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Loyalty Programs for your Mobile Apps
Keep them coming back by implementing effective customer loyalty programs
In this week’s newsletter, I’m talking about loyalty programs for your mobile app and explaining the benefits and why these are useful.
Hi 👋, Rommel here! Welcome to this week's newsletter. Each week I share some tips and knowledge about mobile product management. Did you miss last week’s post? In case you miss it here’s the post from last week:
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Loyalty programs are becoming a normal feature for mobile apps as businesses try to reward their customers and encourage users to continue using their products and services.
Loyalty programs aim to incentivize customers to stay loyal to a particular brand by offering rewards, discounts, or exclusive access to features or content. This is an important way to increase customer retention and continuously drive revenue to the business.
This is proven as one of the most effective ways for increasing revenue and inspire customer loyalty as well. According to a 2020 Yotpo poll, 68% of respondents said they’d join a loyalty program for brands they like. As you can see there’s a lot of potential with this and plus its benefits to the business.
Not all loyalty programs are the same. There are different types of it here’s the list below.
List of Loyalty Programs
✴ Point-based Loyalty
This type of loyalty program is the most common one, with this loyalty program you let your customers earn points for every purchase and they can redeem those points for rewards or discounts.
For consumers, these programs provide a sense of accomplishment and recognition for their loyalty. They also offer a tangible reward, which can be motivating for some customers.
For businesses, this type of loyalty program can help to build a strong customer base by rewarding customer loyalty. It also provides data on customer purchasing habits, which can be used to tailor marketing efforts and improve the user experience.
A loyalty program like this is suited for brands that encourage frequent or short-term purchases. Remember it’s important to carefully consider the costs and benefits of such a program and to ensure you are offering sufficient value to your customers in order to make this program work.
✴ Tier-based Loyalty
This is a loyalty program where customers see different program benefits depending on their rank within the program, with each tier offering a different set of benefits and privileges.
One of the main advantages of this is that it allows businesses to reward their most loyal customers with exclusive perks and benefits. Oh and it can also drive customer behavior, customers may be more likely to make purchases to earn points which will help them to reach a higher tier and gain access to more benefits.
By offering exclusive perks and benefits to your most loyal customers, you can create a sense of exclusivity and can drive more engagement on your product.
✴ Paid Loyalty
Paid loyalty or fee-based loyalty programs, requires participants to pay a recurring or one-time fee to access member benefits. Depending on the program, the fee can range from a few dollars per year to hundreds of dollars. This can be a significant investment for some consumers, especially if they are not sure if they will be able to take advantage of the benefits enough to justify the cost.
In order to make this work the provided benefits should clearly outweigh the fees, and provide members-content only to maintain exclusivity.
✴ Value Loyalty
This type of loyalty is designed to build a strong connection with your customers by aligning with their values. Unlike traditional loyalty programs that offer rewards to customers, a value-based loyalty program does not directly benefit the customer. Instead, the rewards are used to benefit society as a whole.
This can be done by donating a portion of purchases to charitable or welfare causes. Customers are given the opportunity to choose from a variety of charities or may select one that aligns with their personal values.
Some businesses may choose to implement a hybrid loyalty program that combines elements of both traditional and value-based programs.
Choosing the Right Loyalty Program
In order to choose the right program you gotta know first who are your customers, how they are buying, and what motivates them. You also need to align it with your business goals, the rewards you choose have a direct impact on how users engage with your product or service. In Summary:
Who are your customers
How they are buying
What motivates your customers
By knowing all these you can easily decide what kind of loyalty program is a match for your product. And if it seems your strategy is not working don’t forget you can always try a different approach, do experiments and continue iterating.
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Until next week, Thank you for reading! Have a great week