How Digital Loyalty Programs Are Driving Significant Revenue For Retailers

The best performing eCommerce applications over the last few years have something special in common.

They know their consumers’ preferences and habits, and fashion personalized experiences that reward deeper brand relationships. Giants such as Amazon, Nike, and Starbucks all drive unimagined revenue in this way.

50% of total sales from the flagship stores in California and Shanghai came through Nike’s mobile app last year, and Nike rewards their most loyal consumers. They may not offer free shoes for loyalty, but they offer early access to new products, free shipping, a tailored and personalized online store, and even a personalized entrance in their Manhattan store.

Amazon, Starbucks, Nike, and many more are incredibly successful in the digital space because they have something that a lot of companies, big and small, don’t: RELATIONSHIPS. By creating closer relationships with consumers, brands can offer unique experiences that lead to deeper engagement, and thus deeper loyalty.

So, how does loyalty actually engage and grow the consumer’s experience with a mobile application and brand. We at Vokal like to use the Hooked Model to create digital experiences.

The Hooked Model is simple. Create internal or external triggers that call a user to take an action. The action the user takes should be tied with some sort of variable reward (like loyalty points, a personalized online store, or a personalized entrance). This reward creates an investment into the application that keeps the user engaged and retained. Once a user is engaged and retained, turning the user into an advocate for the brand is the overall goal (rewarding that engagement is certainly a way to turn a user into an advocate).

hooked model

We like to tie this to the consumer’s lifecycle:

  1. Acquire consumers through testing traction channels and A/B tests on features
  2. Engage consumers in a meaningful experience that rewards actions Retain the right users by improving the experience and rewarding their engagement
  3. Grow the application to promote actions and investment
  4. Advocate - turning the users into advocates for the brand

Rewarding consumer loyalty is a great way to trigger the “reward” aspect of the Hooked Model. Before digital experiences, it was difficult for companies to build consumer profiles and communicate directly to consumers at scale.

Offering a hook, or variable reward, not only gives the consumer a benefit (like a free pizza or access to new shoes), but gives the company the ability to understand their consumer’s individual preferences and consuming habits. These preferences and habits can be used to personalize, curate, and enhance experiences for that specific consumer or even consumer segment. Through personalization, companies can develop a one-to-one relationship with their consumers and offer them rewards and experiences they know will drive engagement.

loyalty and engagement

While loyalty programs may not be new to the eCommerce world, they have been proven to be game changers for mobile experiences. The willingness of consumers to create accounts and profiles for mobile apps, the effectiveness of push notification marketing communications, and the ease of purchase from a well designed mobile experience all offer improved ways to deepen that one-to-one relationship.

How Loyalty Helped This Company Drive $1M In Mobile Sales For The First Time.

We’re extremely proud to have partnered with one of Chicagoland’s favorite eateries to design and develop a smart digital platform that used AI to personalize experiences for each consumer based on the context of their shopping behaviors. Consumers can earn points for purchases and redeem those points for free food, helping the restaurants’ to build relationships with their consumers, increasing lifetime value and engagement.

After releasing the new version of the application, they quickly saw two of the highest grossing days in the app’s history, and also recently reported their first $1 million month. The iOS app store rating also improved from a 2.4 to a 4.8. With their consumers creating creating accounts at a higher rate (so they won’t miss out on the rewards or repeat actions), their organization is able to better understand their consumers’ behaviors, preferences, and activities to deliver relevant promotions and grow their business.

Vokal is continuing to work to optimize their user flows, designs, and the overall experience to achieve desired business outcomes. We're doing this through a series of A/B experiments and a methodical approach to optimization to deliver quantifiable results, proving the value of data-driven product management.

Loyalty programs are becoming more sophisticated, moving beyond the traditional spend-to-get model, and into omnichannel programs that recognize every action a consumer takes and leverages that loyalty data. Organizations that are not digital at their core must embrace the digital-first mentality in order to compete in the modern business landscape, investing in digital strategies that create a strong impact. Once they do, it’s proven they will reap the benefits.

At Vokal, we partner with clients to leverage personalized experiences to cultiate their consumer relationships and grow their business. Let's make something great together.