From Punch Cards to App-tastic Rewards: The Power of Mobile Loyalty Programs

Have you ever had to carry a wallet full of punch cards, trying not to lose or forget them amidst the chaos of everyday errands? Thankfully, the days of physical punch cards seem to be a thing of the past. With the ability to unlock rewards with one finger tap, mobile loyalty programs have irreversibly revolutionized customer experience. Today, it's all about convenience, personalization, and loyalty rewards at customer’s fingertips.

In this article, I will delve into the benefits of having a loyalty app, unfolding the secrets behind successful mobile loyalty app programs. I will also show you how Voucherify can help you launch a mobile-first loyalty program, tailored to modern customers’ expectations.

What are mobile loyalty programs?

Mobile loyalty programs refer to reward programs offered via mobile apps. With a loyalty app, users can earn points, unlock exclusive discounts, receive personalized offers, and access special perks, all through their mobile devices. This way, the entire customer journey, from product browsing to checkout, can be completed with just a few smartphone taps which is a big plus compared to website-based or offline loyalty programs.

Does your brand need a mobile loyalty app?

Loyalty apps can be effective in a wide range of industries, but they tend to work particularly well in the following sectors:

1. Retail

Loyalty apps are commonly used by retail brands to enhance customer engagement, offering personalized discounts, rewards, and exclusive offers to loyal customers, fostering brand loyalty and increasing sales.

2. Food and Beverage

Restaurants, coffee shops, and fast-food chains often utilize mobile loyalty programs to incentivize frequent visits and customer retention. These apps may provide points for each purchase, offer free meals and/or drinks or even discounts based on the amount of previous orders, allowing the customer such features as skipping the line, BOGO deals and many other perks.

Learn more: The Secret Recipe for QSR Loyalty Programs.

3. Travel and hotels

Loyalty apps are prevalent in the travel industry, including airlines, hotels, and car rental services. These apps typically offer rewards, such as free flights, room upgrades, or priority services, to travel aficionados. They can also provide personalized recommendations, travel itineraries, and exclusive deals to app users.

Learn more: Loyalty in the travel industry.

4. Fitness and wellness

Gyms, fitness studios, and wellness centers often employ mobile loyalty programs to motivate and engage their members. These apps may track workout progress, provide personalized training plans, offer rewards for achieving fitness milestones, and allow users to book classes or appointments at their convenience.

Why should you offer a mobile customer loyalty program?

Mobile loyalty programs offer a range of benefits to both businesses and customers, including:

1. Increased convenience

By offering a mobile app version of your loyalty program, customers can easily access their account, track their rewards, and redeem offers from using their mobile devices anytime and anywhere.

2. Enhanced engagement

A mobile loyalty app provides yet another direct touchpoint for your brand to engage with customers. You can send push notifications, in-app messages, and personalized offers, increasing customer interactions and encouraging repeat visits or purchases.

3. Improved customer experience

A dedicated loyalty app allows for a seamless and user-friendly experience, providing customers with quick access to their loyalty information, points tracking, customer wallets,  rewards catalog, and exclusive offers.

Learn more: How to enhance the UX of your loyalty program?

4. Data insights and analytics

A mobile app collects valuable data on customer behavior, preferences, and purchasing patterns, offering insights to optimize your loyalty program and marketing strategies. This data-driven approach enables better customer segmentation and targeting for improved results.

5. Higher customer retention

A loyalty app with personalized rewards and special offers creates a sense of exclusivity and appreciation, reducing the likelihood of churn. It incentivizes customers to continue engaging with your brand on an everyday basis via smartphone screen.

6. Competitive advantage

Offering a mobile app version of your loyalty program sets you apart from competitors who may still rely on traditional loyalty methods, attracting tech-savvy customers seeking a modern and convenient experience.

The key features of successful mobile loyalty programs

Some people tend to say that haste makes waste. The same goes for mobile loyalty programs. Before you decide to jump straight into the mobile loyalty app, consider the following features your app should offer:

1. Points and rewards

Make it easy for your app users to earn loyalty points for their purchases or specific actions, ensuring the clarity of your validation rules, allowing customers a hassle-free option to redeem their rewards such as discounts, free products, or exclusive perks.

2. Rewards catalog

Think about implementing a landing page dedicated to a catalog of available loyalty rewards that customers can choose from, providing them with a quick and easy way to redeem earned points.

Take care of app-tastic rewards such as exclusive deals, promotions, or discounts available only to loyalty program members, incentivizing repeat purchases and increasing customer satisfaction.

3. Mobile loyalty cards

Allow customers to conveniently access and use their loyalty information, paying attention to the visibility of customers’  digital loyalty cards stored within the mobile app.

4. Referrals

Encourage your customers to invite their friends and family to the loyalty program, by creating a seamless in-app referral program process, engaging both loyal and new customers.

5. Social media integrations

Ensure a smooth integration with social media platforms which enables customers to share your loyalty program details, enhancing program visibility and creating a buzz among social media users.

6. Push notifications and in-app messages

Keeping your in-app users informed about new rewards, special events, or personalized offers, sending them targeted push notifications and in-app messages.

7. Gamification elements

Spice up your app with gamification elements, such as challenges, badges, or leaderboards, to make the loyalty experience more interactive, enjoyable, and motivating for your customers.

8. Easy payment options

Secure a seamless integration with customer wallets and popular payment platforms, allowing customers to make easy and convenient payments with just a few finger taps.

9. Loyalty tiers

Consider implementing a tiered loyalty structure where customers can progress to higher levels based on their engagement or spending, unlocking additional benefits and rewards as they move up the tier ladder.

10. Optical Character Recognition (OCR) features

Utilize OCR technology allowing your customers to scan and capture information from receipts or barcodes, enabling them to earn points for offline purchases.

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10 examples of the most popular mobile loyalty apps

Now that you've become familiar with the staples of mobile applications for loyalty programs, remember to keep your ear to the ground. Since the market is bursting with mobile loyalty programs, it’s always a good idea to keep an eye on the market. Below, you can find a brief overview of the most popular mobile loyalty programs with a list of their pros and cons:

1. My Starbucks Rewards loyalty app

Rating:  Google Play: 4.9/App Store: 4.2

My Starbucks Rewards is a successful in-app rewards program, mainly thanks to its design and functions:

• A minimalist design where the collected points, tier level, and all other functions are immediately visible. This clarity contributes to smoother customer experience.
• The app has an order-ahead (skip the line) option that lets loyalty members order ahead of normal customers. This option saves them time and gives a touch of exclusivity.
• Customers can place orders and pay digitally, without human interaction, which makes the process more efficient.

Advantages compared to other mobileloyalty programs:

• Customers can access points anywhere and auto-refill their Starbucks digital wallets.
• It is possible to redeem gift cards and to order ahead in the coffee houses.
• Upon enrolment, customers can immediately access all the above-mentioned features.

2.  Designer Shoe Warehouse (DSW)

Rating: Google Play 4.2/App Store 4.9

The DSW mobile app achieved a great success with over 500,000 downloads in Google Play and 4.9 star rating in Apple Store.

• Customers can find the nearest store or check the number of loyalty points on the starting page.
• Customers can scan barcodes of products to access information about stocks and product reviews.

Advantages compared to regular loyalty programs:

• Customers can access their points anytime on their smartphones.
• Customers can redeem vouchers using the loyalty app without using any physical coupon or card.
• Members receive personalized offers before, during and after shopping in DSW stores.

3.  Sephora Beauty Pass

Rating: Google Play 4.4/App Store 4.8

Sephora runs various loyalty programs across the world – with each variation connected with slightly different benefits and features.

While using Sephora's loyalty app isn't mandatory to benefit from Sephora Beauty Pass, there are certain bonuses customers won't get without the app:

Sephora Beauty Pass is available both on the web and in the app. It comes with three tiers – the first – White – is available for everyone, but higher levels – Black and Gold respectively – require spending a certain amount of money in Sephora online or in local stores.

Each purchase grants points ($1 dollar spent equals 1 loyalty point), and with at least 300 points, the Beauty Pass participants automatically advance to the Black Tier. The Gold Tier, though, is available for those who reach the 1,500 points milestone:

4.  Lidl Plus

Rating: Google Play 3.3/App Store 4.7

Lidl grocery stores are especially popular in Europe – that's where the company offers its customers an app-oriented loyalty program called Lidl Plus. Lidl Plus offers exclusive discount coupons available only within the app. It also works as a digital loyalty card – customers can scan their phone instead of a physical card during the checkout process.

Advantages compared to regular loyalty programs:

• Instant access to exclusive offers.
• Additional coupons for Lidl lotteries to increase program gamification.
• Digital copies of receipts.
• Lidl Plus participants may return bought goods up to 30 days after the purchase.

5. H&M Club mobile loyalty app

Rating: Google Play 4.4/App Store 4.8

H&M mobile loyalty program lets their customers browse through H&M's apparel, accessories, and home décor items. It gives them quick access to coupons, identifies stores nearby, and allows for accumulating points which can be redeemed for rewards.

Additionally, its Scan & Find tool is quite useful when a consumer is inside one of their stores, for instance, if they are having trouble finding their size or want to know whether an item is offered in extra sizes and colors.

What’s more, H&M Club members are offered the buy now, pay later option, which is made available through H&M’s partnership with Klarna.

6. Nordstrom

Nordstrom, the well-known fashion brand, offers their customers a mobile loyalty program, allowing their customers to conveniently shop anytime and anywhere. What’s more, the app provides exclusive features that are available only to its users; they can receive alerts when their Wish List or Bag items are back in stock or on sale. They can also save your preferred brands to receive personalized recommendations and alerts about new arrivals.

Additionally, the app allows its users to redeem Nordy Club notes at a faster pace, enhancing your rewards experience. Lastly, customers can make in-store payments using your Nordstrom card by simply scanning a QR code, streamlining the checkout process.

Advantages compared to regular loyalty programs

• Free shipping and free returns.
• A personalized experience with item recommendations.
• Trustworthy ratings and reviews from customers with verified purchases.
• Free personalized advice on fashion, beauty, gifts and more.

7. Tchibo - Mode, Wohnen & Kaffee

Rating: Google Play 3.6/ App Store 4.8

The mobile app Tchibo (Tchibo - Mode, Wohnen, Lifestyle & Coffee) combines a loyalty and mCommerce app. It facilitates mobile purchasing, provides access to personal vouchers and loyalty cards, and notifies users of promotions.

Besides getting inspiration for everything related to fashion, home decor, and coffee, customers can effortlessly locate the closest branch and accumulate loyalty beans. What’s more, every time a customer pays for a hot beverage at a Tchibo branch with a TchiboCard, a virtual coffee stamp is added to their account. This way, customers receive a free favorite coffee for every ten stamps they collect!

8. E.l.f Beauty Squad

Rating: Google Play 4.3 / App Store 4.7

E.l.f beauty brand meticulously tends to its loyal customer base by offering devoted customers a lot of impact in the items it creates, information on the company's environmental effect, and early access to product sales with just a few finger taps.

Through their loyalty program, Beauty Squad, e.l.f. Cosmetics offers points to users in exchange for reviews, and votes in various competitions and campaigns, such as a contest amongst makeup artists to see who can create the greatest new collection using e.l.f. Cosmetics products. These points may be redeemed by members for cash, gift cards and many other perks.

Advantages compared to regular loyalty programs:

• Earning rewards anywhere you shop for e.l.f.
• Turning your e.l.f. beauty rewards into gift cards from your favorite stores and restaurants like Chipotle, Target, Ulta, Amazon, Walmart, and more
• Free birthday gift.
• Early access to sales and new arrivals.
• Exclusive offers for e.l.f. Icon Members.
• Virtual try-on of makeup products.
• Immediate access to the best of clean, vegan makeup and skincare products launches and sales.

9. Lululemon Studio Membership Program + Mirror

Rating: Google Play 3.4/App Store 3.5

Ever heard of Mirror? It’s a smart device combining, well, a mirror, and a built-in flat-screen TV. Mirror home gym is – of course – more than just a mirror you can use to play YouTube training videos in the background while working out. In fact, it’s a smart device designed to track your results, allowing you to participate in online classes and work out together with fitness buddies from around the world.

Mirror is essentially a part of lululemon, the  activewear brand,  which  introduced their loyalty program in January 2023, unveiling two membership levels. The interactive mirror combined with the companion app is certainly an innovation presenting a new take on loyalty programs. The first tier level, called lululemon Essential, is free to join. Once you become a member, you'll enjoy a range of benefits such as speedy returns, alerts for new product releases,  complimentary studio classes, interactive community events, receipt-free returns, and complimentary hemming services.

The second tier, known as lululemon Studio, is offered exclusively to owners of the lululemon Mirror and requires a 12-month commitment at a price of $39 per month. By enrolling in the Studio membership, you gain access to a variety of benefits, such as early event access, a 10% discount on gear, a 20% discount at partner studios, over 10,000 workouts, and unlimited experiential store classes. These advantages are on top of all the perks provided by the lululemon Essential membership.

10. Cookidoo by Thermomix

Rating: Google Play 4.1/App Store 4.9

The revolutionary cooking device grows in popularity year by year. It’s a perfect match for all those busy people who don’t have much time to experiment in the kitchen, but aren’t very happy about eating outside each day. The Cookidoo program is basically a missing puzzle for Thermomix. It’s not like buying the device without Cookidoo makes no sense, but it certainly makes much less of it.

Cookidoo program consists not only of the recipe repository (with over 70 000 of them!), but it also grants access to cooking guides. It enables people to use a mobile app where they can plan meals, create shopping lists, browse, save and edit recipes, as well as synchronize them with their Thermomix device. Customers decide whether it's enough for $55 a year.

How to leverage your mobile loyalty software with Voucherify?

With Voucherify, you can utilize its API-first and composable technology in your mobile loyalty software, enabling seamless integration across smartphone devices, programming languages, and frameworks. Voucherify's flexible APIs allow you to effortlessly plug it into your existing mobile frameworks and app. Additionally, Voucherify offers SDKs for Android and iOS, accelerating development processes and providing you with support for faster implementation.

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