The rise of Loyalty Apps: What should you be doing for your customers?

Having been in the business for over 20 years, we have always kept an eye on what retailers are doing in terms of their marketing strategies to keep on top of the game.

Over the years, there are plenty of examples of how retailers have delivered a loyalty scheme badly. However, with increasing competition on the high street comes innovation from the likes of supermarkets redefining what loyalty means. And, in the case of Sainsbury’s, the need to revamp their tired and confusing Nectar Loyalty Card to boot.

Recent surveys have shown that there is now an even greater expectation from loyalty programmes for consumers, with 79% expressing that they prefer to shop with retailers that offer a loyalty programme over those that don’t.

There has been a real change in the nature of how such programmes work. Many have now changed from the traditional point-based schemes that reward a chosen few who have managed to accumulate enough points to make redemption worthwhile, to “rewards programmes” where every shopper feels a benefit.

What makes a good loyalty scheme?

There are so many things that make up the characteristics of a ‘good’ loyalty scheme. Just a few common to all good loyalty schemes include:

• Rewards that offer instant value
  A customer likes to be rewarded for making the choice to shop with you there and then. Collecting points and reaping the rewards many months down the line might not cut it for them anymore. In the style of Tesco’s Clubcard, they want to see discounts and offers for them there and then, without the need to wait.

• There is product or service/event exclusivity
  Even using the term ‘exclusive’ will make your customer feel special. Giving them the VIP treatment by only offering that product or service to THEM instead of anyone who might walk in off the street will retain their loyalty for visits to come.

• Saves the customer money
  Irrespective of income, everyone likes a deal, even more so in these tougher economic times. Customers are constantly on the lookout for a saving. In years gone by, buy one get one free offers, for example, would tempt people to buy the product even when it wasn’t on their shopping list. Now, people are actively seeking out the cheapest shopping basket or the best offer on the high street by researching the competition before they buy.

Why choose to launch a loyalty app?

The rise in popularity of loyalty schemes alongside the rise in mobile phone usage over the last 10 years go hand in hand. It’s hard to find anyone who doesn’t have at least one app on their phone, whether that be Candy Crush, Instagram or a loyalty app for their favourite store.

Loyalty apps make a lot of sense. As a nation whose phones are constantly in our pockets, on our desks or in the palms of our hands, we seem to have combined everything into one device. Apple pay means we no longer carry our cards, the calendar feature has made our diaries redundant, and it’s probably difficult to remember when you last used a physical calculator.

Having a loyalty app instead of a physical plastic card is not only better for the environment, but also means it’s never left at home in a purse or in a drawer.

The convenience of ‘loyalty on an app’ provides ‘stand-out’ benefits including:

• Loyalty rewards are automatically applied
  You can schedule vouchers and offers to appear on an app, and update these in real-time should they be used or updated.

• They’re personalised and therefore reinforce exclusivity
  Offers can be personalised by monitoring the customers’ spending habits or location, so you know that they will not only use the offer but feel the sense of appreciation that they are a VIP.

• Easy to access and understand
  Having everything in one place means your customers have all the terms and conditions, expiry dates and details needed for them to use their rewards. They don’t have to check your website or delve into their inbox looking for any further information.

What are the benefits of a loyalty app to you as a retailer?

Not only are the benefits much greater for your customers, but you have to think of the ROI for you as a retailer too. Launching a loyalty scheme, either in-store or through an app, does cost money initially, as well as your time and effort in getting it right, but will repay its investment within months.

There are many benefits for retailers of implementing an app-based loyalty scheme though. These include:

• Higher customer satisfaction as you surprise and delight your customers
  Using an app means you can notify your customers of new offers, vouchers or deals whenever you like simply by setting it up in the back end of the system and sending out a notification to let them know.

• Higher uplifts in marketing response when compared to email and printed media
  Without delving into facts and figures, think of how often you pick your phone up during the day. It is probably much more than you’d like or even realise. When you’re sent a notification, you will at least glance at it, even if to swipe it away rather than engage with the content. The message will never be missed or mass deleted like it could be in a daily email cull.

• Improvements in overall profitability as App penetration increases
  There are hard commercial benefits with 20% uplifts in Average Transaction Value and 50% greater lifetime value spends being typical, but it is important to recognise that you can build a great customer experience beyond that of your online and ‘bricks and mortar store’ by being able to personalise content for your customers.

So what do I need to be doing for my customers?

In summary, loyalty programmes are not in decline but many do need to change to meet the higher expectations of the consumer. You might already have a loyalty scheme in place which works for that small group of weekly shoppers who can see their points accumulating, but reaching the less frequent shoppers who may be in a younger demographic and will spend more with you in the long run can be easy too.

Mobile loyalty apps are the perfect medium to deliver such changes.

As we look forward to a new year, January is the perfect time for Garden Centres to implement changes ready for the busy Spring season. Have you thought about how you can transform your Garden Centre business digitally?

If you’re a Garden Centre that’s looking to identify significant profitable growth opportunities, but you’re not sure exactly where to start, we can help.

I’d like to invite you to have a free, interactive discussion with myself, Mike Anderson, MD of Redfish Group, and our senior marketing team, to focus on your business now and where you’d like to take it. This comes with no obligations, but will be insightful, thought-provoking and provide something to action as a priority. If you know anyone who might be interested, please feel free to send me a message or email us at info@redfishgroup.co.uk.

Read more about our offering for Garden Centres and download our insights guide here: Garden Centres – Redfish Group

Sources:
A recent survey by eMarketer found that 79% of consumers said they were more likely to choose a retailer that offered a loyalty program over one that didn’t. 
According to Accenture, 75% of customers are more likely to purchase from a brand that recognises them by name, recommends products based on past purchases, and can personalise their experience – all of which can be easily achieved through a loyalty program.
A Capgemini study also shows that 63% of customers prefer loyalty programs that offer exclusive access to products and services. 
A Salesforce report shows that automatically applied rewards are the top reason why global consumers would use loyalty programs more frequently