As the contents of our wallets shift to our phones, there’s no reason your business shouldn’t be a part of that transition. Many businesses – including small businesses – that saw success with loyalty punch cards, or dedicated rewards credit cards like Starbucks, are finding ways to bring that same loyalty to their customer’s phones with the 2015 version of a punch card – a rewards program app.
The same built in loyalty you got with a card that gave your customers their 10th slice of pizza or 11th sandwich for free can be replicated with an app tracking and rewarding their purchases. And unlike the paper cards that can easily be forgotten at home, it’s hard to find a person willing to go anywhere without their phone.
The New York Times recently reported on the spread of the use of loyalty apps among businesses of all sizes, writing "Smartphones and loyalty apps have begun offering small businesses enhanced program features and automated administration capabilities once affordable only to large companies like airlines and hotel chains.”
By creating an app that allows your customers to earn rewards for return visits and repeated purchases you can not only incentivize that behavior but you can learn about your customer base. If you collect the data from your customers you can see what products or services they are interested in, what promotions are working, and how often they are willing to make a purchase from you.
The New York Times also pointed out that these apps “also offer the equivalent of a real-world psychology lab for easily evaluating the effects of offerings and incentives on customer loyalty."
You’re probably using at least one of these apps now to purchase your coffee, your sandwiches or salads. And you’ve probably noticed yourself being drawn in by the promise of a reward – visiting the sandwich shop one extra time per week when the free sandwich is looming, or grabbing a coffee for your coworker when you are a few cups shy of a reward.
Your business can capitalize on that, with studies showing that apps or rewards that come pre-loaded with a few punches or purchases to make the reward appear closer can help to further incentivize return visits. It’s called the endowed progress effect, and it has been proven to work.
There are other tactics your business can use as well, including random rewards for those using the app when they come in to make purchases – another reason for them to get through the door and into your business – or reward lotteries for users. Those rewards can also be low-cost to you or free, like previews of new product lines for top customers. And by customizing your own app you can transform this retail technique often seen in foodservice to your business –your rewards could be based on the number of customers they’ve referred, or times they’ve used your services.
Rewards apps can also have pay-in-app functions if your users link their app to their credit card, that makes your business an easy stop where all they need is a phone to complete their purchase.
The technological side of app development doesn’t need to scare you off. Many companies exist to help small businesses tap into the world of rewards and loyalty apps, outlined here by Small Business Matters.
In an age where everyone is glued to their phones, it can only be a benefit to your business to be a part of the world they hold in their hands. By creating an app you can reward them for shopping with you, create an easy way for them to pay, and learn about and incentivize their purchasing habits. If you would like additional information on rewards program apps, please contact us at BuddinghAssociates.com
David S. Buddingh is founder and partner in Buddingh & Associates, Inc., an award-winning strategic marketing consulting firm in Naperville, IL. Contact him at (630) 961-4504 or visit BuddinghAssociates.com.