Mobile Loyalty Programs – The Key to Customer Loyalty

In this article, I cover the advantages of mobile-based loyalty programs compared to web-based programs, research the best in-app loyalty programs and show you how to create your own mobile loyalty program.

Also, considering the growing popularity of mobile loyalty programs and their variants, I decided to expand the article a bit. I added some information about recently popular membership programs (or premium loyalty programs, if you will), and included even more real-life, inspiring mobile loyalty program examples. All to make creating a better loyalty experience for your customers more approachable.

Table of Contents:

1. Why should you offer a mobile customer loyalty program?

2. Website-based vs. mobile app-based customer loyalty programs.

3. Best loyalty app examples:

• My Starbucks Rewards app.
• Dunkin’ Donuts DD Perks.
• Designer Shoe Warehouse (DSW).
• Sephora Beauty Pass.
• Lidl Plus.

4. Membership programs – a different take on a customers loyalty

5. Inspiring membership program examples:

• Lululemon/Mirror
• Cookidoo by Thermomix

6. How to create your in-app customer loyalty program with Voucherify?

7. Example of an in-app customer loyalty program created with Voucherify.

8. Summary.

Why should you offer a mobile customer loyalty program?

Running a loyalty program is a great way to reach and engage more customers. People are using smartphones more often than ever. The following statistics speak for themselves:

• 81% of Americans use a smartphone daily.
• 20% of smartphone owners use only phones to surf the internet.
• 81% of American adults go online every day, including 28% who are constantly online.
• Nearly half of the 18-29-year-old generation is constantly online.
  

Thanks to the recent trends of digitalization, technological development, and lifestyle changes, the aforementioned numbers are continuously growing.

Website-based vs. mobile app-based loyalty programs

Smartphone users are easy to reach through applications. The whole consumer journey can be completed on an app, from browsing products until the check-out. Web-based and mobile-based solutions can exist simultaneously. Having a loyalty program and rewards in the pocket can add value to the customer and your business when customers purchase in-person.

Benefits of offering a mobile app version of your loyalty program:

Compared to solely a website-based rewards program, an in-app rewards program has a lot more to offer to your customers and your company:

1. Collect data – knowing customers’ location enables you to send mobile push notifications at the right moment which contributes to a more personalized experience.

2. Collect feedback – on the mobile app, it is possible to ask for the customers’ feedback immediately after they purchased products in your store. This valuable feedback will help you to get to know your customers better and provide you with data to improve your products and services.

3. Provide a smoother customer journey – on a mobile app, you can send personalized offers and vouchers which can be redeemed by the customers immediately. Customers enjoy collecting points on digital loyalty cards and redeeming loyalty rewards seamlessly, without having to have a separate loyalty card with them.

4. Engage and retain your customers – retaining customers is much cheaper than gaining new ones. If you can make shopping easier, more efficient and fun, your customers will come back to you and purchase again and again.

5. Accessible solution – an increasing number of customers want to have everything accessible via mobile apps. A mobile-based rewards program will enable them to access their order history, points, special offers, rewards and loyalty cards digitally.

Physical loyalty cards are a thing of the past. Digital loyalty cards are the future. Your customers might forget their physical loyalty card at home or lose it. Loyalty cards also take up space in the wallet. Points collected in an app-based digital wallet are more accessible. If the customers have your loyalty app downloaded, it is easier for your brand to stay on top of their mind.

Examples of the best loyalty mobile apps

Now that we know the advantages of mobile apps for loyalty programs, let's look at some examples. We collected the most popular in-app reward programs to show you the potential of smartphone loyalty applications.

1. My Starbucks Rewards app

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 regular loyalty 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. Dunkin’ Donuts DD Perks

The DD Perks rewards program is integrated into the loyalty program app. The app has over 5 million downloads on Google Play and 4.7 stars on Apple Store. DD Perks is offering the following features:

• Personalized rewards.
• Customers can order and pay through the loyalty program app even before entering the café. This leads to an improved speed of order reception.

Gamification:

• Dunkin’ has a strong social media presence. The company is offering money prizes for social media shares and other performed actions. (e.g., the 2 millionth DD Perks member received a free trip to Dunkin’ Donuts’ Headquarter office.)
• The company introduced the option to share loyalty points with other program members through its loyalty app.

Advantages compared to regular loyalty programs:

• Members can set up auto-refill for their digital wallet.
• Members can access their points and redeem vouchers offline.
• The digitalized order and payment improves the efficiency of the buying process. Products are ordered and paid in the app without human interaction, therefore faster and more cost-efficiently.
  

3. Designer Shoe Warehouse (DSW)

The DSW mobile app is 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.

4. Sephora Beauty Pass

Sephora runs various loyalty programs across the world – in some of them, customers get free shipping for each purchase they finalize via the mobile app. In others, though, they need to earn such a benefit with loyalty points.

Sephora's mobile app has some excellent reviews, with a 4.9 score in the App Store and more than 1 million downloads in Google Play.

While using Sephora's 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:

5. Lidl Plus

Lidl grocery stores are especially popular in Europe – that's why the company offers its customers an app-oriented loyalty program called Lidl Plus. The app is available in Google Play (4.1/5 with more than 1.3 million downloads) and AppStore (4.7/5, over 422K ratings).

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.
• Digital copies of receipts.
• Lidl Plus participants may return bought goods up to 30 days after the purchase.

Membership programs – a different take on the customer loyalty

Companies constantly look for ways to ensure the loyalty of their customers, and membership programs might be just what they need. It’s not a whole new approach – you might’ve had a chance to hear about them under the name of premium loyalty programs, paid loyalty programs etc.

Membership programs differ from typical loyalty programs because they require paying a regular fee (usually once per month or annual) to benefit from such programs.

How does it work?

Instead of offering a free loyalty program for customers, a company might create a membership program offering something more: one-of-a-kind rewards, access to closed groups and events as well as many other outstanding benefits.

The main difference between this and a typical loyalty program is that members of a premium loyalty program have to pay a subscription-type fee to join. Knowing that such an approach might be controversial (especially right after the implementation), some companies decided to merge these two types by introducing a tiered loyalty program. In such cases, the first tier is usually free of charge, but it provides basic rewards only, while the second tier (as well as each next one, if present) needs to give customers a solid reason to pay for a membership.

Why does it work?

In the past, customers weren’t used to paying regularly for products and services (aside from their rent or electricity). In 2022, though, the world looks different – we pay for streaming services, cloud drives, regular coffee delivery and so on. We know that maintaining such services costs. Also, we recognize the value of the possibility of dropping out at any time. Why not pay for the membership in our favorite store, then?

The word 'favorite' is the point of membership programs – they work only for those who really love a company's products or services. Membership programs aren’t created for any customers, but for those most loyal and most eager to spend their money. In short: for fans.

All this brings us to the conclusion that premium loyalty programs fulfil slightly different goals than regular loyalty programs. The membership programs are built to take customer engagement from “high” to “unprecedented”, so they can only work if the company already has a strong base of loyal customers.

Inspiring mobile membership program examples

1. Lululemon/Mirror membership program

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.

Buying a Mirror home gym device for fifteen hundred dollars is just the beginning of the journey – a $39/month payment is required to use it. Without an active subscription, you’re just buying yourself a very expensive mirror, but with it, you get access to a Mirror home gym companion app, live classes, on-demand workouts, and much more.

The Mirror subscription also doesn’t mark the end of the offer. Mirror is a part of Lululemon – the company, which intends to launch their own membership program this Spring.

Supposedly, there will be two tiers of the program – one would be free for everyone, while the other would cost $39 per month. The latter will offer various perks, such as unlimited free shipping for all the Lululemon products, as well as various discounts and early access to the products.

The good news (especially for all existing Mirror users) is that Lululemon's membership program comes with all the contents from Mirror subscription, and all the active users will be transferred seamlessly to a new loyalty program.

2. Cookidoo by Thermomix

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 the 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.

Summary

Most of your customers have smartphones with them, therefore you should definitely consider having a mobile loyalty program. Mobile-based rewards programs have several advantages, recognized by the market leaders. Going mobile opens up a great number of opportunities for both customers and businesses. With Voucherify, our customer loyalty software, you can create an in-app loyalty program that can be customized to your needs, in no time.

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