How To Keep Your Most Loyal Customers? There’s An App For That

Many companies are mistakenly investing a lot of money to get sporadic customers download apps that, in the end, will not get them to increase their purchases or brand engagement, said Pedro Reiss, partner and co-CEO of F.biz, a WPP agency in Brazil.

A mobile app might not be the best tool to create customer loyalty, but it works very well to strengthen existing relationships. So said Pedro Reiss, partner and co-CEO of F.biz, a WPP agency in Brazil. In fact, he added, the most successful apps are those developed with a focus on already-loyal customers.

His argument is sound: “People who buy books only once a year are unlikely to have a bookstore app on their phone,” Reiss said. “And even if they do, the chance of increasing how often they buy solely for that reason is very, very small.”

On the other hand, he said, someone who finishes a new book every week is probably more interested in downloading such an app and making purchases via mobile if the app, which knows that person’s history and preferences, makes relevant suggestions. “In other words, apps are sensational for strengthening relationships with loyal customers but are unlikely to turn an occasional customer into a frequent customer,” Reiss said.

It makes sense. After all, mobile users, in spite of spending more time with their smartphones, seem pretty loyal to their favorite apps. A Nielsen study, for example, showed that the time U.S. users spend on mobile apps increased by 63% in two years, from 23 to 37 hours. The number of apps they use monthly, however, remained at an average of 26.7 during the same period.

For Reiss, the point is that many companies are mistakenly investing a lot of money to get sporadic customers download apps that, in the end, will not get them to increase their purchases or brand engagement. “Companies set goals for themselves about apps and end up making mistakes trying to meet them,” he said.

A common mistake, for example, is offering discounts for using the app. “That’s building loyalty through price, not through convenience,” Reiss warned, not to mention that it is very common for people to download more apps than they intend to actually use. Data from Localytics show that 25% of users only open a new app once–and then never again. In addition, 60% of users who spend seven days without opening an app never return to it.

“They download it because it’s convenient and then remove it because they need space or simply because they never use the app again,” he explained, underscoring that the vast majority of Brazilian users have limited phone space.

With loyal customers, it’s another story, Reiss said. “The brand has all of that consumer’s information and can use the app to suggest products, services, and content of interest,” he said. A customer who buys all the Harry Potter books can receive a push notification when something new is available for prepurchase. In addition to buying more through the app, he might visit the competition less, Reiss pointed out.

For this to work, however, app notifications need to be integrated with brand relationship intelligence, he said. It might seem obvious, but even companies that leverage sophisticated personalization can sometimes still slip up with mobile alerts. “I get a lot of notifications that have nothing to do with me,” Reiss said. “What do I do? I turn off the service, of course, and the brand loses the chance to engage me.”

And the loss may be greater than you think. More data from Localytics indicate that users who activate push notifications return to the app 88% more often than those who do not have this option enabled.

Another warning, per Reiss: Apps are software and thus require constant updates. “One needs to consider that maintenance is much more complicated for apps than for mobile sites, because they need to continue operating every time Google and Apple update their operating systems,” he said. “If you do something wrong on your site, you can quickly correct it and it’ll be fine. Now, if there’s an error in your app, the fix depends on the user downloading the update. I wonder whether companies really understand this.”