Dec 12, 2014 | Customer Retention Strategies That Work

Branded App For Customer Loyalty – Good Idea or Bad Idea?

Kane Russell — Marketing at Thanx by Kane Russell — Marketing at Thanx

Everyone knows that "there's an app for that." But for brick-and-mortar merchants and their loyalty programs, does there really have to be? 

branded-app-for-customer-loyalty

Picture it - you unlock your smartphone, scroll to your favorite screen, and click on your own brand's logo. It's enough to get any merchant excited about the prospect of having a branded app for customer loyalty, purchases, ordering, games, and whatever else. However, is a branded app something that customers actually want? Here's how to make the best decision for your business. 

Understand what you're getting yourself into

Not surprisingly, apps don't appear out of thin air. They require design, development, and ongoing management – i.e. a significant cost both in terms of money spent and employee time. 

Estimates vary, but at minimum expect to pay thousands of dollars just to get started. From there, plan to spend money to market the app so that it stands out against millions of other apps vying for people's attention. App users are a tech-savvy demographic that cares deeply about app store ratings, so you'll need to pay someone to monitor the app on an ongoing basis. Nothing changes more quickly than technology, so eventually you'll need to pay to refresh the app so that it's up to the latest design and technology standards.

Essentially, businesses that run into trouble see launching a branded app as equivalent to purchasing a new television. Not the case. Launching a branded app is equivalent to having a baby. Some businesses just aren't ready. Those that are have structure and resources in place to nurture a new life and ensure it grows up to be a productive adult. 

Do your homework on consumers' use of apps

Apps do not install themselves onto consumers' phones. Merchants have to offer an incentive to convince consumers to download. From there, apps don't open themselves, as 25% of apps are downloaded once and never used again. Merchants have to create an engaging user experience. Finally, consumers only use apps they care about. Yes, overall app usage is up, but branded app usage is not. Merchants have to make sure that their branded app serves a clear purpose.

Everyone's favorite example of a successful branded app for customer loyalty is Starbucks – and with good reason, as the company demonstrates innovation often. What's not talked about as much are the reasons why the app has been effective. Starbucks has tons of high-frequency customers, operates a high-margin business, and understood loyalty long before launching an app. Plus, Starbucks got into mobile payments before the introduction of new technologies like Apple Pay. The Starbucks brand and business model make its app the exception, not the rule. 

Bottom line, merchants should ask themselves one question before launching an app: Am I doing this for my customers or out of vanity? If it's the latter, probably best to allocate budget to a different project. 

 

Combine the best technology solutions

For businesses that are both prepared to invest in an app and have a clear use case for their customers, the next step is actually going out and building something (or, perhaps, getting something built). What can't be stressed enough is how important it is to find a solid technology partner. Where most merchants run into trouble is assuming breadth equals depth.  

Think of it this way. McDonald's recently decided to reduce the number of menu items to "regain its burger leadership." Hewlett-Packard split into two companies. It's extremely difficult for one business to be good at everything. In technology, this is only more true. The speed of innovation is such that companies constantly have to keep up. 

So, when looking at how to build a branded app, find providers who excel at specific technologies rather than trying to find a one-size-fits-all solution. Choose best-in-class technology for loyalty, for ordering,  for games – whatever features you need. No company will be able to do all really well. Companies that try will inevitably create an app that has a poor customer experience – with poor customer experience comes low app store ratings, which kills an app's marketability and prevents widespread adoption. 

Create an effortless user experience 

In many cases, the best apps are the ones that don't require constant customer attention. Music apps, for example, work because they integrate into consumers' daily routines. If an app requires customers to constantly monitor what's going on, app fatigue will set in. Being trendy is very different than being valuable. Focus on value.

For example, when it comes to customer loyalty within an app, try to elimiante extra steps at checkout. Forcing consumers to open the app every time they enter the store sounds good on paper. However, if their checkout time increases due to scanning QR codes, checking in, or whatever else, no amount of consumers beyond early technology adopters will ever engage. Like anything, build the app for the pragmatic majority

 

Throw your brand and effort behind the branded app

To recap, here's our checklist:

  • A merchant has the required resources
  • Homework on consumer use of apps complete
  • The best technology solutions selected
  • An effortless user experience created

At this point, a branded app for customer loyalty is definitely a good idea. Success is only one more step away: integrate the app fully into a customer's brand experience. Market the app on the company website, have employees talk about it in-store, make it part of the customer feedback loop – everything. Taking these steps not only ensures that more consumers have the opportunity to engage, but also builds trust: the two ingredients needed to ensure downloads, continued use, and value for the end user.

Any questions about a branded app for customer loyalty, payments, games, or anything else? Fire away in the comments. 

 

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