The Importance of Customer Loyalty Programs and the Strategic Role of Mobile Apps in Retaining Customers and Creating Lifetime Value
Loyalty has become more shaky in a world where digital switching costs approach zero. Competing brands are just one click or app switch away. The current economic climate presents major challenges for brands across all industries—from fluctuating consumer confidence and supply chain disruptions to rising digital engagement and competitors investing in mobile-first initiatives.
This combination makes retaining existing, already profitable customers more crucial than ever. Their repeat business provides a degree of revenue stability to help companies weather challenging economic climates. Plus, loyal customers tend to be less price-sensitive, more forgiving of mistakes, and eager to try new products and services launched by brands they know and trust. Forward-thinking businesses recognize that times of uncertainty can spur opportunities to gain a competitive advantage. One of the biggest opportunities lies in retaining and maximizing the value of existing customers. Given retention’s direct linkage to profitability, systematically improving loyalty warrants fresh attention and strategic investment, even in challenging budget environments. That’s where customer loyalty programs come into play as powerful tools to boost retention on a large scale, and there is no better tool than an AI-powered, data-driving mobile app.
The brands that double down on customer retention innovation during downturns often emerge as long-term market leaders.
The Value of Customer Loyalty Programs
After early acquisition costs are deducted, loyal customers offer a disproportionate lifetime value. While economic downturns tempt brands to pull back spending, data shows investing to boost retention provides much higher ROI:
Increased Customer Retention
Acquiring new customers costs more than retaining existing ones. Research indicates that boosting retention rates by just 5% can increase profits dramatically, from 25% to as much as 95%. Given the expenses of attracting new customers, reducing churn and lengthening retention are cost-efficient ways to elevate profitability.
Higher Lifetime Value
Although loyal customers may only represent 8% of a company’s total customers today, they generate outsized revenues over time, accounting for 40% of total sales. Brands can benefit from years of ongoing purchases instead of one-time transactions by continually engaging and satisfying retention-focused consumers.
Brand Advocacy
Consumers have far more confidence in personal recommendations than in advertising. According to Nielsen, 92% of people trust suggestions from friends and family about products/services more than any other information source. Loyalty programs incentivize satisfied customers to become brand advocates and provide word-of-mouth promotion.
Data Collection and Insights
Well-structured customer loyalty programs require memberships/accounts to track purchases and engagement. Over time, this data reveals detailed insights into consumer behavior—which products they like, purchase frequency, seasonal demand shifts, and more. Brands can analyze these patterns to sharpen marketing personalization and optimize customer experiences.
These benefits mean that focusing loyalty initiatives on high-value repeat customers protects revenue. The next step is delivering engagement through the platform most indispensable to consumers: mobile apps.
The Strategic Role of Mobile Apps
Mobile apps offer the greatest untapped potential to enhance customer loyalty programs. Mobile apps allow brands to take customer loyalty programs to the next level by serving as always-accessible “remote controls” full of convenient features. Mobility has become central to modern consumer lifestyles, and apps are the primary digital interface. This makes apps ideal for the convenient, engaging loyalty experiences customers want.
Accessibility and Convenience
Mobile unlocks real-time, location-based redemption capabilities that are simply unavailable otherwise. As portals in customer pockets, branded mobile apps allow customers to access their loyalty accounts, rewards, and exclusive information easily, anytime, anywhere. By making engagement more convenient and frictionless, apps encourage higher participation. Alerts and notifications can remind users of expiring rewards or alert them to special offers. Registration forms prefill user details to make checkout quicker.
Personalization
One of the key advantages of mobile apps is their ability to utilize analytics and customer behavior insights to offer personalized recommendations, discounts, and rewards tailored to individual preferences. With these capabilities, apps can even deliver personalized offers precisely when users are nearby or most likely to engage. Personalized rewards outperform generic offers. Research indicates that 80% of consumers are more likely to buy when brands offer individualized interactions. For example, a retail app that offers personalized recommendations based on purchase history and browsing behavior can encourage users to purchase more items more frequently. The convenience of one-click checkout also facilitates more impulse purchases.
Engagement and Communication
Successful customer loyalty programs thrive on continuous engagement and communication, and mobile apps excel in this area. Push notifications keep users engaged with personalized alerts, new offers, and progress updates. Apps give off a sense of “insider access” through exclusive mobile content and features. This ongoing contact strengthens connections between the brand and its loyal community. In-app messaging can also be used for cross-selling related products or services. Post-purchase surveys gather additional feedback while the shopping experience is still top of mind. Direct messaging facilitates personalized communication at scale.
Seamless Integration
Mobile apps can seamlessly integrate various features and services, providing a holistic and streamlined customer experience. From integrated payment gateways to social media sharing and location-based services, apps can consolidate multiple touchpoints into a single platform, improving convenience and reducing friction throughout the customer journey. Loyalty features like points, rewards, and exclusive offers blend smoothly into apps. Financial apps can connect to email and messaging to send payment confirmations or fraud alerts.
Gamification
Mobile apps can incorporate gamification elements like point systems, badges, leaderboards, and challenges, further enhancing engagement and making loyalty programs more appealing. This approach taps into the innate human desire for achievement and competition, motivating customers to participate and remain loyal to the brand actively. Retail apps that unlock new status levels based on annual spending are an example of effective gamification. The social element of sharing achievements with friends compounds engagement. Gamification transforms the loyalty experience into an enjoyable and rewarding journey, fostering long-lasting connections.
Statistics Supporting Mobile-App Based Customer Loyalty Programs
The benefits of investing in mobile apps may seem theoretical, so we understand that businesses need proof to validate apps’ concrete ability to produce lasting engagement and loyalty. Before getting into the specifics, it’s important to frame these as benchmarks for the impact a well-designed app can have. Of course, just having an app does not guarantee results. However, companies that know how to utilize apps to provide a personalized experience can expect to see significant upside.
Higher Conversion Rates: Research finds that app users are twice as likely to return to a store within 30 days compared to desktop shoppers. This indicates that apps help cement long-lasting shopping habits. Plus, exclusive app-only deals and promotions can incentivize usage and increase conversion rates.
Increased Spending: Given their repeat visits, research finds that loyal app users also spend significantly more over time. App customers spend an impressive 3.5x more than non-app users. With apps becoming a daily habit for many users, this foreshadows very strong long-term retention rates for brands that can cement themselves in users’ routines.
Enhanced Engagement: The daily engagement metrics confirm apps’ retention abilities. Nearly 50% of consumers use apps 11+ times every day. So, the more a brand can integrate itself into a user’s lifestyle through an app, the greater the opportunity for enduring loyalty and engagement.
Improved Retention Rates: Retail apps can send abandoned cart reminders to recover lost sales opportunities. Research shows that app users demonstrate a 23% higher retention rate than non-app shoppers after the first 3 months. This shows that mobile apps build lasting brand loyalty that keeps customers coming back over and over again.
When to Implement an End-to-End Mobile App Solution
For many businesses, especially small and medium-sized enterprises (SMEs), implementing an end-to-end mobile app solution can seem like too big of a hill to climb. However, several scenarios showcase when investing in such a solution makes the most fiscal sense:
Omnichannel Presence
Suppose your business operates across multiple channels (i.e., brick-and-mortar, e-commerce, social media). In that case, a mobile app can serve as a central hub, integrating different touchpoints for a complete customer journey.
When There Is a Need to Better Engage with Customers and Prospects on Mobile
A well-designed, intuitive, and fast mobile app provides a superior user experience compared to a mobile website. It encourages more engagement, especially given that customers spend the majority of their time on mobile apps versus mobile sites. More engagement leads to increased conversions and revenues. Personalization and push messaging boost customer loyalty even further.
When an Analysis Shows That a Mobile App Will Provide a Positive ROI
The costs of designing, building, and maintaining mobile apps can seem high initially. But the benefits in terms of driving revenue growth, cost savings, and productivity gains should justify the investment. Before developing apps, businesses should assess market needs and conduct competitor analysis, user research, and projected financial analysis.
Best Practices for Planning App Initiatives
Now that you know the best time to implement an end-to-end mobile app solution, you should know some best practices for planning app initiatives. Executing a successful mobile strategy requires following a few proven approaches.
Secure Executive Buy-In
Gaining leadership support ensures app initiatives receive proper funding and cross-department coordination. Demonstrating the large revenue upside through data makes a compelling case. Having executive buy-in helps align teams across the organization and fill in gaps allowing collaboration. It can also facilitate access to resources and accelerate decision-making. Gaining stakeholder consensus early creates momentum.
Audit Your Loyalty Program’s Untapped Potential
Analyze current metrics around registrations, active users, reward redemption rates, and transaction frequency to identify growth opportunities. Look at customer segmentation to find which groups have the most potential for increased engagement. Review competitor benchmarking to see where there are gaps in your program’s performance. Survey members and do focus groups to uncover pain points and ideas for new features. Develop theories for how app experiences could overcome friction points.
Set Clear Goals and Key Results
Define specific targets for critical metrics over 6 and 12 months. Create a prioritized list of the most important metrics to focus on. Make sure goals are realistic but aggressive to drive performance. Personalize key performance indicators according to your loyalty program’s maturity.
Examples of goals include:
- Grow member visits per month
- Increase the active member base
- Boost 90-day retention rate
- Increase per-member annual spending
Additional examples could be increasing reward redemption by 15% or getting over 50% of transactions coming from the app. Having clear OKRs helps communicate priorities across the organization and align activities. By understanding the best practices connected to your mobile app initiative, you will lay the groundwork for the successful implementation of your mobile app. Once you lay the foundation, your next step is to partner with a team that can help you build.
Choosing the Right Development Partner
As consumers increasingly manage life through mobile, branded apps have emerged as the most effective and cost-efficient channel for continual engagement post-purchase. While economic volatility has made organic growth harder to achieve, investing in mobile-first loyalty programs utilizes apps’ proven power to boost retention, order values, and lifetime spending.
However, building apps requires technical, specialized design, development, and infrastructure expertise. This is why partnering with a team well-versed in loyalty use cases ensures alignment with business objectives. Bryj, the end-to-end mobile app platform, builds, powers, and scales apps, so businesses need only focus on their revenue and growth goals.
With features such as seamless integration, personalization capabilities, gamification tools, and data analytics, Bryj offers a thorough solution for businesses that want to utilize the power of mobile apps for customer retention and lifetime value creation. Now is the time for forward-thinking brands to future-proof loyalty, revenue, and market share through mobile apps—establishing direct mobile relationships with every customer.
Connect with Bryj today to explore how a customer loyalty program and an integrated app solution can help you acquire, engage, and retain high-value customers for the long haul. We will take a caring approach to better understand your business objectives and limitations before making recommendations. Our team always employs best practices to deliver secure, scalable solutions on time and within your budget. We never want businesses to leave the untapped potential of a mobile experience on the table.
