How to Retain Food Delivery App Customers with Loyalty Programs?

Most of the customers trust a brand when they are being rewarded.

In the Food Delivery business, it is really important to hold the customer base. Therefore for businesses, it is a top priority to build and sustain customer loyalty with the mobile application.

Today, most smartphone users are using the loyalty rewards on a frequent basis. According to a survey conducted by the National Restaurant Association, building effective customer loyalty and increasing the retention rate of customers through app-based rewards programs is a successful strategy.

Loyalty benefits provides business with a platform where they can run multiple marketing strategies and target different customer base to expand their horizon. Many customers use the application to save a good amount of money while others prefer the convenience of ordering online.

In a survey by HelloWorld, 61 percent of respondents stated that the most important way a brand could interact with them was by surprising and rewarding them for being a good customer. Competing for customers’ trust should be among the ultimate goals of a business.

What is the Customer Retention and Customer Loyalty Program?

Customer retention is the collection of activities a business uses to increase the number of repeat customers and to increase the profitability of existing customers.

Customer retention strategies enable you to both provide and extract more value from the existing customer base. If you wish that the customers you worked so hard to acquire stay with you. To retain the customers, it’s advised to provide excellent customer experience and offer meaningful value from your products.

Now, let’s talk about “What is a Customer loyalty program?”

A customer loyalty program is an initiative run by a brand or a company that offers benefits to frequent customers. Those benefits may be in the form of

• Discounts
• Rebates
• Free products
• Other promotions

Most Common Loyalty Programs for the Food Delivery Business

The following are the various types of successful loyalty programs that the food delivery business can embrace:

1. Redeem Points: You can create Loyalty Programs that accumulate points in the customer’s account based on the amount they spend from the app. They can collect reward points on a certain amount. For instance, 1 point can be collected on every $25 spent.

2. Paid loyalty Programs: Here the customers pay a membership fee and get access to special services, discounts, or exclusive opportunities which enables the businesses in identifying the most engaged customers. These successful rewards programs help in getting a rapid ROI. The customers who pay for loyalty programs are associated with the brand or business from the start and keep on investing.

3. Spend Program: In this program, consumers access loyalty credits for a certain amount they spend in a timeframe. In this loyalty program, the benefits of the loyalty credits are directly proportional to the spending. It encourages customers to spend more and helps to increase transaction amount.

4. Referrals/ Invite Friend: A referral program is a most popular loyalty program especially for business, which is new in the market. It is an organized way of convincing people to make referrals to the business. In return, they can get instant cash-back, discount coupons or loyalty credits that can be redeemed later.

Importance of Loyalty Program in a Restaurant’s Food Ordering App

Loyalty programs are known to be a strong point for food delivery chains. We make up our point, the following are the significance of loyalty programs that can impact the restaurant’s loyalty program app in a positive manner:

1. Loyal clients are Economic: The primary objective of the loyalty benefits is to provide a personalized experience and tighten the customer relationship with the brand. Hence, it is crucial to delight the customer base regularly, as acquiring new customers is a challenging task in the pool of competition.

2. Loyal Clients Seldom Leave: A brand having a good customer base can survive in the toughest situations also. The customers will never lose faith in the services and offerings of a company because of the loyalty benefits that they are served with. Also, by sharing regular feedbacks, the operations can be improved.

3. It Provides Initial Propulsion to Business Growth: Each type of loyalty program is proved to yield different results. As a marketer, you must never overlook, underestimate, or overestimate a marketing plan without employing and observing its impact on the business.

4. Helps Build a Reputation and Maintain Brand Image: With loyalty programs, the brand image can be enhanced in multiple ways. By including a loyalty program in the mobile food ordering application, customers can get instant benefits of the purchase that they have made in the form of discounts or cash backs. Such benefits motivate the customer to share the application with their friends and family, helping in acquiring the new customer base.

5. Increases Sales: By rewarding loyal customers and with the proper customer retention strategies, every brand can increase its sales.

Benefits of Loyalty Programs

Only 3% of new visitors who make the first purchase, return to buy again. This is an alarming statistic for sire, especially after you’ve spent so much on acquiring them. But by educating the customers about the benefits of a loyalty program, you can expect to add on to the existing user base.

The following are the many financial and non-financial benefits of a loyalty program:

1. Stop Competing on Price With Competitors

Adding a loyalty program can help you in differentiating among the offerings. You can offer an enhanced customer experience by connecting with the customers’ emotions. Studies have shown that when a customer makes a purchase, it’s highly emotional.

If you sell a product that people buy through desire instead of a necessity, then appealing to their emotions is key. A loyalty program gives you a way to surprise and delight customers by rewarding them for something that previously went unnoticed.

Every time you reward your customers for their shopping activities (sign-ups, referrals, purchases, etc.) you will appeal to their emotional side and builds a connection with them.

2. Retain Existing Customers

One of the main benefits of loyalty programs is that it can help to retain existing customers and turn them into loyal ones. Customers are bound to remain loyal to a brand that surprises them.

3. Increase Customer Lifetime Value

Customer Lifetime Value is the net profit attributed to the overall relationship you will maintain with a customer and is a great way to engage audience. It measures how valuable the customer is to you now and the projected value of all your interactions with them in the future.

A loyalty program can help you calculate exactly what the customer lifetime value is for each of your customers, and help you wield those statistics into usable data for implementing solid strategies for customer retention.

4. Build Personal Relationships

The first step to build the emotional connection and store loyalty is by showing the customers that you truly value them. This can be achieved by building genuine relationships with customers.

5. Proven to Boost Growth

Different customer loyalty programs deliver diverse outcomes, yet after some time, all the programs add on to the positive growth.

6. Cost-Effective

An existing customer is up to 7 times more affordable than securing a new customer. It makes loyalty programs financially savvy, and the slight cost the business may bring about ought to be surpassed by extra business generation. Being financially savvy is one of the best advantages of customer loyalty programs.

7. Improves Reputation

By executing a loyalty program, you can expand customer appreciation and increase the potential that current clients will share their satisfaction with others around them.

Customer loyalty programs can serve in double capacity:

• Guarantee that current clients feel esteemed
• Boost new clients to keep patronizing your business.

The more a customer feels that business acknowledges them, the more he or she will get the message out. Word-of-mouth advertising is one of the cheapest and most effective approaches to grow a business.

8. Increases Sale

Business owners and marketers appreciate the advantages of customer loyalty programs since they upgrade and enhance customer retention levels. Customers enjoy the programs because the business owner enhances the customer’s purchases by increasing the rewards, which helps in sustaining the customer with the brand and it results in enhanced sales figures too.

Customers engage in loyalty programs only if it doesn’t call for extra time and effort. A seamless and simple scheme with instant rewards can do wonders.

For example:

• More than 80% of US customers are more loyal to brands, when they participate in dedicated rewards programs.
• More than 70% of shoppers are more likely to participate in a loyalty program if they can easily access loyalty cards and rewards from their mobile phones.
• Loyalty programs also gather relevant data and build relationships with customers.
• The aim of any loyalty program is to offer a personalized experience and tighten customers’ relationship without flooding them with the information they don't care about.
• Companies that track consumer behavior like previous purchases, product attributes, and purchase context – can create highly customized and targeted offers.

How to Boost Customer Loyalty With a Mobile App

There's no point in developing a loyalty program that is difficult to join and to participate in. Certain features and functionalities of mobile apps can change the way you motivate customers to stay loyal:

1. Instant Rewards: Rewarding a customer every time they choose the brand over another is a great incentive for them to stay loyal. Mobile apps make it easier to collect reward points and exchange them for rewards using a centralized platform that customers can easily access.

2. Product Recommendations and Timely Promotions: Study the customers’ interactions on the loyalty rewards app to determine consumer buying behavior and buying preference. You can use this data to offer relevant products at the most convenient time to increase conversions and boost brand loyalty.

3. Messaging and Push Notifications: Engage with customers and encourage them to offer feedback. Messaging also provides reliable information about the brand and keeps the customer updated.

4. Shared Experiences: Encourage customers to share their accomplishments and rewards using social media buttons or referral codes to spread awareness about their positive experiences on the app.

Examples of the Best Mobile App Loyalty Programs

Some brands recognize the potential of mobile loyalty programs and have developed their own ways to boost brand loyalty through the mobile app. The following case studies demonstrate the benefits of a customer loyalty app for a company:

1. Starbucks

Starbucks has the most-used mobile app among major restaurant chains. The reason behind such an achievement is that its engaging loyalty program is quite popular among its customers.

The app allows customers to:

• Pay by phone
• Enjoy in-store refills
• Take advantage of customized offersn
• Collect points for every dollar spent, which can be exchanged for food and drinks

The app also keeps customers informed and engaged without displaying irrelevant content. It’s straightforward and intuitive, providing only the newest offers and personalized discounts.

2. Dunkin’ Donuts

The Dunkin Donuts Perks Rewards Program was launched in 2014, as a way to reward guests with points toward free beverages for every visit they make. The program now touts more than six million members nationwide. The use of the rewards program and the chain’s continued emphasis on digital appears to be leading to larger ticket sizes.

“On-the-Go Ordering” is now available for all members of the DD Perks Rewards Program, allowing customers to order, pay in advance via a smartphone or other mobile device, and then pick up an order. Orders can be made up to 24 hours in advance.

The Dunkin’ Donuts loyalty app has been shown to increase a customer’s lifetime value by 30% or more through increased visit frequency and amount spent per visit.

Components of an Effective Loyalty Program

All loyalty programs boil down to a simple concept – customers are rewarded for taking certain actions.

1. Simplicity is the Key: A strong foundation is what creates effectiveness. To make the program more effective, keep it simple. Increased complexity creates increased confusion, hence the trick is to start simple and add functionality over time.

2. Motivate Customers: A properly planned and executed program can foster a relationship between the two.

3. Measure Your Success: Strive for customer feedbacks and ways to enhance the current program. Else, create a comprehensive worthwhile loyalty program in the very first place.

4. Make it Rewarding: The loyalty scheme should be rewarding and ensure that the customers are working towards something they actually want. There could be a host of rewards:

• Money off vouchers
• Exclusive offers
• Using points to buy things

Actions for Which, You Can Reward Customers

1. Reaching Spending Targets: For instance, when a customer reaches a spending target, they might get 10 % off their next purchase of $100 or more. Keep in mind that limited-time offers are likely to encourage prompt purchases.

2. Reaching a Target Number of Purchases: Once a customer reaches a purchase target, they qualify for a free item as a gift or receive discounted membership.

3. Giving Feedback About Goods or Services After Free Trial: Asking consumers to provide feedback on a new product before you launch gives them a sense of ownership, which may lead to higher sales and positive word-of-mouth recommendations.

4. Recommendations to Friends: Offer your customers discounts and gifts in return for every new customer they bring to you.

5. Other Actions: Allow customers to earn points for multiple actions. These might be viewing product videos, using your mobile app, following and sharing social network content, and subscribing to your blog.

Loyalty programs are the key essentials to push customers to engage with the application. Because it is very difficult to maintain the consumer’s interest.