Loyalty App Development: How to Build Customer Devotion

Hive team posted on September 18, 2023

In the face of rising inflation and concerns about recession, businesses find themselves in a delicate position when it comes to retaining customers, regardless of their size. One effective approach to address this challenge is to explore loyalty app development. By creating such apps, companies can not only enhance customer retention but also offer rewards to their clientele. All of that results in increased customer loyalty and a rising number of returning customers.

In 2022, the worldwide market for loyalty management solutions was assessed at $5.29 billion, and it is anticipated to demonstrate stable growth, reaching $28.65 billion by 2030, with an impressive compound annual growth rate (CAGR) of 23.7% projected for the forecasted period. Every business now aims to establish robust bonds with their customers, and a loyalty program app development can be instrumental in achieving this objective. However, the question arises: how can you create and launch a personalized loyalty app? Let's delve into the process. By the time you finish reading this blog, you will possess a comprehensive grasp of how to establish an effective loyalty app development procedure and the ways it can earn you the admiration of your customers.

Table of Content

• What are Loyalty Apps and What is Their Role in Your Business?
• What are the core benefits of loyalty app development?
• What are the key features of a loyalty app?
• Which Industries Use Loyalty Apps the Most and to What Ends?
• Loyalty App Development: Best Practices to Get Your Project Going
• How to Choose an Outsourcing Vendor for Loyalty App Development?
• FAQ
• Loyalty App Development With Hive

What are Loyalty Apps and What is Their Role in Your Business?

Customer loyalty apps are digital tools designed to enhance and maintain customer loyalty for businesses and brands. These apps are typically accessible via smartphones and offer various incentives and rewards to customers who engage with a particular company or brand consistently. The primary purpose of these apps is to foster stronger relationships between businesses and their customers, ultimately driving repeated purchases and increasing customer retention.

These apps often come with features such as points-based systems, where customers earn points for every purchase or engagement, which can later be redeemed for discounts, free products, or exclusive offers. Some loyalty apps also incorporate personalized recommendations based on a customer's previous interactions, further enhancing the customer experience. Additionally, many loyalty apps provide customers with easy access to information about products, promotions, and events, ensuring they stay informed and engaged with the brand. Overall, customer loyalty apps serve as valuable tools for businesses to not only reward their most loyal customers but also to gather valuable data and insights into customer behavior, preferences, and trends.

What are the core benefits of loyalty app development?

To maintain customer engagement and acknowledge their loyalty and continued support, organizations across industries invest in the loyalty system app development. Loyalty applications offer substantial advantages to businesses, some of which are readily apparent:

• Enhancing consumer engagement: Loyalty programs provide a means to engage customers in ways that align with a company's mission. For instance, businesses often offer discounts or freebies to loyal customers or those who refer new business, thereby encouraging customers to interact with the company and ultimately boosting sales.
• Increasing customer retention: The incentives offered to customers through rewards programs persuade them to continue purchasing products and services. This, in turn, reduces the likelihood of customer turnover, a persistent challenge for most enterprises. Additionally, loyalty apps can attract new customers, allowing companies to build a dedicated following and ensure higher profits.
• Enhancing brand perception: Loyalty apps can lend a sense of credibility to a company's brand, as consumers perceive loyalty programs as a commitment to enhancing their overall experience. The result is an improved reputation among consumers.
• Boosting revenues: Such apps can directly impact a company's sales by fostering customer loyalty and strengthening brand engagement. Furthermore, they contribute to both customer retention and acquisition, yielding long-term dividends.

Loyalty program website development enables businesses to leverage targeted rewards strategies that incentivize specific types of engagement, fortifying customer relationships and bolstering brand recognition. More so, loyalty apps enable businesses to distinguish themselves from competitors.

What are the Key Features of a Loyalty App?

To create a loyalty app that effectively engages your customers, it's essential to infuse it with a proper set of functionalities. Here are the essential options we believe are essential to consider when approaching loyalty app development:

Seamless customer enrollment

To streamline the sign-up process for customers, it's good to offer various enrollment methods. These options may include in-person enrollment during the payment process, post-order sign-ups through the app, utilizing sign-up links or digital receipts, and allowing staff to directly sign up customers. It's also advisable to incorporate platform-specific sign-up options, such as Apple ID for iPhone apps or Google ID for Android applications, to facilitate quick and easy app registration.

Effortless points redemption and balance checking

Customers should have the flexibility to redeem their reward points either before or after making a payment. They should be able to link their credit cards to the app and easily access their total rewards balance at any given time. Moreover, customers should receive real-time updates on their earned points through push notifications.

Integration of gift cards with loyalty program

To cater to a broader range of customers, it's ideal if plastic gift cards can function seamlessly with cash balances and loyalty points within the app. This means that any gift card can double as a loyalty card, and vice versa. However, for customers opting for the mobile solution, the convenience of paying directly with a credit card within the app should also be available.

Enhanced user experience with additional features

To significantly enhance customer interaction with your company, consider adding seemingly minor yet impactful features, such as:

• Geolocation Enable users to easily locate the nearest business locations through the app.
• Tip option: Allow customers to leave tips, enhancing their satisfaction and supporting service staff.
• Gift sharing: Enable users to share gifts and promotions with friends, fostering a sense of community and engagement.
• Customized ordering: Provide customers with the ability to customize their orders when placing pre-orders, catering to their specific preferences and requirements.

By incorporating these features, your loyalty app can not only incentivize customer loyalty but also offer a more user-friendly and engaging experience, ultimately driving customer retention and satisfaction.

Gathering customer insights through reports

Your loyalty platform should offer comprehensive reports that enable you to extract valuable insights about customer spending patterns. This data serves as the foundation for crafting highly targeted marketing strategies on a per-customer basis, leveraging the insights gathered from each customer's interactions. These reports, such as those provided by Toast Analytics, effectively identify your most loyal customers and offer actionable steps to enhance the overall experience for other guests.

User-friendly for staff operations

It's important to keep in mind that a loyalty app is just one facet of the solution; equally crucial is its ease of use for your staff when managing rewards. Staff members should have the ability to swiftly locate a customer within the system using various identifiers, including names, credit card details, phone numbers, and more. Additionally, the convenience of batch uploading existing customers onto the platform from the administrative side can greatly streamline operations.

Integration with other loyalty programs

Some of the most robust rewards-based platforms offer seamless integration with other loyalty services. For instance, Toast allows customers to redeem rewards from other restaurant loyalty applications like Punchh or Paytronix. It's worth noting that such integrations may require backend adjustments. Therefore, collaborating with experienced professionals in the development of loyalty apps can prove invaluable in ensuring smooth integration with external loyalty programs.

Which Industries Use Loyalty Apps the Most and to What Ends?

OLoyalty apps are used across a wide range of industries to engage customers, build brand loyalty, and drive repeat business. Some of the industries that commonly employ loyalty apps include:

• Retail: Retailers use loyalty apps to reward frequent shoppers with discounts, coupons, and exclusive deals. These apps often track customer purchases to offer personalized incentives.
• Hospitality: Hotels, restaurants, and cafes use loyalty apps to reward guests for repeat visits. Loyalty programs in the hospitality industry often include benefits like free stays, complimentary meals, or room upgrades.
• Airline and travel: Airlines and travel companies offer loyalty programs that provide frequent flyers and travelers with perks such as free flights, priority boarding, and access to airport lounges.
• Entertainment: Movie theaters, amusement parks, and entertainment venues offer loyalty apps with rewards like free tickets, discounts on concessions, and VIP access to events.
• Financial services: Banks and credit card companies offer loyalty programs that provide cardholders with cashback, travel rewards, or discounts on financial products and services.
• E-commerce: Online retailers use loyalty apps to reward customers for repeat purchases, product reviews, and referrals. Rewards may include discounts, free shipping, or early access to sales.
• Telecommunications: Telecom companies offer loyalty programs that provide customers with discounts on phone plans, free data, and special offers on devices.
• Pharmaceuticals and healthcare: Pharmacies and healthcare providers use loyalty programs to offer discounts on prescriptions, over-the-counter medications, and wellness products.

These are just some of the many industries that utilize loyalty apps to enhance customer engagement, retain customers, and foster brand loyalty. The specific rewards and incentives offered may vary depending on the industry and the goals of the loyalty program.

Loyalty App Development: Best Practices to Get Your Project Going

Loyalty program app development offers numerous benefits, making it an effective strategy for engaging customers. However, the success of developing apps hinges on their architecture. In terms of design, loyalty apps are typically programmed to enable customers to earn discounts, points, or cashback for their purchases, in-app activities, and other interactions. They can also be focused on incentivizing specific actions, such as sharing a brand message on social media or following a brand account. Loyalty app development involves several essential steps:

1. Identify your objectives: Every app development project begins with a clear understanding of its goals. Defining the necessary features and functionalities for your app is crucial to effectively boost sales, enhance customer loyalty, and gather valuable user-generated data.
2. Define your target audience: After establishing your objectives, it's essential to define your target audience. If your goal involves customer retention, your existing customer base should be the primary focus. Identify the age group and demographics of your customers to tailor the app accordingly, as a deep understanding of your target audience can significantly influence app design.
3. Determine core features: The next step is to outline the feature set. This may involve deciding on the rewards you will offer, how customers can earn them, and how they can be redeemed. The features of your loyalty app will dictate customer interactions and the data you can collect.
4. Design the user interface (UI): A loyalty app's success relies heavily on its user interface. An easily navigable UI enhances the customer's engagement with your brand, while a poorly designed UI can lead to frustration and disappointment. To avoid such issues, consider hiring a professional UX designer to create an appealing and user-friendly interface.
5. Development: Depending on your target audience, you may opt to develop your loyalty app for various platforms, such as Android, iOS, or web-based solutions. Keep in mind that the complexity of app development projects can increase when targeting multiple platforms.
6. Testing and launch: After app development, thorough testing is essential to ensure a glitch-free and secure user experience. Security vulnerabilities should be addressed to protect consumers. Once rigorous testing is complete, launch the app and promote it to your intended audience.

How to Choose an Outsourcing Vendor for Loyalty App Development?

IT service providers vary widely in terms of their size, areas of expertise, and industry experience on a global scale. To address the question of selecting the ideal software development partner for your particular project, we've crafted a succinct seven-step outsourcing guide.

• Choose a location with a rich talent pool: When considering IT outsourcing, prioritize destinations with a robust tech talent pool to swiftly address workforce shortages. Find a location nearby that has a large enough talent pool and a good reputation for the quality of software development services. Research your options and select a destination that matches your needs.
• Research engagement models: Thoroughly explore available engagement models to align with your business needs. Seek a software development partner that offers flexibility in engagement models, considering factors like project size, requirements adaptability, and budget capacity. Models such as Dedicated Development Team, Time and Material, and Fixed Price cater to varying project scenarios.
• Evaluate technological expertise: Before launching the collaboration, assess your potential outsourcing vendor's technological expertise relevant to your project requirements, including web development expertise, mobile development, and more.
• Examine the company's portfolio: Gain insights into the vendor's service quality and domain experience. Explore success stories on the vendor's blog and client testimonials. Consider vendors with a track record of delivering successful projects in industries similar to yours.
• Assess cybersecurity measures: Evaluate the vendor's cybersecurity policies and adherence to international information security standards and regulations. Ensure the vendor has a robust Business Continuity and Disaster Recovery Plan in place to address unexpected incidents and failures, prioritizing data security.
• Review contract legalities: Carefully review the terms of the cooperation agreement, including code ownership, notice periods, liability, warranty clauses, and data protection rules. Clarify responsibilities, risks, and milestones within the contract to prevent ambiguities in the future. Pay special attention to data protection rules regarding data deidentification, reidentification, and anonymization.

FAQ

Should I outsource loyalty app development?

Whether to outsource loyalty app development depends on your organization's expertise and resources. If you lack the necessary in-house skills or need to delegate development. In that case, outsourcing can be a cost-effective and efficient solution, but it's essential to choose a reputable vendor with the right experience and capabilities.

How much does it cost to create a loyalty app?

The cost of developing a loyalty app can vary widely depending on factors such as complexity, features, platform(s), and the development team's location. Generally, a basic loyalty app may start at around $20,000 to $50,000, while more complex, feature-rich apps can cost $100,000 or more.

How long does it take to build a loyalty app?

The timeline for developing a loyalty app can range from a few months to over a year, depending on its complexity and the development team's resources. A simple loyalty app may be built in 3 to 6 months, while a more feature-rich and intricate app could take 12 months or longer to complete.

Loyalty App Development With Hive

A reliable partner can make the difference between an app that effectively engages customers and drives business growth and one that falls short of expectations. The importance of this decision lies in the partner's ability to understand your specific business needs, possess the technical expertise to bring your vision to life and provide ongoing support and maintenance to ensure the app's success.

Hive is a trusted technology partner that has a track record of delivering innovative and user-friendly mobile applications. Our team offers a comprehensive range of services to help businesses create loyalty apps that align with their objectives. From initial concept and design to development, testing, and deployment, Hive can guide you through every step of the app development process. Our commitment to delivering high-quality solutions, tailored to your unique requirements, makes us a valuable partner in harnessing the power of loyalty apps to enhance customer engagement and retention.