Lessons from leading loyalty programmes: How mobile can drive engagement

Around $100bn worth of loyalty points are unclaimed. Brands that want to create effective loyalty programmes need to figure out why their customers don’t spend their points and learn what they can do to remedy this behaviour.

While some people may be saving their points for a better reward, others are just not engaging with the programme.

Perhaps there’s a lack of communication from the retailer, or the customer sees the communication as intrusive rather than intuitive. Maybe they find the redemption process a nightmare, or they just lose their loyalty card in the mass of plastic in their wallets.

Here are five ways that brands are using mobile technology to revolutionise their loyalty schemes.

1. Mobile apps

Apps offer brands a great way to make rewards and redemption easy and tailored to the individual. People usually have their smartphones to hand, and they’re eager to use apps that take the drudgery out of their days. 

Hudson’s Bay Netherlands uses its mobile app to collect customer purchase and browsing data, allowing it to make its reward programme a hyper-personalised experience. The app is designed around customer choice with customers clicking to participate in certain promotions or offers. Because it’s all about customer choice, loyalty members feel more in control and engaged in the programme.

Gregory’s Coffee is a New York coffee chain that’s developed an app to reward customer loyalty. The Gregulars App gives customers $5 for every $50 spent via the app and provides a $5 credit for just downloading it. It provides easy access to reward information; gives customers birthday rewards and offers exclusive access to special offers. 

The Gregory's Coffee app gives customers $5 for every $50 spent via the app and provides a $5 credit for just downloading it.

Customers can even use it to tip the barista. It makes the whole process easier and exclusive.

Pampers UK has the Pampers Club, an app that lets parents collect points that they can spend on rewards to treat themselves or their babies. Members can even use their points to donate medical aid to charities (for example, to donate one newborn tetanus vaccine to Unicef cost 50 points).

The scheme gives people a 500 point welcome bonus and people can use the app in-store by taking photos of the receipts; for each £1 spent, 10 points get added to their account within 30 days. The value of the reward increases with spending, so customers can save for high-value rewards (such as a diamante photo album for 3500 points) or set a smaller goal (like saving 1000 points for a £10 Spotify eGift card).

2. Mobile payments

The Samsung Pay app, is part of Samsung Rewards, giving customers 10 points per app purchase. US customers can work towards rewards like Sephora gift cards or VR headsets. They can also earn more points by connecting the Samsung Health app to the programme. The programme uses a tier system – so members who use the app more can get better rewards.

The scheme resulted in a “surge” of people using the payment app in America. The payment app launched in the UK in May 2017 where users can add their various loyalty card details to it, and use it on TfL services.

Food retailer SPAR announced a new loyalty and mobile payments app. Shoppers open the app, scan a QR code at the till and payment is taken, and voucher redemption and loyalty card updates processed at the same time, speeding up the check-out process. The extra consumer data is used to personalise offers and improve promotions.

3. Wearables

Brands are also starting to use wearable tech to gather accurate data on how customers use their services, enabling them to improve their experience.

American pharmacy chain, Walgreens, links its reward scheme to its member’s activity and wellness – for example, members can earn 20 points per mile they run, walk or cycle. This lets the brand stay in touch with people’s ambitions while supporting them and rewarding their efforts with something meaningful to them.

4. Location-based services

Some brands are using mobile technology like geo-fences and beacons to target advertising at specific people, or groups of people in an area. While an in-store beacon can send targeted and timely offers to people in and near the store, a local fast food branch may prefer to geo-fence the nearest university campus to advertise directly to the students. When used in conjunction with data analytics and apps, brands can ensure that their offers are as relevant as possible.

When used in conjunction with data analytics and apps, brands can ensure that their offers are as relevant as possible.

Comarch’s Future of Retail survey found that 55% of UK consumers had a ‘high-interest’ in real-time personalised offers provided in-store (with 29% very interested in getting such offers when they were near the store). There’s clear demand for these services, as innovators in this area have discovered.

In the UK, Tesco used location-based technology to target people walking by its new Villier Street store with offers that would be relevant to them. They used a geofence to identify people who were frequently in the area and were able to market to them as locals.

In America, the National Hockey League team, the Pittsburgh Penguins, used location-based tech and beacons to improve their fans’ experience by running location-based offers and rewards (delivered via beacon in home arenas and geofences while playing away).

5. Virtual reality

Home improvement store, Lowe’s, let’s customers tour their planned kitchen design in VR before they buy. While not tied to a specific loyalty scheme, it’s a way for the retailer to create the foundation of trust that a long-term loyal relationship depends on.

For a loyalty programme to reach its potential, brands have to run it in a way that fits with people’s lives. It shouldn’t be just another thing people have to remember. That’s a sure-fire way for people to forget about it.

The good news is that many brands are starting to use mobile technology to blend their loyalty programmes into people’s everyday lives. They’re making them more convenient to use, using them to generate personalised rewards and to provide timely offers, but there are more opportunities for brands to take advantage of.