Last Updated on June 20, 2022

Customer Satisfaction is a key consideration in determining success in the food delivery business. Increasing customer satisfaction can improve loyalty, which is a big advantage as acquiring new customers cost 5 times more than retaining the existing ones. However, most food delivery apps find building a loyal customer base challenging. How can the business get customers on the food delivery app to maintain such loyalty?

The answer is by incorporating loyalty programs in your food delivery app. Loyalty programs have been around for ages only the terminologies have been changing. In the last few years, loyalty programs have been on rising with the growth of the e-commerce industry. Loyalty programs are great marketing tools in the e-commerce industry. From e-commerce to online food ordering apps, loyalty programs give businesses exponential revenue growth.

Today, most food delivery app users are using loyalty rewards regularly. As per a survey conducted by the National Restaurant Association, building customer loyalty and increasing customer retention rate through an effective loyalty program is a great business strategy.

A loyalty program can help your business by giving you a platform to run multiple marketing strategies and target a different audience to expand your business. Many users use a mobile app to save a good amount of money, while others prefer to order food online. As per a survey by Merkle, more than two-thirds of the surveyed people mentioned that one of the best ways a brand could interact with them was by surprising and rewarding them for being a good customer. Competing to gain customers’ trust should be among the business’s ultimate goals.

What Is Customer Retention & Customer Loyalty Program?

Customer retention refers to the metric of measuring customer loyalty or your ability to retain your customers over a period of time. Every business tries to attain the maximum customer retention rate and increase the profitability of existing customers.

Many customer retention strategies let you extract more business from your existing customer base. If you want the customers you worked so hard to acquire to stay with you forever, you have to provide them with an excellent customer experience and other meaningful value. A customer loyalty program will help you achieve this.

Now let’s Know What Is A Customer Rewards and Loyalty Program.

A customer loyalty program in an online food delivery app is a customer retention tool focused on keeping and engaging your customers. This will result in more orders from your app by customers, regular ordering, and frequent interaction with your app. An effective customer loyalty program should be easy-to-understand, with a clear path to rewards, and provide a fun experience. There are many companies that there is no need for customer loyalty programs in the online food delivery business and instead offer only big discounts to the customers. But big discounts can’t retain the customers for a longer time, and providing discounts may result in loss. In an effective customer loyalty program, a company benefits from frequent customers. The benefits can be discounts, rebates, free products, and other promotions.

Popular Rewards & Loyalty Program For Online Food Delivery Apps

In the e-commerce industry, there are many different types of loyalty programs, but some are specially curated for the food delivery business. These are:

1. Redeem Points

This loyalty program collects redeemable points in the customer’s account. The points are given on the basis of their spending in the app. These collects are then usable partially or completely for later orders. For example, if there are 100 coins then 1 coin = 1 unit currency, then 10% of the order amount can be paid through coins.

2. Paid Loyalty Programs

In the paid loyalty programs, customers have to pay a membership fee and they will get access to premium services, discounts, or exclusive customer experience. The businesses can thus find the most engaged customers. These rewards program helps businesses in increasing ROI. The customers who are ready to pay for loyalty programs build a strong relationship with the brand and keep on investing in the future.

3. Spend Program

In the spending program, the customers will get their loyalty credits for spending a certain amount of money within a time frame. In this type of loyalty program, the loyalty credits benefits will be directly proportional to the amount of money spent. This motivates the customers to spend more and helps to increase the average order value.

4. Referrals/Invite a friend loyalty program

A referral program is one of the most popular loyalty programs that the e-commerce industry is using for many years. It is really beneficial for those who are new in the business. In this loyalty program, the users of the app get incentives to invite their kith or kin to the app. They can get instant cashback, discount coupons, or loyalty credits that can be redeemed later.

Loyalty Program Importance In A Food Delivery App

Loyalty Program Food Delivery App

Loyalty programs can be a very strong point to gain business for food delivery apps. They have a huge significance in the mobile app business and can impact the food delivery business in a positive manner.

1. Loyal Customers Are Highly Economic

The loyalty program’s main focus is to deliver a personalized customer experience and make the customer relationship stronger. These programs let you delight your customers regularly as acquiring new customers is more challenging than making your existing customers happy.

2. Loyal Customers Rarely Leave Your Store

If you have a loyal customer base then you can even survive the toughest of conditions. The customers will not lose faith in your brand and in your services because of the loyalty benefits they got over a period of time. Also, by sharing regular feedback the operations can be improved.

3. Provides Initial Acceleration To Business Growth

Every loyalty program is desired to give different results. As a marketer, you never underestimate a marketing plan without knowing its impact on the business.

4. Makes Your Brand Reputation & Image

Loyalty programs can enhance your business’s brand image in multiple ways. In a food delivery app, a loyalty program can give instant benefits of the purchase to customers either in the form of discounts or cashback. Such benefits motivate your audience to share your app with their friends & family. This in turn not just improves your brand image but also brought a new customer base.

5. Increase Sales

By rewarding loyal customers and with proper customer retention strategies the sales will also increase.

Loyalty Programs Benefits

Do you know that only 3% of the new visitors return to your app or store after making the first purchase?

This is a very important statistic that you can’t just forego, especially after spending so much effort and money in acquiring them. However, if you educate these first-time customers about the loyalty program benefits, you can expect them to become your regular patrons. Here are a few benefits of the loyalty programs in the food delivery app:

1. Give You An Ace Over Your Competitors

Employing a loyalty program in your business will differentiate you from the rest of your competitors. If you are connecting with the customers’ emotions then it will result in a better customer experience. Many studies have shown that it is an emotional experience for a customer while making a purchase.

If you are selling something that people buy with affection and not because of necessity, then you must meet their emotions. A loyalty program helps you to surprise and delight customers by rewarding them with something that no one is giving.

Whenever you reward your customers for any shopping activity such as sign-ups, referrals, purchases, etc. then you are appealing to their emotional side.

2. Retain Existing Customers

The loyalty program’s main motive is to retain your existing customers and turn them into your regular patrons. Loyal customers increase the customer lifetime value of your store.

3. Increase Customer Lifetime Value

Customer lifetime value is defined as the net profit you made from a single over a period of time. It measures how valuable is your customer now and the projected value of all your interactions with them in the future.

As a loyalty program helps in engaging your customers to your store and retaining them, it ultimately helps in increasing the customer lifetime value.

4. Build Personal Relationships

As we mentioned above, a loyalty program can be an emotional appeal to your customers and signify that you truly love them. It builds personal relationships with your customers that last longer.

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5. Cost-Effective

An existing customer is 7 times more affordable than acquiring a new customer. Thus, loyalty programs are financially savvy, and the extra cost of business maintenance can be surpassed by extra business generation.

6. Improve Reputation

Business is all about ethics and reputation. Money can come and go, but you can’t compromise with your reputation. Customer loyalty programs can serve a double capacity: guarantee that current clients feel esteemed, and boost new clients to keep patronizing your business.

How To Boost Customer Loyalty With A Mobile App?

Boost Customer Loyalty

There is no sense in creating a loyalty program that is difficult to join and participate in for the users. There are many better ways for that. Let’s know about them:

1. Reward The Customers Through A Variety Of Ways

There are plenty of ways to get your customers to create value for your business through customer relationships. A loyalty program that gives rewards to the customers has more chances of participation by customers. Here are some examples:

  • Create an account: Simply create an Account to start earning Loyalty Points today. You must log in to participate in the program.
  • Newsletter Perks: Sign up for our e-mail newsletter to receive our best insider deals and product giveaways + 25 Loyalty points.
  • Birthday Bonus: Enter your birthday in My Account so we can send you a mystery bonus for growing another year wiser.
  • Earn as you shop: Earn 1 loyalty point for every $1 spend at the food delivery app. There is no limit to the amount you can earn.
  • Hey, Big Spender: For every $1000 you spend at our food delivery app, you will receive a bonus of 400 loyalty points.
  • 2 Points for 2 cents: Earn 2 loyalty points for every product review you write upon approval.
  • Refer a friend: For each Referral, you and your friend will both earn 80 Loyalty Points after your friend’s first purchase has shipped. This is a true win-win!
  • Share on Social Media Apps (Facebook, Instagram, Twitter, etc.): Each time you share the app on any social media app, you will earn 1 loyalty point. (Earn up to 3 points per day).

Also Read: How To Build A Food Delivery App?

2. Create Desirable As Well Achievable Awards

If you are giving the right rewards to your buyers then it will become hard for them to move to your competitors. Keeping your rewards attractive, useful, and achievable at the same is very important.

You must be clear with the benefits you are offering to make sure your customers see the value instantly and have reasons to come back to your store. Whatever reward you are offering to the customers it should be ideal for them, the one they find more appealing than others.

The first reward is critical to motivating your customers to join your loyalty program. An achievable reward will make the customers join your program instantly.

3. Give Increasing As The Loyalty Program Progresses

The loyalty program doesn’t only depend upon the number of participants but also on how many of them are actively participating. After encouraging the users to join your loyalty program, you need to motivate them to keep them eager to pursue the next reward. Always give those benefits to the customers which match your brand value. Don’t forget to let others know what you are offering your best customers.

4. Use Push Notifications To Remind Your Customers

The loyalty program will engage customers to stay inside your app. But if they left your app then you have to remind them to maximize engagement, and for that, you can use push notifications. Push notifications are powerful too to communicate with your customers by sending real-time messages to the devices. In comparison to e-mails, push notifications to have a far more impressive click-through rate of 17-20%.

5. Monitor And Measure Your App Performance

After implementing the loyalty program on your app, you have to monitor the important metrics for your program and make timely changes to improve it. Here are some metrics that you should definitely check:

  • Monthly active users
  • Average order value
  • Repeat purchase rate
  • Customer lifetime value
  • Point redemption rate

Wrapping Up

In this article, we have gone through all aspects of the loyalty program in the online food delivery app. The loyalty programs will engage your customers to the app and increase your brand reputation and popularity.

Hire the best mobile app development company, which has expertise in developing custom on-demand food delivery apps from scratch. 

Author

CTO at Emizentech and a member of the Forbes technology council, Amit Samsukha, is acknowledged by the Indian tech world as an innovator and community builder. He has a well-established vocation with 12+ years of progressive experience in the technology industry. He directs all product initiatives, worldwide sales and marketing, and business enablement. He has spearheaded the journey in the e-commerce landscape for various businesses in India and the U.S.