Ah, the punch card. It’s such a simple and pure concept: buy from the same retailer enough times, and you get a reward. While that concept may never die, the form has dramatically changed.
Some small businesses still offer the small, punch-able piece of cardboard that you have to carry around in your wallet, but many entrepreneurs are now toying with ways to adapt the punch card to contemporary spending habits by creating loyalty Apps.
According to eMarketer, people spent a staggering $25 billion on mobile purchases in 2012, and that’s up 81% from the year before. From a consumer point of view, apps make sense. We obviously like spending on our phones. Using a company’s app to earn rewards and discounts is a great way to enhance our shopping experience.
If you think an app might be a good solution for your business, follow some of these basic rules of thumb.
Make it mobile-specific
It sounds obvious, but your app shouldn’t just offer something that a user can get on her desktop computer. A store locator, for example, is convenient, but by itself might not justify an app.
It’s important here to make a distinction between mobile and online shopping. Browsing and buying on a site like Amazon is great for convenience. It’s ideal for anyone who doesn’t have time or energy to fight crowds and lines, or just doesn’t want to make the drive to a brick and mortar store.
However, app users actually like the experience of shopping on site. In fact, in a different study, eMarketer found that 94% of total retail purchases are made at the store itself. Design your app so that it plays on the experience of shopping in person.
Obviously, not everyone is interested in the same products and services. But thanks to data tracking, stores can now target deals to specific consumers, which is another reason why apps are great for both business and consumer. Stores can customize their deals and potentially make more sales, while shoppers don’t have to spend time looking at things they don’t want.
For example, Pirq is a retail app that lets shoppers scan items that they’re interested in. If the user has integrated the app with their Facebook account, Pirq will create deals for you based on your particular demographic.
Meanwhile, other shopping apps like Perka and Belly allow the retailer to collect data on customers, and send them targeted emails based on past purchases, thereby staying on consumers’ radar even when they’re not in the store, and increasing the chances that they’ll return.
Engage customers directly
One of the drawbacks of more traditional advertising is that businesses can’t engage directly with their customers. An app that customizes deals for people on an individual basis while they’re in your store is a great way to urge them towards a purchase. But how do you get people to engage with you while they’re not physically present?
A big advantage of apps is their location ability. For example, using previously collected data, Punch Card has the ability to locate shoppers who are in the area. It then sends them a notification in an attempt to draw them in. The app can even entice them with a limited-time offer, adding a kind of ticking clock to an appealing deal in the store. Presumably, if a customer has already added your app to her phone, she wants to receive this kind of information.
Let customers network for you
Social media can be great for businesses. Brands can use networks like Facebook, Twitter and LinkedIn to spread the word about themselves, build loyalty and even generate sales. The downside, however, is the competition. Because it’s free and popular, you have to compete with everyone else to make your voice heard. In addition, turning fans of your business into brand ambassadors (i.e., getting them to talk about you favorably online) is challenging.
Which is why an app gives you a competitive edge. Many retail apps wisely come with an integrated social media feature that lets customers share their experience through Facebook, for example. SpotOn, another loyalty app, actually rewards users for engaging with the company on social media. If you like their business, you earn a Spot, which can be converted to a reward later on.
Businesses can use the app to run entire campaigns through Facebook and Twitter, converting Likes and shares to store visits and vice versa. If the customer refers your business to a friend, she gets rewarded for that as well.
To see how an App can benefit your business, check out SPINX’s mobile applications.