Loyalty: How do we design a program users actually want to use?

Project Description

This case study presents my extensive involvement in transforming a loyalty application for a major retail client. The primary objective was to create an engaging, data-driven platform that not only tracked and analyzed customer shopping habits but also deepened the users’ connection with the brand. My role spanned the entire project lifecycle—from defining the scope and conducting research to ideating, designing, and validating new solutions. Although the client’s name is confidential, the project was positioned within the competitive retail sector, aimed at boosting app engagement and increasing both in-store visits and overall basket value.

Goal

The loyalty program was designed with clear goals:

• Collect user data to better understand buying preferences.
• Strengthen the brand-customer relationship by offering exclusive benefits.
• Drive app engagement and increase the frequency of store visits.
• Enhance the average basket value through targeted rewards.

The initial MVP featured a straightforward mechanic: users registered via email, scanned a QR code during each shopping trip to collect points (with a conversion rate of 1 point = €0.4), and redeemed these points for discounts, free products, or basket-wide discounts. Additionally, the MVP incorporated bonus points that incentivized purchases of specific products or brands. The program was launched in a limited area to assess performance and gather early feedback.

Discovery and Research

My work began with an in-depth discovery phase where I set out to understand both the quantitative metrics and qualitative user experiences. This phase included:

• Scope Definition and Data Analysis:I meticulously defined the project scope, performed quantity data checks, and conducted detailed analyses of usage patterns to benchmark the MVP’s performance.
• Field Studies and Quality Data Gathering:Engaging directly with users through field studies allowed me to capture firsthand insights into their interactions with the app.
• Heuristic Evaluation: I conducted a heuristic evaluation that uncovered several usability issues. For example, users frequently found the loyalty program overly complex and had difficulty understanding how rewards and bonus points were activated.

Through data analysis, field studies, and feedback from Customer Care and app reviews, we identified key usability issues and pain points in the loyalty program. This allowed us to define areas for improvement, focusing on simplifying the user experience and clarifying reward activation

Ideation

During the ideation phase, we focused on simplifying the user experience and addressing the main pain points identified in the research. The goal was to create a more intuitive and engaging loyalty program by making key interactions clearer, reducing confusion, and encouraging user participation. Below are the key ideas we decided to implement:

• Simplified Points Tile:We streamlined the points tile to display only the total points, keeping the interaction consistent but highlighting the most important information. This change allows users to easily track their progress without unnecessary clutter.
• Reordered Widgets:The order of the widgets was adjusted to align with the natural flow of the loyalty process: first, users gather points, then they can use bonus points, and finally, they redeem rewards. This restructuring ensures a more intuitive user journey.
• Reward and Bonus Detail Page:A dedicated page was created to provide detailed information about available rewards and bonus points, giving users clarity on how to earn and use their points effectively.
• Coupon Deactivation Option:To avoid confusion, we introduced the ability to deactivate a coupon if a product isn’t purchased, ensuring users are only rewarded when they complete the necessary actions.
• Integration of Digital Receipts with Points HistoryBy combining digital receipts with points history, users can clearly see where and when their points were collected or spent, reducing confusion and providing a seamless experience.
• Suggested Bonus Points and Rewards on the Loyalty Points Overview Page:We displayed suggested bonus point options and rewards directly on the homepage to encourage engagement and provide users with personalized recommendations right from the start.

Design

Building on the insights gathered during the ideation phase, the design phase focused on translating the identified solutions into intuitive, user-friendly interactions. Our goal was to create a seamless, engaging experience that would not only address the pain points but also enhance user retention and satisfaction.

Post MVP

Thanks to continuous research, data analysis, and tracking, along with regular feedback from Customer Care, who provided ongoing insights from users, we were able to refine and improve the program. Additionally, by conducting Design Sprints, Option Days with managers, directors, and other stakeholders, we gathered critical input that allowed us to develop two new concepts for expanding the loyalty program: Challenges and Gamification.

Challenges

To address the issue of users forgetting to activate bonus points and to make the loyalty program more engaging, we introduced Challenges as a key feature. These challenges aim to create exclusive, rewarding experiences without requiring users to take extra actions, such as activating specific rewards. Instead, users are automatically enrolled, and their progress is tracked directly within the app. This new approach makes the loyalty program more immersive and ensures that users remain engaged throughout the month.

For the MVP, we introduced a single challenge, with each challenge designed to be more extensive, typically requiring a few shopping trips. These challenges are refreshed monthly, ensuring that users always have new opportunities to participate and earn rewards.

The types of challenges include:

Users can earn a variety of rewards, including free products, bonus points, or discounts, depending on the challenge. This offers users more opportunities to maximize their loyalty rewards without additional effort.

Looking ahead, we plan to introduce multiple challenges per month, with a more extensive gamification layer. This could include features like collecting badges, leaderboards, and additional rewards for the most loyal or active users. We’re also exploring behavioral challenges such as encouraging users to open the app a certain number of times or share the app with friends. This will increase engagement and foster a deeper connection with the brand, all without significant additional costs or complexity.

Gamification

To further enhance user engagement and create a more dynamic experience, we integrated Gamification into the loyalty program. This new feature allows users to interact with the app in a fun and engaging way, completing simple tasks on a daily or specific basis to earn exclusive, personalized rewards, additional points, or even cashback — all time-limited to encourage immediate action and drive visits to the store.

The gamification elements are designed to influence user behavior by increasing both app engagement and loyalty program participation, ultimately driving more traffic to physical stores and contributing to higher overall sales. The goal is to create a seamless and exciting experience that keeps users coming back.

Key aspects of the Gamification strategy include:

• Simple, daily interactionsthat are easy to perform but yield exciting rewards, keeping users engaged consistently.
• Personalized rewardstailored to the user’s activity, reinforcing a sense of achievement and progress.
• Seasonal and event-based gamification,like summer offers or a Christmas advent calendar, creating timely and relevant challenges.
• Store-specific game timingdesigned to drive foot traffic, especially during slower store days, ensuring that engagement aligns with business goals.a
• Behavioral incentives such as rewarding loyal users with additional opportunities to earn points or offering limited-time rewards to encourage further purchases.

In the future, this gamification system will be expanded to integrate with other channels, including the website, newsletters, and even paper leaflets, creating a unified, gamified shopping experience across various touchpoints. This flexibility will also allow for local adaptations, tailoring the strategy to meet the unique needs of different regions or countries. Concepts has been developed by conducting a few workshop with designers and stakeholders.

Summary

The loyalty program was redesigned to simplify user experience, improve retention, and boost store visits. We implemented solutions like a simplified points system, intuitive UI adjustments, and introduced Challenges and Gamification to drive engagement and reward users. The program was successfully launched with positive customer feedback, leading to significant increases in app usage, user retention, and new registrations. The data gathered holds strong potential for future growth, benefiting marketing, sales, and procurement. Seamless integration across app, web, and newsletters enhances user experience and saves them money.