Written by
Benjamin Daniels
7 mins read
How to build a loyalty program strategy on your mobility app
As the shared mobility market grows, so will the importance of customer loyalty. For one, loyal customers spend more money and time with your brand. Furthermore, they are more likely to recommend your shared mobility app to their friends. To maximize your chances of success, you need to create a loyalty program strategy! In other words, how will you create a user experience that turns new customers into loyal advocates?
Previously, we discussed how customer loyalty drives growth for shared mobility. In this article, let’s see how we to build on that and create an effective loyalty program strategy.
- What is a loyalty program strategy? (and how it works)
- 8 statistics that illustrate the importance of customer loyalty in shared mobility
- The psychology behind a loyalty program strategy
- 7 steps to creating an effective loyalty program strategy
- How to measure the success of your loyalty program strategy
- Optimizing the cost of your customer loyalty program with gamification
- How StriveCloud helps you create a gamified loyalty program inside your shared mobility app
- FAQs
What is a loyalty program strategy? (and how it works)
The goal of a loyalty program strategy is to increase long-term customer loyalty and encourage repeat business. By offering rewards such as discounts, points, or other incentives you can even boost the number of trips booked, or the total amount of miles per trip!
Unfortunately, most loyalty programs are just a mess of random and undirected rewards. They throw points or discounts at customers in the hopes of keeping them engaged. However, these rewards don’t feel earned, or even useful to customers.
Luckily, a great loyalty program strategy can change that! First of all, you need to create a narrative around your customer experience. Secondly, rewards should feel ‘earned’ and ‘desired’. In other words, go beyond just discounts. What behavior do you want to see clients act on? Rightly timed rewards can positively reinforce this behavior and lead to long-term customer growth!
For instance, the shared mobility service HumanForest rewards customers with free riding minutes, while also visualizing the positive impact they make on the environment. This combination of intrinsic and extrinsic rewards fuels motivation and leads to true brand loyalty.
In short, creating a successful loyalty program is not a cut-and-paste job. So if you want to reward and incentivize customer loyalty, you need a loyalty program strategy built around your brand and target audience. After all, what works for one shared mobility app might not work for yours.
#1 54% of consumers like points-based loyalty schemes
Points are popular! What’s more, collecting points is even more popular among younger audiences – an important target group for mobility operators. In a Deloitte study, 60% of those aged 18-24 reported liking gamified point systems.
#2 Shared mobility will be 10x bigger in 2025 than in 2017
Shared mobility is set to grow from $24 billion in 2017 to a staggering $230 billion in 2025. Given this growth, shared mobility apps should expect tougher competition to retain new customers entering the market.
#3 Retaining just 5% more of your users can increase profits by as much as 95%
In a tough market like shared mobility, boosting your profits by keeping customers around for longer can help you develop a competitive edge!
#4 Loyal customers spend 33% more than new customers
Profitability is hard to achieve as a shared mobility app. Starting with hardware like e-scooters requires a hefty upfront investment. And then comes maintenance! By some estimates, an e-scooter needs to be in use for 4 years to become profitable. So you will want to get the most out of your customers, and that means fostering loyalty.
#5 67% of consumers expect to use shared mobility services more often in the future
Data from McKinsey shows that over a third of consumers expect to use more shared mobility services like car-sharing and ride-hailing in the future. In return, these customers will be expecting benefits for their increased usage and loyalty.
#6 Consumers expect a 150% return on their loyalty
According to McKinsey, paid loyalty programs are a great way to fuel both acquisition and loyalty. However, to consistently drive sign-ups you need to clearly illustrate the value of your loyalty program. In fact, customers expect a return on investment to the tune of 150%. In other words, they’re looking for hard benefits such as discounts, free riding minutes, exclusive benefits, special vehicles, and so on.
#7 Discounts greatly improve loyalty among new customers
Creating loyalty begins at the start of the customer journey! If you don’t, customers will leave, which is also called ‘user churn’. Simply put, user churn occurs when customers stop using your service. Luckily, discounts help to prevent exactly that! In fact, a 2021 study into shared mobility apps found that rewarding new customers with coupons limits user churn.
But the effect loses its power after 130 days, illustrating the importance of a loyalty program strategy that takes into account a change in tactics.
#8 82% of Millennials rely on trusted recommendations for buying decisions
Loyal customers provide the best and most trusted recommendations. But why is it so important that Millennials need a personal recommendation? Because Millennials, those aged 25-40, are more likely to use shared mobility apps.
The psychology behind a loyalty program strategy
To successfully foster loyalty, you need to understand your customer journey. And every customer journey relies on many psychological triggers to progress:
- Reciprocity. Customer relationships require both give and take. In short, when customers trust you with their time and money, you need to reciprocate! Your loyalty program strategy can plan for this by rewarding customers for their first ride with a free entry into a lottery or a discounted journey.
- Exclusivity. A generic loyalty program is not good enough. Your program needs to feel personalized to each customer. In other words, you need to link rewards to customer behavior and immediate needs. To do this you’ll need to connect your app data directly with your loyalty program.
- Positive emotions. This one is simple. It feels good to be recognized and rewarded. Positive reinforcement, like earning points, can help establish an emotional connection between you and your customer.
- Gamification. The use of game-like elements in a non-game context. This makes the experience more fun and memorable. It motivates customers to engage with your loyalty program, and keep coming back. For example, by introducing variable rewards or progress indicators!
If your loyalty program strategy can unlock these psychological triggers, you are on the road to success!
7 steps to creating an effective loyalty program strategy
#1 Learn from the competition
Many shared mobility apps have loyalty programs, but you will want to look deeper into your direct competition. Can you work out what they are trying to achieve? This step is useful to help differentiate your mobility service from the competition.
#2 Set goals that will help you achieve your business objectives
Think about what actions your customers can take in order to help you grow. Besides increasing the number of trips booked, or the distance covered, you could also reward customers for other initiatives. For instance, when they refer a friend or partake in a social media marketing campaign.
#3 Find out what motivates your customers
The basis of any successful loyalty program strategy relies on your understanding of what motivates your customers. Offering relevant and meaningful rewards are detrimental to success.
#4 Design a gamified experience to reinforce customer loyalty
Next up, you must devise a gamification design plan that aligns with your overall loyalty program strategy. What will you do to trigger and reward desired customer actions such as booking a trip, or completing a certain number of miles? In what ways can customers earn points? And what can they do with those points?
Additionally, these rewards should feel well-timed and earned. That way, customers notice a clear correlation between carrying out an action & earning a reward.
#5 Implement your loyalty program
It’s showtime! You don’t have to start by launching a complex program at once. In fact, doing too much might be overwhelming for existing customers. Luckily, the beauty of gamification is that each feature works as a part of a whole, but also on its own.
Points or in-app currencies for instance are a great way to incentivize customers. It can be exchanged for a variety of different things such as free-riding minutes and webshop items,… Depending on the stage of your loyalty program and customer lifetime this can become increasingly more complex. You can even organize raffles among customers!
#6 Collect feedback from your customers
The first thing you want to do after implementing your loyalty program strategy is to ask for feedback from your loyal customers. What works well? Double down on it. What can be improved? Listen and tweak accordingly.
#7 Tweak and improve your loyalty program
There are always improvements to be made! That’s why it’s important to have a flexible toolkit that lets you change things quickly and easily.
How to measure the success of your loyalty program strategy
To ensure your success, you need to measure your progress. But while there is no simple measure for loyalty, there are a few metrics that shared mobility apps can use to track the success of their loyalty program strategy.
Participation rate
What percentage of customers actively partake in your loyalty program? What are the similarities between customers? What do they use it for? Knowing who uses your loyalty program, and how will help you to keep improving the overall experience.
Participation rate = Active loyalty program users / Total customers
What’s great about using a platform like StriveCloud is that it removes an initial barrier to engagement. Because the loyalty program remains inside your shared mobility app it feels more like an extension rather than an addition. Therefore, customers don’t need to sign up elsewhere or leave the app to get the full benefit!
Customer lifetime value (CLV)
A loyalty program should provide a boost to your CLV. In other words, customers remain longer, and spend more and more often. As a result, your overall value per customer should increase.
CLV = Average transaction * Annual purchase frequency * Expected years of loyalty – Total costs of acquiring and serving the user
Customer retention rate
Loyal customers stick around for longer. Therefore, a rise in customer retention should indicate an increase in customer loyalty. In short, the higher the number, the better! To effectively study the effect of your loyalty program strategy, you can compare retention among participants and non-participants.
Customer retention rate = Active customers across period / Active customers in previous period x 100
To provide an example, we partnered with HumanForest to create London’s top e-bike loyalty program. And the results were amazing! In June 2022, HumanForest hit a record 150,000 trips – and 70% of these trips were made by repeat users!
Optimizing the cost of your customer loyalty program with gamification
Gamification is the use of game-like elements and psychology in a non-game context. It makes the experience more enjoyable and memorable. Therefore, customers are more likely to engage and keep coming back to your loyalty program. Furthermore, it helps to scale customer loyalty without spending lots of money on discounts or special perks!
Investing in a loyalty program can be costly – but it doesn’t need to be. In fact, monetary rewards only go so far. To really motivate and keep customers engaged you need a mixture of extrinsic (monetary, discounts, hard benefits) and intrinsic (personal achievement, purpose,…) rewards.
So, you don’t need to reward users with free minutes and cash prizes to get them engaged! In fact, research finds that gamification features like badges and points are more affordable AND more motivating than any financial reward!
“We’ve played around with a number of incentives including cash rewards versus badges and points, and badges and points win out every time over cash, over anything tangible, and it’s across every demographic.” – Charlie Schroder, Digital Strategist
In brief, by creating a deeper level of motivation with gamification, you can entice customers to come back and spend more – and ultimately foster long-lasting loyalty.
By now you probably see the value of a loyalty program strategy that makes use of gamification. Not only does it increase overall metrics, but it also helps to limit your costs.
So how can we help you on this journey? Our team of gamification experts has worked with multiple mobility operators to drive loyalty and growth. Here are the three steps we use to do it:
- Book a consultation & workshop. Join us for a workshop and let’s achieve growth! Together, we will identify the best solution for your challenges, as well as how to engage your specific audience.
- Set up! We’ll integrate the new features straight into your mobility app. Easily edit & change them from a control panel, live into your app!
- Onboarding & support. We’ll train your team on how to use our software so they can easily manage the experience themselves! How can you customize features to fit your loyalty strategy?