Loyalty card programs were first introduced in the early 1980’s to help nurture a customer base and offer something back to them in return for their loyalty. But don’t get the wrong idea and think that they are now out-of-date. In fact, with recent developments in mobile technology a loyalty card app is now easier to implement and can be more affective then ever at creating repeat customers and increasing loyalty.
Paired with the advantages of mobile devices, these programs represent a huge untapped opportunity for many businesses. Simply put, companies are now able to place their loyalty cards in the one thing that people can’t be without, their mobile phones.
How a Loyalty Card App Works
For most restaurants, bars, retail stores or business that see frequent purchases the reason to implement a loyalty program is to keep their customers coming back to their business instead of checking out a competitor or alternative service. To achieve this you apply a simple formula: offer them something in exchange for their loyalty and repeat business.
Let’s break down how this works:
A restaurant offers a free appetizer to customers who have purchased 5 entrees:
- The customer is excited to receive a free appetizer and may come to dine at this restaurant more frequently in order to attain their 5 entrees. They feel special and that they have achieved a goal when they redeem their free reward of the appetizer.
- The restaurant will benefit from their customers coming in more often, and even when they are giving away their free appetizer they are more than likely to see some additional revenue when these customers order accompanying drinks, entrees or desserts to pair with their appetizer.
A bakery offers a reward of 6 cupcakes to any customer that has purchased 3 full-sized cakes from them in the past 12 months:
- The customer now has the incentive to do all of their cake shopping over the course of a year at the same bakery. They will now look forward to purchasing their 3rd cake in order to receive their free bonus of 6 cupcakes.
- The restaurant will now see an increase in customer loyalty as these customers return to them for all of their cake needs. They will also benefit from their customers coming in more often and seeing the other items they sell in the bakery, such as a customer noticing they also make custom cookies that would be perfect for an upcoming baby shower.
Decide What to Offer Your Customers for Rewards
Deciding what to offer your customers for their rewards in your loyalty program will depend on the type of business and industry you are in as well as what you have at your disposal. You don’t want to give away too much and put a strain on your business but you also don’t want to come off as being too cheap or stingy. There is a good balance that will benefit your business as well as your customers.
To help find this balance, you need to determine what is the most important thing you’d like your company to gain from your loyalty program. Is it to get customers to spend more money per trip to your store? Or is to get customers back to your store more frequently? Or is it important for your brand and culture to be seen as a company that treats its customers well and offers great rewards and bonuses?
Determine what you would like your program to achieve and what benefits it should provide. Build your rewards and offers to follow this plan and remain focused.
Creating New Business Through Repeat Customers
The ultimate goal of a loyalty card program is to get customers to buy something from your business even when they don’t necessarily need to. To see what we mean by this we can look at the restaurant and bakery examples laid out earlier in this article:
- Restaurant: A family decides to go out for dinner at this restaurant and redeem their 5th entrée even though they have groceries to make something themselves at home. They are enticed by the idea of attaining the 5th and final entrée and being able to receive the appetizer reward that they have earned.
- Bakery: A mother decides to pick up a cake from this bakery for her upcoming 4th of July barbecue instead of getting something cheaper at the grocery store. She has already purchased one other cake from the bakery this year and she knows this second one will get her closer to redeeming the free cupcakes on her next purchase.
The common idea in these two examples is that the customers have started to feel the allure of achievement in attaining their free offer. They feel like they are going to make purchases like these anyway so why not be rewarded for them. A well-executed loyalty card program will create this sense of accomplishment and give customers the idea that they are working towards a goal.
Spread the Word
Making sure customers know about your program is very important for it be a success. You need to determine the most efficient way for new users to learn about and add your mobile app so they can participate in the program.
Your employees can be your best ambassadors for the program. Make sure they understand the program fully and are able to relate its value to customers and help them get the app installed. At many retail stores, cashiers will ask customers during the checkout process if they want to sign up. This kind of model can work very well as it is at the point of purchase, but it isn’t for all business types, especially in places where it can cause back-ups or long lines. Find the best fit for your company and make it as simple as possible for your customer to get started.
Along with your staff and in-store methods you should be using your e-mail, newsletters, website and social media accounts to help promote your program. Provide information on the details and benefits of your program and how new users can join (by downloading your app). Include screenshots of your app and the loyalty card pages along with a link to the app store(s) so they can easily get the app on their phones and start working toward their rewards.
Keeping it Fresh
An important aspect of any loyalty card program is to keep customers eager and excited about the program. Frequently updating and changing the program to offer new items and rewards can help to achieve this. The restaurant example can start to offer a free dessert instead of an appetizer after 5 entrees have been purchased, or the bakery can reward a dozen cookies to customers who have purchased six-dozen cupcakes during a year.
It is important to keep the loyalty program fresh and not let people start to feel like they have redeemed their reward and now they are done with your business. Along with changing the deals and rewards you can use tools in your mobile app to create multiple loyalty offers at the same time. This way your customers can always have something to look forward to and they will continue to see a trip to your business as a step toward their goals.
Interested in creating a custom loyalty card app for your business? Give us a call at 1-703-914-0770 or email us at email@example.com to get started with Lume Apps.