The app helps customers make informed decisions and support local businesses. The approach aims to level the playing field for small businesses and combat retail chain saturation while encouraging the local community to support each other. The person speaking is the principal product design and creative director who leads the design team.
The focus of our loyalty brand was to create a program that small businesses and customers would consistently use. This was because we understood that small businesses may not have the financial resources to invest in a loyalty program with low success margins.
According to a recent study by McKinsey, immediate benefits such as discounts or exclusive access can increase loyalty program adoption rates by up to 85.5%, higher than point-based rewards programs. The issue with rewards programs is that the reward is often too far removed from the initial purchase, making it difficult for customers to develop a habit of using the service.
Establishing a habit through frequent usage is crucial for the success of loyalty programs, as demonstrated by the Starbucks Rewards program. The program's app incentivizes users to spend more, with 80% of interview participants stating that they downloaded the app primarily for its mobile booking feature, with the rewards program as an added bonus. Given this, we understood the significance of designing an app with more features than just rewards tracking.
A study by McKinsey revealed that discount-based loyalty programs can increase transaction size by up to 70%. The study also found that paid membership tiers resulted in 62% more purchases compared to free tiers, which supported their own research. To balance customer attraction with profitability, we considered industry retail markup rates and offered a 15% discount for the entry-level free tier and a 20% discount for the paid tier. This provided sufficient incentive for customers to sign up while ensuring the costs remain manageable for small businesses.
During the app design process, we added helpful features to create a positive user experience that encourages frequent app use, promoting habit-forming.
Improvement Opportunity
Each home screen is customize with the companies logo and backsplash along with any area for them to run promos.
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Blu acts as your guide throughout the app, providing suggestions on places to go and new activities to try. As your personal assistant, Blu helps you connect with local businesses.
