Somewhere in every house, in a little drawer that doesn’t get opened often, is a pile of unused cards. Unwanted credit cards, plastic petrol cards for stations you don’t use anymore, and tatty little dog-eared cardboard lumps, the ink long-dried from visits to shops that you’ve forgotten about. There’s a loyalty card for a coffee shop, a greengrocers store, and a restaurant, and perhaps a newsagent, and maybe a games shop, and…
Over time most have been relegated to the drawer or various compartments around the house because you physically can’t fit them in your purse or wallet.
For some stores you’ll probably have two or three loyalty cards, each boasting two or three stamps. You always say that you’re going to go into the shop one day and combine all three into the same purchase, guaranteeing you a free brew – but it never actually happens. But because you feel loyal to that brand you always accept the offer of another card whenever it’s offered!
Loyalty cards have been around since the mid-1980s, and supermarket clubcard and points programs arrived in the 1990s. Shoppers have always loved being rewarded for showing sustained support for a brand, but they are fickle: they don’t like carrying too much clutter, and they don’t like things that they can easily forget or lose. But they do like systems that are easy to understand, they do like cards that are distinctive from one another, and they do like any technology that can make life easier.
So SMEs are taking advantage of this psychology, creating very simple apps for smartphones, with very simple but clearly-defined loyalty programmes, and packaging them in one discrete piece of technology that customers carry with them at all times. Eighty per cent of all time spent on mobile phones is spent inside apps, and almost 100 billion apps have been downloaded from the Apple App Store and Google Play.
Just as Wix, Wordpress and other builders have opened up the world of website creation, so app developers such as Appsme have unlocked the world of app creation. Apps are cheap and easy to create and companies that are on the ball are stepping forward to create their own loyalty programmes.
And the stats speak for themselves: Membership in loyalty programs is growing at an annual rate of 26.7% and currently 36% of Americans participate in loyalty programs. Customers who have enrolled in a loyalty program visit twice as often and spend four times more money and 90% of consumers who have joined mobile loyalty programs feel they have gained value from them. Finally, as many as 35% of customers will go out of their way to a business that offers a loyalty program
Some SMEs choose to sign up to 3rd party loyalty apps including Click!, Loyalzoo and Loyalblocks, and each works in a broadly similar way. The vendor can update their details of deals and loyalty programmes quickly and easily, and can also be linked in with social media so the customer’s friends know they are taking part. LoyalZoo states that raising customer retention by 5% can boost profits by up to 75% - so the appeal is obvious.
Some choose to enlist a developer to create an innovative custom app, which may seem an attractive proposition. Programmers will put it through a rigorous testing plan and review the code – you may want bespoke product pages, payment pages, menus and many other attractive options. While the cost can be very high and it may take longer to develop, as we have seen the popularity of apps may mean that this pays for itself.
With this in mind, why would anyone pay to create their own app?
If you have the money why not pay a programmer to create an app to your exact specification? Why not just put yourself forward to be included in third party discount schemes such as those provided by Wowcher, Groupon or the like, which could offer your holidays, services and products to millions of people? Or other existing mobile apps such as Shopkick, used by 6 million people worldwide and partner with companies such as Macy’s and l’Oreal?
The answer is clear. Your SME would be in competition with other SMEs, or even global companies, which are also signed up to the same third party scheme. So while in theory you should benefit from increased participation and interest from potential customers, there is a chance that they may use the third party service and might not even know you exist. Your name is one of many. Your service is one of many. And you may be somewhat constrained by the rules and guidelines of the 3rd party.
In contrast there is a major benefit of using an individual tailored app for the SME; Your logo, brand or icon represents free advertising, always present on the smartphone or tablet whenever the user looks at the screen – an average of 150 times per day, for a typical consumer. Your brand won’t get lost in the mix of other SMEs in a 3rd party app. And it’s there because a customer wanted to download it, as opposed to that 3rd party discount app which will probably feature the services of many other companies that are irrelevant to them - the average customer is only interested in one or two brands.
Apps are remarkably easy to build with no technical knowledge; an SME can whip up a responsive stylish application in moments featuring details about a business, contact and geographical location, links to social media including Facebook, Twitter and LinkedIn, and a gallery. Companies ranging from martial arts companies and small retail stores to coffee shops are signing up and emerging happily 20 or so minutes later with a completed loyalty package and icon in place, ready to be downloaded.
Whether you create the app yourself or ask an expert, it can both build upon your loyalty base and the customers who already value and respect your business, but can also generate new ones. It can push those customers towards your website and new products. They allow as much or as little creativity as is needed, with the same visual format as a card version - buy six coffees and get one free, or 35% off car servicing, for example – but the purchase is scanned rather than scribbled.
Once you’ve got your app, get it out there! Promote it on social media, tell your face-to-face customers, put the details on receipts and invoices, put up posters on your van or shop front, and get it on your business cards. Ask customers to tell other customers about it; word of mouth is still as powerful now as ever. You’ve got the app – be proud of it. Loyalty apps are fun and funky and they’re here now, so get on board.
By John Baker.
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