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Features to include in your Loyalty and Rewards-based App

By Girish Agarwal
February 11, 2021. 6 min read
Last update on: February 11, 2021

Rewards, cashback, and loyalty points- they all are an exciting form of bringing customers back to the site/app and help ensure repeat purchases. Who doesn’t love to get rewarded? Customers possess a strong liking towards brands or apps that reward them for purchases. The fact that popular brands like Starbucks, Amazon, and Flipkart use loyalty and reward-based programs is evidence of it. Flipkart rewards its customers with SuperCoins for every purchase which they can redeem on their future purchases, or on the other attractive offers available inside the merchant app.

Stats by Invesp suggest that 64% of retailers find loyalty programs to be the best way to connect with their customers. 69% of consumers say their choice of retailer is influenced by where they can earn loyalty/reward points while 83% say that loyalty programs encourage them to continue doing business with certain brands.

Today, we will learn the benefits of loyalty and reward-based programs, and if you are planning to launch such an app, then what features you should include in it during loyalty app development.

What are Loyalty or Reward-based programs?

These are the programs wherein you reward a user/customer for taking an action that you wanted them to take. It could be related to a purchase, inviting someone on your platform, spreading the word on social media, or anything for which you feel they should be rewarded. Although it is nothing new in the grand scheme of things, these incentive strategies tend to be quite effective if implemented well. There’s a reason why brands are investing heavily into their reward and customer loyalty programs.

But what makes loyalty programs so important? Well, money isn’t free-flowing, especially for small businesses. They need to make crucial decisions regarding their investments, for instance, whether it should be spent on acquiring new customers or retaining the existing ones? Customer retention often wins the deal at this point, and for that matter, winning their loyalty becomes an important task for the businesses to focus on. This is not just an assumption but based on stats. Reports have shown that a 5% increase in the customer retention rate boosts the overall business profit by up to 95%. And around 52% of customers say that they will prioritize those brands where they have their rewards or loyalty points stored.

Key Features to include while developing Loyalty and Rewards-based app

If you are thinking to build a loyalty and rewards-based app, here are some of the key features that you should integrate into it to make it more convenient and user-friendly.

1. Push Notifications

Push notifications are extremely important for any mobile app and not just a loyalty app. Customers need to be informed of the various offers or reward schemes available in the app. So integrating push notifications on the basis of a reward system that keeps the users engaged and makes them remain loyal to the brand is crucial during loyalty app development. These notifications help maintain the touch between brands and their customers and are being leveraged by the former in different ways to connect with the latter. For example, Starbucks leverage location-based push notifications in their app to send targeted offers to the users. It tracks a user’s location, analyzes their purchase history, and whenever they pass by a Starbucks outlet, they are sent a notification of an offer so they could claim it by visiting the nearby store.

Push notifications are constructed using two APIs, one being the Notification API while the other is the Push API. The former allows the app to display notifications to the user while the latter lets a service worker manage push messages from a server, even when the app is not being used by the user. Both APIs are built on top of the service worker API that acknowledges the push messages in the background and passes them on to the mobile app.

With the right tools integrated into a system, the product owners can identify customer segments who possibly have not been engaged (not using the application enough or not utilizing their “earnings”). There are provisions to filter out the correct segments and the product owners can only send reminders or special offers to such users.

Notifications should be sent with appropriate frequency to avoid swamping consumers; impacting their affinity with the application.

2. Reward-based system

Rewards won’t be of any use if they aren’t attractive. Unless they create a sense of excitement in the users, they won’t help increase customer loyalty. Ensure they provide some value to the users. At the same time, the app must also have a mix of rewards. A rule engine needs to be created to implement a reward system that involves the conditions based on which the rewards would be provided. For example, some loyalty rewards can be provided when the users purchase something or after they reach the target number of purchases while some can be offered when they leave a product review or recommend your product to someone else. Rewards can also be provided in the form of badges. Based on the user’s purchases or activities over time, badges can be upgraded and would be linked with the user’s profile.

But how would those rewards be explored by the users? For that, you should build a segment in your application where users can check their collected points, their usage history, the remaining points, and all the important information related to it.

The architecture should be such that the rule engine can be enhanced and remains scalable. The product owners should be able to add newer and more complex rules in the future as and when the business need arises. The rewards may be associated with different segments of the application and the transition from one screen to another should also be smooth. The product owners may also want to track the user behavior with regards to which rewards and offers are being redeemed the most and the business can then take a call to engage more or change rewards accordingly. The architecture and longevity of the application is the key.

It’s also important for you to assess how rewards are being distributed. For example, in case of a learning system where the app rewards users with some points for every video they watch, the system should be able to monitor how that particular task has been approached. It is possible that the user watched the video by fast-forwarding or stopped a few seconds before the video ended. Here, you will have to define how you would assess completion and offer rewards accordingly.

3. Integrated Checkout Redemption

There’s no point rewarding points to the customers if they can’t easily redeem them at the time of checkout. Whatever points users have garnered over time, allow them to use those points at the time of payment by automatically subtracting the points value from their payment. This brings a sense of happiness to the users and enhances their whole experience.

During redemption, the app should be able to recognize and authenticate the users as well as rewards collected by them, and the system should instantly update whatever the cash or points have been redeemed. Similar should be the case when users apply a coupon on the checkout page. The system should be able to verify whether the coupon is valid or not. If it is, then what’s the discount limit for that, and it should be applicable until the user has actually used it in the order to purchase something. In the case where reward points can be converted into cash, API implementation is required so that the app does that task effortlessly. Whenever the user converts points to cash, the API sends a request to the bank to deduct that much amount from the merchant’s end and provide users with real cash in their bank account.

4. Easy Registration

The loyalty app should offer a smooth and easy sign-up process without any friction. The idea should be not to make the users jump through hoops. To facilitate registration, placing the social login options on the sign-up page can be a good idea. Do reward new users with some points upon successful sign-up.

5. Social Referral

The loyalty and reward app must come with a feature that allows users to share or refer your app to anyone across social platforms. But one would rarely be interested in referring unless it offers something in return. So you can start a refer and earn scheme or offer points to users every time they bring a new user to your app.

6. Ease of managing Loyalty Cards

The app should have an easy loyalty card management system so that users do not have to face any kind of inconvenience while tracking them. For instance, Starbucks has its app linked to loyalty cards that allow users to pay for a drink, offer a tip, and refill their card by using their mobile app.

Loyalty and Reward App Development

Wondering what’s the estimated time and cost for loyalty app development? Well, similar to any other mobile app development, developing a loyalty and reward app depends on a few important factors such as the project complexity, whether the app needs to be developed for a particular platform or both Android and iOS, the UI/UX involved, and more.

Since there are a lot of user engagement data points in the loyalty framework, the backend servers must ensure that they are able to handle huge incoming data streams, and computation is fast enough to update the user loyalty profile in an acceptable window of time.

Looking to build a loyalty and reward-based app for your business, connect with us at info@dewsolutions.in or submit your requirement here. Dew specializes in creating world-class loyalty apps. Take a look at one of our successful projects in loyalty and rewards app development.


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