Loyalty programs are an integral component of the mobile marketing landscape, going beyond awareness-building and one-off promotions to drive sales by enabling ongoing communications, relationship-building, and value generation with customers. This article discusses the role loyalty programs play and defines the five existing types of mobile loyalty apps available to brands.
While they come in many variations, the core of all loyalty programs is to establish an ongoing framework for learning more about customers, influencing their behavior, and providing them with added value in return. The information gathered through loyalty programs, including both opt-in profiles and user activity tracking, helps the company provide a more relevant and competitive experience, increasing retention and lifetime customer value. For companies, this information also enables targeting to increase the value of advertising inventory. Once customers have been recruited into the loyalty program, their behavior can be influenced through targeted coupons and incentives that reward actions such as purchases, upgrades, downloads, customer referrals, new feature usage, and prompt bill payment, as well as providing additional profiling information. An effective loyalty program thus results in a higher value relationship for both the business and its customers. Below are five examples of how brands are leveraging mobile loyalty programs to make a difference in their bottom line.
1. Loyalty card aggregators: Key Ring, CardStar, Loyalty One
a. Enable customers to scan in or manually input cards
b. Consumers can sign up for participating programs from the app
2. Locationâbased apps: Foursquare, SCVNGR, Shopkick, Belly
a. Enable customers to check-in or scan in to earn rewards
b. Rewards are set by the merchant, users check-in or scan to earn them
3. Discount and deal apps
a. Groupon rewards
b. Enables users to unlock deals by making purchases at a given merchant using the credit card linked to their Groupon account
c. Merchant set rewards based on spending caps
4. Mobile payment apps
a. Square, Google Wallet, LevelUp, Paycloud
b. Eliminate the need for credit cards or cash
c. Digital receipts, analytics, loyalty tracking
5. Digital punchcards
a. Perka, Punchd
b. Users collect stamps redeemable for rewards without the paper loss
c. Merchants can set up more than one offer with Perka
Businesses and organizations want to strengthen and improve customer relationships, and customers want the most value for the least amount of money. However, customers will remain loyal to companies that can enhance the user experience and foresee their needs. A mobile loyalty program in many ways achieves this.
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