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Use Apps to Enhance Your Loyalty Program Published-May 4, 2015
Market research shows an existing customer is likely to spend 67 percent more than a new one. And with the vast majority of customers owning smartphones, it's no surprise business owners are turning to mobile apps to increase customer loyalty. According to Oleg Urminsky, Associate Professor at the University Of Chicago Booth School Of Business, mobile-based customer loyalty programs for businesses "can make a lot of sense as consumers are paying attention to these things."

When choosing a mobile-based application to increase loyalty, you need to make sure it's easy to use and that customers can track progress towards a goal. Consider applications that help customers earn points more quickly and increase shopping frequency and amount of sales.

Keep it Simple
When smart phones first came out, says Urminsky, people would download almost any app, just to have them. "Millions of apps are now available so folks are more choosy. It's seen as a hassle. So casual customers are less likely to download, but that casual customer is the one you want. Make sure your app is as painless as possible to download and use. Be sure to give very clear feedback on how much further a customer has to go to earn a reward."

Show Progress
Showing customers how close they are to earning the next reward motivates additional purchases. But often a customer won't go to an individual store frequently enough to earn a reward in a reasonable amount of time. "Outside of a coffee shop, most customers do not frequent an establishment more than once or twice a month," says Miami, FL-based Matthew Levenson, CEO and co-founder of Moocho, a mobile payment app that works to build loyalty to the application as well as the business. "At that rate, it would take 4.5 months before you get a free item."

Load Points
Using a mobile payment app like Moocho can help merchants drive customers in more frequently. When a consumer is shopping and using Moocho, every $5 spent at any participating business gets a mooch. "Customers can then redeem mooches for free items at any store," explains Levenson. "On the merchant side, with every $50 spent by any Moocho customer, for example, we will release one free cup of coffee into the app. It works so that it's a marketplace."

Drive Loyalty
Mobile apps linked to your business can also help retailers, for example, segment, optimize and customize communications. Using data collected from the application, you can tell what folks are buying, when, and how frequently. "Once you shop at an individual store," says Levenson, "we break you into a repeat or lapse customer. If you are a repeat, we send out weekly specials and events and then try to get your average basket size up. If your average is less than $30, then you will see offers, like spend $50, get 10% back. Next will say spend $100, get 10% back. If you stopped going altogether, then we would try to be more aggressive."

Find the Right Fit
The data collected from mobile apps can also help you track your return on investment. Urminsky suggests you experiment with loyalty programs and quantify the results. "Track the data and see what the effect is. For different businesses, a program can have a different effect, so make sure it is the right fit."

No matter the business, choose a mobile application that is simple to use, shows clear progress towards rewards, and helps points accumulate more rapidly to build loyalty and increase sales.

 
Sourced By: itbusinessnet.com

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