How Do Loyalty Apps Work?

So, you've heard about loyalty apps and are thinking about introducing one into your business. But you're wondering: "how do loyalty apps work?"

Well don't worry, we've got you covered. Hopefully after reading this article you'll have a bit more of an idea. 

Let's dive in...

So, what is a loyalty app?

Loyalty apps allow customers to interact with a business's loyalty program through a smartphone app, as opposed to a paper or plastic card. Exactly how it works depends on the type of loyalty app technology being used.

There are various loyalty app providers available in the market and each differs slightly from the other.

For example, the Stamp Me Loyalty App works by replicating the traditional (and highly effective) “Buy X, Get Y”-style paper loyalty cards onto a smartphone app.

How does a loyalty app work?

The customer collects stamps for each transaction they make by either by scanning a QR code. You can learn more about how it works here.

Whereas, some other loyalty apps, like Rewardle or TapMango, require the merchant to use a tablet to scan a code held by the customer.

You can find a list of loyalty app providers here.

It’s incredibly important to ensure the loyalty platform you decide to use has two vital components - simplicity and ease-of-use. Platforms that are too complicated to use and hard to understand will put customers off (and they likely will not use it), so be sure to bare this in mind!

You can find out more about the various types of loyalty apps here.

What are the benefits of a loyalty app?

Data capture for your business

Loyalty apps are undeniably beneficial for customers, but they are also an incredibly powerful marketing tool for businesses.

A digital loyalty program allows for loyal customer data to be captured and stored. This data gives businesses valuable insight into their who their loyal customers are, and how frequently they visit their business. This insight is highly valuable for forming marketing strategies.

Have a read of this article about why loyalty programs are imperative to business success.

Contact your customers directly at key times

Most digital loyalty providers provide the ability for a business to communicate directly with their loyal customers through the platform. 

For example, the Stamp Me loyalty platform enables merchants to send Push Notifications and SMS directly to their customers with just a few clicks of a button, or even automatically. 

This simple action is an incredibly powerful tactic, as it allows a business to deliver the right messages, at the right time, to the right customer.

For example, a merchants' loyalty program can be configured to automatically send the following text message to any customer who hasn’t made a transaction within 7 days: “It’s been over a week - we miss you! Come in and enjoy a free coffee on us.”

Using the right messaging at the right time proves to the customer that they aren’t just a number and that you actually care about their business. This is an incredibly important element to success in marketing and is hard to do without a digital platform.

A loyalty app also provides the ability to enhance your loyalty program with gamification, which is a powerful strategy for keeping customers engaged with your loyalty program.

Read this article to find out more about how exactly gamification can be used as a customer retention strategy.

People always have their phones on them.

When you get given a paper loyalty card, the chances are you'll chuck it in your wallet and forget about it. Or you'll take it out because it's just junk making your wallet too full.

The benefit with having a loyalty program as an app on a phone is that everyone carries their phone with them, so they can easily access their loyalty program.

In fact, the vast majority of Americans – 96% – now own a cellphone of some kind (Pew Research).

If your customers are millennials then you're especially in luck - 25% of millennials spend an average of five hours a day using their phone.

Incredibly, a quarter of Millennials check their phones more than 100 times a day (The Business Journals).

Digitising loyalty is the way forward to ensure you're not missing out based on people simply forgetting to bring their paper punch card.

If you want to know more about why you should go mobile, have a look at how Stamp Me works by clicking above, or take a look at this article about the benefits of a digital punch card app.