With ongoing labor shortages and inflation, investing in a mobile app might be the furthest thing from your mind. But the market conditions are actually prime to reap the benefits from this customer engagement technique.
Offers, coupons, discounts, and deals – is discounting ever really worth it?
Let’s talk about a fun example. In the world of mathematics pi represents the ratio of a circle’s circumference to its diameter – (which is approximately 3.14). Its significance is so important that every March 14th mathematics enthusiasts from all over the globe commemorate “Pi Day”. But, for the vast majority of consumers both Pi and the March 14th mean something entirely different – seriously good pizza deals to be exact!
Fast food outlets, in particular pizza brands have artfully embraced the popularity of “Pi Day”. The day is marked by witty advertising campaigns and an abundance of deals on circular food. From 7Eleven to Bojangles, Papa Johns, Pieology, Macro’s pizza and whole host of others run promotions and deals centered around 3.14 – whether its $3.14 or 31.4% off your order, a minimum purchase order and receive a discount, or buy one pizza and get a second for $3.14 etc.
Blaze Pizza is no stranger to Pi day. They served up, as always, a ridiculously low discounted $3.14 build-your-own 11-inch pizza – no additional purchases were necessary. The only catch? The offer had to be unlocked within their app (for rewards members only) in order to get the deal. You may ask yourself, why would they sell pizza for $3.14? It doesn’t take an account to know that selling at cost or below equates to absolutely no profit – and the cost of developing an App in itself requires investment. So, was it all worth it?
As 2023 was Blaze’s ninth consecutive year running its $3.14 pizza Pie day promotion – it pretty much confirms, it was most definitely worth it.
Mobile App Investment: Short term pain for long term gain
If you are a small business owner, you may have never thought about developing a mobile app – and even if you have, you might be apprehensive about the cost and whether it will justify your investment or not. However, the benefits of a mobile app are far reaching and will outweigh the cost in the long run – Blaze Pizza is just one example.
Their Pi Day promotion, which was only accessible via its app, helped boost March downloads of their app by 767 percent over February. In numbers, that equaled over 500,000 new loyalty members – solely from its Pi Day Promo. But how does this relate to my business, to small or independent outlets you might ask? Why would you invest in an app and in addition, offer discounted promotions via this channel?
- Customer retention: It has been proven that mobile app users are more loyal to the brand. And regardless, of how big or small your business might be, we all know that loyalty is self-reinforcing and can increase revenue and profits faster. The higher the retention, the higher the app sessions, and the higher the monetization. Studies show that improving customer retention by just 5% can result in a 25% to 95% profit increase.
In addition, offering discounts can be a powerful weapon in your conversion arsenal to drive customer loyalty. Not only do they encourage current customers to return and spend money but they attract new customers to try your product. - Growth opportunities: Believe it or not, but mobile has passed drive-thru as the channel where customers are likely to spend the most, per Bluedot. Mobile app users also yield the highest lifetime value and larger AOVs – more specifically, customers who order digitally spend on average 12% more than those that don’t.
In addition, unlike desktop or other offline channels, mobile apps can act as windows into your customers lives and allow you to track key activity and information about them which can later be used to further personalize your customer experience and thus maximizing your sales revenue potential. - Increase brand visibility: A mobile app is a representation of your brand. You can upload your product/service catalogues, or send alerts about new features, contests, promotional offers, exclusive deals, etc., to your customers. As the user experience and engagement increases, the customers feel more connected to your brand. This creates a favorable and credible image for your business over a period of time. As Vincent Szwajkowski, Blaze Pizza’s brand and growth leader said, “The app is ultimately used as a way to get ongoing engagement with our guests.”
- Consumers prefer it: Customer shopping habits and preferences have changed. Thanks in part of Covid, mobile app usage has soared. Retailers continually find themselves serving higher volumes of customers via mobile. Not only does research show that more than 70% of shoppers are more likely to engage with a brand and participate in a loyalty program if they can easily access from their phones but 60% of customers would prefer to use a local chain app to place their order.
With third-party delivery apps severely eating away at QSR profits, charging commission rates as high as 20 to 30 percent – apps make the perfect channel for both your business and your customers.
Mobile increasingly important in the consumer world
There will come a time when you will be faced with the decision of whether to offer discounts, when to offer discounts, and how much the discounts should be worth. Similarly, there are a hundred and one ways you can use sales, offers, discounts, and deals to drive customer loyalty, acquisition, and conversions.
Mobile is increasingly important in the consumer world – and mobile apps are a powerful marketing tool whether you’re a chain or a small local business. Yes, they require initial investment but in the long run the revenue you get from the download and engagement with your customers will outweigh the costs – which will prove invaluable in the years ahead.