your business. But with an app, you can boost these benefits as well as deliver additional value for your clients by improving customer experience.
Retention Rate & Engagement 🔄
Increasing the retention rate by 5% can boost your sales up to 95%, which sounds like quite a deal. Since loyalty features are one of the greatest ways to improve this metric, an app can help you go for an even higher retention rate than you have now.
First and foremost, with users having mobile devices on them for most of the day, you can improve visual recognition of your brand through the app’s icon, notifications, etc. In this way, customers are more likely to use a product of someone who they already know visually.
Moreover, loyalty programs are easy to personalize with the help of apps, which is one of the crucial factors for good retention rates.
It’s not only about using names instead of “You” or “Dear Customer”. The main potential you can exploit is tailoring your marketing campaigns, email or notification offers to each user’s needs:
- 91% of consumers would more likely opt for a brand that provides relevant recommendations and offers.
- 72% of customers ONLY engage with brands that offer personalization.
It shows us that users mostly stay with brands that offer a personalized experience.
A loyalty program in an app makes it easier for you to access users’ personal data, track their behavioral patterns and interests. Thus, it gives you the necessary tools for making data-driven decisions and personalizing the program for each customer.
Additionally, mobile loyalty features encourage customers to engage with your brand for a longer time.
For instance, a user wants to check if they have any new coupons in your app. Since they’re already here, they might as well redeem their daily points for using the app. But then, why not to spin a wheel of fortune since it doesn’t take much time.
Such dedication gives you more time to draw customers’ attention to your new events or discounts — whatever you need.
Our Expertise: Track Holodomor History
Recently, we’ve developed an App for the National Holodomor Museum in Ukraine. It allows users to learn about historic locations all over Kyiv with archival data — photos, videos, documents.
One of their objectives was to build loyalty among the existing audience and increase retention by providing visitors with digital content, based on their GPS-Location. Here you can check our case study:
Customers’ Data Insights 📲
The mobile app is your key to useful customer information. Later on you can use it for marketing purposes and address your target audience more consciously.
With an app, you can get to know:
- Family & others.
Surely, you can offer customers to fill in their profile with all needed information. However, you can also offer them to connect their Social Media like Facebook, Linkedin, Instagram, etc. (something that you know might have the details you want). It might be a good idea to offer a reward for the Social Sign-In.
Google Pay & Apple Wallet Integrations 💼
If you had a loyalty app that’s developed with the help of app builders, it’s likely that you can’t implement any third-party services into it. Yet, some of them might be extremely beneficial for your business.
In this section, we’ll take a look at Google Pay & Apple Wallet integration.
To use most of the features, you’ll need to have loyalty cards. So, if you’re not planning on getting such and not interested in this, feel free to go to the go to the next section.
Google Pay Passes, Loyalty Programs & Offers
Google offers companies to integrate their loyalty program solutions with their API for:
- Automatic enrollment across devices, which helps to prevent certain troubles such as forgotten passwords (for users) or missed potential conversions due to the sign-in process.
- Personalized offers. Users add your loyalty card to their e-Wallet and you can then analyze how they use it.
- Fully digital experience. All coupons, gifts, rewards, cards, etc., are issued, redeemed, and managed electronically.
To start working with them, you don’t need much:
- Check their API documentation section.
- Get API access.
- Integrate for testing purposes.
- Go live.
If you’re looking for experienced developers to support you with Google Pay API integration — feel free to contact us!
Apple can offer their customers something specifically for loyalty programs as well. For instance, you can use their Apple Wallet API for:
- Automatic loyalty card selection when customers pay at the checkout.
- Touch/Face ID card activation.
- Real-time updates and notifications.
- Offering enrollment into the loyalty program without having to download the app or give any details right after customers use Apple Pay.
You can learn more about Apple Wallet integration on their “Get Started” page. Also, we’re here to help you with Apple Wallet integration — just drop us a line.
Integration with your existing infrastructure 💻
It often happens that businesses want to integrate their loyalty apps with the existing digital infrastructure they use. In this case, you would likely have to go for a custom option since out-of-the-box solutions rarely offer such an opportunity.
Let’s say that you have a CRM with several customer lists that you want to share with the app. With a custom solution, you can embed the Admin Panel of your loyalty program into the CRM or set up data exchange between the Panel and the CRM.
🎁 Rewards & Loyalty Strategies
Basically, loyalty strategies are the heart of your app, the main tool for improving customer engagement and retention rate. It includes multiple features that you can combine to find the best fit for your use case.
In this section, we’re going to review top strategies you can use and specific details that you might want to pay attention to when building a loyalty app.
# 1: Points 💯
The points system is one of the most widely-used reward strategies that are effective for improving loyalty & KPIs. You can give users points for a bunch of activities:
- Achievements completion.
- Purchasing your goods and/or services.
- Spending a certain amount of money.
- Inviting friends. You can go further here and offer X% of the points that an invited friend would get.
- Being part of a loyalty program for a certain amount of time.
- Sharing on social media.
- Writing a review & others.
Additionally, points can be the basis for other features like rewards that clients can get by collecting points and then redeeming them or tiers.
Customers can exchange the points for merch, goods and services, discounts, coupons, etc.
To enable the points system in your app, you can use different APIs like Rewards API from Amazon, have your own loyalty currency with Currency Alliance API, or any other API that is designed for such purposes.
# 2: Achievements & Rewards 🏆
This loyalty feature is one of the most beneficial ones for businesses since you can shape customer behavior with the help of it. Meaning that by setting an achievement and offering a worthwhile reward for it, you encourage customers to complete it.
Achievements can include:
- Fill in an account.
- Social Media sign-in/email confirmation, which is a great way for you to access more detailed information about your customers for personalized marketing and better target audience understanding.
- Reach spending targets/number of purchases.
- Invite a friend.
- Leave feedback & others.
Be sure to rationally match the importance of achievement for you as a business with the reward that customers get. For instance, “Buy 3 cups of coffee” might be not as beneficial as “Invite a friend”, meaning that the stimulus for friend invitation should be more significant.
You can notice that some achievements are similar to the actions we listed when talking about the points system. It’s because they’re interconnected — a customer reaches a certain achievement, they get points.
Yet, achievements don’t necessarily mean getting points. You can give any reward for completing them:
- Free goods & services or discounts.
- Limited features on the app like an avatar, title, badge, emoji, etc.
- Loyalty boosts (double points for a week, for instance) & others.
As we said, points, rewards, and achievements are closely connected. Thus, we’d recommend you to think out how you’ll balance their interaction.
What we mean is that it might be a good idea to make certain rewards accessible by completing achievements only, other ones should be received strictly for points so users would pay attention to all of your loyalty features equally.
|Monobank: Case Study|
|Monobank is the first Ukrainian mobile-only bank that uses the financial infrastructure of Universal Bank.|
They have a system of achievement & stars. Once users complete an achievement, they get 1 star, which can be exchanged for monobank branded merch like T-shirts, hoodies, etc.
Also, we’d recommend offering some rewards for just being a part of your loyalty program and having the app installed. In this way, even if a user has low engagement with the features but has the motivation not to delete the app, you still can send personalized offers and try to retain them.
# 3: Stamps & Coupons 🎫
If you want to give users a convincing stimulus to get a specific product or service, or to make sure that they come back at least once, it might be a good idea to create a separate coupon screen where users will be able to manage this kind of Loyalty Campaigns.
The Screen can include:
- The list of available coupons.
- Additional information about the offer (if needed) and its expiration date.
- QR-code or just code for coupon redeeming.
- Marks for used/expired coupons. You can either recolor them (in gray) or remove them from the list.
Additionally, it can be beneficial for your business to have the so-called stamps system as part of your loyalty program — users get a reward for a certain number of repeated actions.
|McDonald's: Case Study|
|Let’s take McDonald’s coupons as an example. The company has an app where users can get vouchers for different kinds of bonuses. For instance, -25% for two cheeseburgers, or free coffee when buying Big Mac MacMenu.|
Additionally, they have an API that analyzes customer behavior and offers each client personalized coupons. Such a system allowed them to increase coupon usage by 150%.
This one is also great for tailoring your customers’ behavior. For example, if an average check is $7-8, you can give a Stamp for every $10 dollar spent at once, which can encourage people to “invest” $2 more so as to eventually get a worthy reward.
To enable these features, you simply need to create digital coupons or stamps with your development team and designers.
# 4: Tiers 🥇
Creating tiers (levels, ranks — whatever you want to call it) for the loyalty app can help you improve the retention rate and build long-term relationships with your customers.
You can offer better rewards and exclusive content with the increasing rank, which is a great way for keeping users engaged. Normally, mobile loyalty apps have the scale of a customer’s rank on the Home Screen — it strengthens the gamble of leveling up.
Thus, to level up customers need to reach a milestone. For example, you can gradually guide your customers from a 3% to 10% discount with milestones at 5% and 7%. This is a win-win situation.
|Marriott Hotels: Case Study|
|A great example of such a “tiering” system offers a world-wide net of hotels and resorts Marriott.Their system is based on a number of nights that individuals spend in any Marriott hotel per year. For instance, 0-9 nights/per year — “Member”, 10-24 nights per year — “Silver Elite”, and so on.|
The higher the tier is, the better rewards are — they vary from an enhanced Internet access to late checkouts.
For greater user engagement, you might give rewards for upgrading the tier. It can be anything from points to coupons and unique in-app gifts (avatars, emojis, etc.).
In terms of the development process, your Tech Partners most likely can take it up — third-party providers or APIs are optional here.
# 5: Leaderboards 📄
Leaderboards are another great way to keep users engaged and create a feeling of the need to be, roughly speaking, more loyal than the others.
Naturally, you can offer incentives and benefits for those who are at the top to keep customers motivated and engaged.
But here’s the thing. It can be somewhat unfair that newbies would be on the same list with regulars who are using your products/services for several months.
So, what we suggest you can do is make several leaderboards for each group of customers divided by the time they joined your app. Per se, it can be:
- 1-3 weeks.
- 7-9 and so on.
In this way, you can create a never-ending flow of customers on the leaderboard with a more or less fair system of evaluation. Surely, those who are on the 3rd week of their journey with your company still have higher chances of being at the top, compared to those who joined a couple of days ago, but isn’t it the point though?
# 6: Digital Loyalty Cards 💳
If you want your customers to be able to have financial interactions with your app (like, having a loyalty currency or adding banking cards to the in-app wallet) or enable FinTech features, you might need to use BaaS providers services.
These are companies with a ready-to-use financial infrastructure that you can implement into your app or website with their API, without having to set up your own.
You can offer:
- Digital loyalty cards issuing. With this feature, users can easily access their discounts, get points for purchases or even use your in-app currency (points) to pay.
- In-app wallet where customers can attach their debit, credit, and loyalty cards.
- Purchase history.
- NFC tags.
- QR-code payments & others.
Actually, we have an article dedicated to choosing a BaaS provider for your use case, so if you feel like it might come in handy, here’s the link:
# 7: Extra Strategies ✅
In this subsection, we’ll review some additional features that you might want to add for a better customer experience, yet, they’re not as widely used as other ones.
# 1: Purchase History
This feature is intended to make future purchases easier for customers so next time they are on your app, goods or services that they bought the last time or purchase the most will pop up on the Home Screen.
Moreover, it might be a good idea to allow them to save the items to the “Favourite” list or choose permanent preferences so that the search engine won’t offer irrelevant products to them.
Depending on the type of your product (selling goods or providing content), you might offer users to create their own lists with products for a more personalized experience.
# 2: Wheel of Fortune
You can set up a daily/weekly/etc. wheel of fortune to encourage users to visit the app on a regular basis.
It works really well on a psychological level since a good gamble thrills the human nervous system, which can help you retain customers and, maybe, even prevent them from giving up using the app.
Moreover, you can use this feature as an additional monetization model. Many businesses offer users to spin the wheel one more time for free if they watch an advertisement (that they’re paid to place there).
However, if you’ll use this feature, make sure to find a balance so the app doesn’t turn into the playing field or is unprofitable because you give away too many rewards and discounts. Remember: the end goal is to improve brand loyalty, not to entertain customers at any cost.
# 3: Shake-to-Pay
If you have a brick-and-mortar place for users to come and purchase something, you might want to add such a technologically-advanced payment method as shake-to-pay.
This feature can work in different ways. If we take Starbucks, they offer their customers to shake their device for the barcode of the Starbucks card to pop up.
Even though the feature is called Shake-to-Pay, the last component of this phrase can be functionally tailored to your use case.
📊 Admin Panel for Loyalty Apps & Strategies
To digitally manage the processes regarding your loyalty program and overview statistics, you’ll need a sort of dashboard with access to all features.
This feature can include:
- New members registering.
- Personal details accessing and changing. For instance, if you need to connect a user’s phone number to their account, it’s important to be able to do it manually from the admin panel. Especially if you have physical branches.
- Events and campaigns management.
- Loyalty strategies updating & management.
Another essential part of this screen is analytics. It’s important to ensure that you can measure how successful (in all respects) the project is, which implies: total revenue, revenue over a time span, a total number of users, new users, active users, retention rate, average time spent in an app, and other KPIs that are important for you.
🤖 Tech Stack for the Loyalty App Development
Even though most of the features can be built without using third-party APIs, there are many time-saving options on the market that you can implement into your custom loyalty app:
- Rewards API, Currency Alliance API for the points system.
- To enable rewarding, you can use RewardOps, Codemojo.
- For digital stamps and coupons, you can integrate Stripe, Coupons API from Paymentwall, MagicStamp.
- For digital loyalty cards issuing or other FinTech services: SolarisBank, Railsbank, Marqeta, etc.
💰 What Affects Loyalty App Development Costs
It’s necessary to correctly calculate the cost of building a loyalty app to prevent troubles such as lack of financial means in the middle of the development. However, it’s quite a challenge and a matter of luck to predict the exact amount of costs since each case is unique.
Yet, there are a couple of factors that you should consider when planning the budget:
- Complexity as well as a number of features.
- Chosen technology.
- Third-party integrations (if you need such).
- Hourly rate of your development team.
A mobile app for your loyalty program is a great complement that can boost the benefits you get from having such a program.
Additionally, it allows you to use more extended and digitally advanced loyalty strategies, access more detailed information about your members, and generally provide a better customer experience.
Additional, we’d like to give you 3 main recommendation for loyalty app development that we know from our experience will be relevant for any business:
- Be user-friendly regarding your UI/UX design.
- Be consistent. Make sure that the app corresponds to the general mood and style of your brand.
- Be flexible. Try different kinds of loyalty programs, combine them to finally define what works best for your use case.
If you need any help with the development or have some questions left, feel free to contact us. We’ll find a way to help you!