Loyalty programs tend to increase mobile visit frequency and spend: report

While retailers have long known that loyal consumers are better than new consumers, new research from Cardfree shows that mobile consumers tend to increase their frequency of visits to a retail page by two times, making them even more valuable.

The research confirms that the ease and convenience afforded by mobile improves user frequency. Brands that chase after mobile consumers are likely to see the benefits of their increased visit frequency in the future.

“Historically, we’ve seen that mobile consumers have a higher lifetime value than other consumers so the results of our platform research aren’t a surprise,” commented Jon Squire, CEO and founder of CARDFREE. “What is a surprise is the level of increased frequency, which is very significant.

Mobile customers
Retailers have long known that consumers who return and purchase more than once are far more valuable than new consumers who might not ever return.

That is why the common knowledge in the industry has been to always be coming up with ways to get customers to come back to a store or continue to use a service they like, rather than pouring all resources into constantly acquiring new but not necessarily loyal customers.

This bit of common wisdom just got a big boost when it comes to consumers across channels thanks to research from Cardfree, which looked at the comparable frequency of returning customers across channels.

What the research found was that mobile consumers – i.e. those who shop through a mobile channel – are far more likely to return to the same retailer than other channels.

Mobile consumers increase their visit frequency twice over compared to non-mobile users.

Cardfree found that mobile users tended to decrease the time between visits until they were visiting twice as frequently as when they first become customers before evening out at that level.

This means that a user who started out visiting twice a month would increase their frequency until visiting weekly.

Visit frequency
With the research showing how valuable mobile customers are, it is more important than ever that businesses begin investing in mobile if they have not already.

While most retailers might understand on some level that at least some mobile presence is a requirement these days, Cardfree’s research shows how it is more than just a good idea, it can have massive impacts on sales and revenue to invest heavily in mobile and get customers coming back more often.

Cardfree’s research is consistent with other data points in the industry such as NPD’s report that digital food ordering accounts for almost two billion transactions per year (see story).

Small businesses are beginning to catch on, with 67 percent of them planning on introducing a mobile app in the near future (see story).

“In addition to finding that mobile is a driver of frequency, we’ve also found that adding a loyalty program tends to increase both frequency and spend,” Mr. Squire said. “Merchants that use our full platform services including order-ahead, payments, offers and loyalty tend to see the most shift in behavior.”