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Mobile Loyalty Marketing: Using Apps to Improve Customer Loyalty

Loyalty Marketing

The strength of a loyalty program relies on the sustained participation of active members. Programs without sufficient customer engagement do not gain repeat customers or increase revenues. This shows the importance of driving participation within these programs. Focusing on the number of active users is now becoming more important than just signing up new members.

Mobile Loyalty Marketing: Using Apps to Improve Customer Loyalty image mobileloyaltyChallenges of Loyalty Programs

According to Colloquy, while “loyalty program memberships rose almost 27% to 2.65 billion in 2012, active participation—those cases in which people redeemed rewards at least once a year—dropped to 44% last year from 46% in 2010”[1]. This shows that overall participation in consumer loyalty programs is declining despite the increase in total membership.

The offers/rewards associated and promised to consumers from loyalty programs are often not aligned with the initial interests that motivated a consumer to initially sign up. This is mainly due to the difficulty organizations have in correctly analyzing and synthesizing widely available consumer data, leaving them struggling and unable to clearly target customers with personalized interactions. This often makes loyalty programs boring and useless in the consumer’s eyes, driving active participation down quickly.

Using a Mobile App to Improve Loyalty

There are some ways to avoid getting caught in this situation. For example, create a mobile application associated to your business.

An easy to use mobile app drives customer participation and allows you to gather relevant information about your loyalty members. A good mobile app might deliver combined messaging technology with geo-location based, personalized push notifications. It can also present personalized content to consumers no matter where they are or what they are doing. This enables the delivery of a superior experience on an ongoing basis that nurturs customrs.

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These mobile apps target the essence of a customer’s SoLoMo (Social, Local, Mobile) behavior. SoLoMo smartphone technologies combine Geo/Social integration capabilities to gather data from Facebook, Twitter, LinkedIn, geo-locations. Many also integrate Passbook, the new digital wallet by Apple.

Furthermore, you can also differentiate yourself by building associated services into your app that add value for your customers. For example, retailer Old Navy built a mobile app that allows you to create a wish list and buy products directly from it. The app also has a gamified component that lets customers snap a photo of the Old Navy logo from printed ads or online videos to gain access to prizes like coupons or gifts. Another example is Walgreen’s mobile app, which sends prescription reminders and integrates with Passbook as a Rewards Card.

Mobile Engagement Matters

Loyalty programs today must first rely on mobile engagement that supports a positive, ongoing customer experience lifecycle, anytime and anywhere.

[1]Jargon, Julie. “Restaurants Are Turning to Loyalty Reward Apps to Lure Customers.” The Wall Street Journal. N.p., 12 July 2013. Web. 10 Sept. 2013. .

Comments on this Article: 3

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  1. Marie does a great job of laying out some simplexto implement examples of how businesses of any size can benefit from branded mobile apps to help with increasing engagement and loyalty.

    The key concept here to focusing active users, this can be measured as MAUs (monthly active users) as a key metric to monitor and focus on growing month over month.

  2. Alon Even says:

    Marie,

    I agree that using a mobile app can improve customer loyalty. But it’s not enough, since companies have to make sure that they deliver a good customer experience within their app, it’s totally different than experience delivered on their websites. So, if they deliver a poor custmer experience,it will definitly won’t improve their loyality. It’s recommneded to use in-app customer mobile analytics (like Appsee- http://www.appsee.com) enabling to measure, understand and improve the customer experience with the app.

    Thx,
    Alon

  3. Ryan says:

    Active participation rate of loyalty program in US is 44%. I think the rate is even lower in Hong Kong. Loyalty programs are easy to set up, but need efforts and patience to maintain. Some merchants view loyalty program as a quick way to get repeat purchase, rather than a way to build long term relationship.

    An App is a channel to communicate with customers and thus building customer relationship, but the main obstacle is to lure customers to download it and use frequently.

    Ryan
    http://www.build-loyalty.com

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