Stanislas Cavalie[Posted by Stanis­las Cav­a­lie, Prod­uct Mar­ket­ing Intern, Neolane, an Adobe Com­pany]

The strength of a loy­alty pro­gram relies on the sus­tained par­tic­i­pa­tion of active mem­bers. Pro­grams with­out suf­fi­cient cus­tomer engage­ment do not gain repeat cus­tomers or increase rev­enues.  This shows the impor­tance of dri­ving par­tic­i­pa­tion within these pro­grams. Focus­ing on the num­ber of active users is now becom­ing more impor­tant than just sign­ing up new members.

Mobile AppsChal­lenges of Loy­alty Programs

Accord­ing to Col­lo­quy, while “loy­alty pro­gram mem­ber­ships rose almost 27% to 2.65 bil­lion in 2012, active participation—those cases in which peo­ple redeemed rewards at least once a year—dropped to 44% last year from 46% in 2010”[1]. This shows that over­all par­tic­i­pa­tion in con­sumer loy­alty pro­grams is declin­ing despite the increase in total membership.

The offers/rewards asso­ci­ated and promised to con­sumers from loy­alty pro­grams are often not aligned with the ini­tial inter­ests that moti­vated a con­sumer to ini­tially sign up. This is mainly due to the dif­fi­culty orga­ni­za­tions have in cor­rectly ana­lyz­ing and syn­the­siz­ing widely avail­able con­sumer data, leav­ing them strug­gling and unable to clearly tar­get cus­tomers with per­son­al­ized inter­ac­tions. This often makes loy­alty pro­grams bor­ing and use­less in the consumer’s eyes, dri­ving active par­tic­i­pa­tion down quickly.

Using a Mobile App to Improve Loyalty

There are some ways to avoid get­ting caught in this sit­u­a­tion. For exam­ple, cre­ate a mobile appli­ca­tion asso­ci­ated to your business.

An easy to use mobile app dri­ves cus­tomer par­tic­i­pa­tion and allows you to gather rel­e­vant infor­ma­tion about your loy­alty mem­bers. A good mobile app might deliver com­bined mes­sag­ing tech­nol­ogy with geo-location based, per­son­al­ized push noti­fi­ca­tions. It can also present per­son­al­ized con­tent to con­sumers no mat­ter where they are or what they are doing. This enables the deliv­ery of a supe­rior expe­ri­ence on an ongo­ing basis that nur­turs customrs.

These mobile apps tar­get the essence of a customer’s SoLoMo (Social, Local, Mobile) behav­ior. SoLoMo smart­phone tech­nolo­gies com­bine Geo/Social inte­gra­tion capa­bil­i­ties to gather data from Face­book, Twit­ter, LinkedIn, geo-locations.  Many also inte­grate Pass­book, the new dig­i­tal wal­let by Apple.

Fur­ther­more, you can also dif­fer­en­ti­ate your­self by build­ing asso­ci­ated ser­vices into your app that add value for your cus­tomers. For exam­ple, retailer Old Navy built a mobile app that allows you to cre­ate a wish list and buy prod­ucts directly from it.  The app also has a gam­i­fied com­po­nent that lets cus­tomers snap a photo of the Old Navy logo from printed ads or online videos to gain access to prizes like coupons or gifts. Another exam­ple is Walgreen’s mobile app, which sends pre­scrip­tion reminders and inte­grates with Pass­book as a Rewards Card.

Mobile Engage­ment Matters

Loy­alty pro­grams today must first rely on mobile engage­ment that sup­ports a pos­i­tive, ongo­ing cus­tomer expe­ri­ence life­cy­cle, any­time and anywhere.


[1]Jargon, Julie. “Restau­rants Are Turn­ing to Loy­alty Reward Apps to Lure Cus­tomers.” The Wall Street Jour­nal. N.p., 12 July 2013. Web. 10 Sept. 2013. <http://​online​.wsj​.com/​a​r​t​i​c​l​e​/​S​B​1​0​0​0​1​4​2​4​1​2​7​8​8​7​3​2​3​6​8​9​2​0​4​5​7​8​5​6​9​3​8​2​6​1​2​1​1​5​7​0​0​.​h​tml>.