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May 21 2024


THE IMPORTANCE OF CUSTOMER LOYALTY PROGRAMS AND THE STRATEGIC ROLE OF MOBILE
APPS IN RETAINING CUSTOMERS AND CREATING LIFETIME VALUE

App Development, Mobile App Trends

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.

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RECENT POSTS

 * The Importance of Customer Loyalty Programs and the Strategic Role of Mobile
   Apps in Retaining Customers and Creating Lifetime Value
   May 21, 2024
   
 * Mobile Apps vs. Websites: The Consumer Preference Revolution
   April 30, 2024
   
 * Unlocking Success: The Significance of POC in Your Mobile App Strategy
   April 23, 2024
   

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