Following the successful launch of a mobile loyalty program, frozen yogurt chain Yogen Fruz has released an application that offers mobile payment options and digital rewards.

The prior loyalty program at Yogen Fruz involved the antiquated punch card until July 2012, when the chain launched its first installment of a mobile loyalty card. The mobile points system opened the door to better understanding customers, improved targeting and the development of the new mobile payment option, per the company.

“The biggest advantage to a mobile wallet is convenience,” said Ritesh Bhavnani, founder and chairman at Snipp Interactive Inc., Washington. “You don’t have to carry around cash or a credit card or wait for change.

”For a mobile wallet to be successful, you have to provide additional convenience, such as being able to purchase without needing to wait at checkout or integrating it with a rewards program to get points for every purchase,” he said. “That’s what the best used mobile wallets are doing.”

Mr. Bhavnani is not affiliated with Yogen Fruz. He commented based on his expertise on the subject.

Increasing customer loyalty
The Yogen Fruz app operates off the same mobile loyalty card mentality as Starbucks, letting customers earn points, redeem rewards, take part in exclusive contests, send gifts to friends and pay for purchases.

Every penny spent earns customers one point. For every 5,000 points accumulated, there is a chance to redeem a free treat worth up to $5. Newcomers get 500 points just for signing up, and loyalists are rewarded with 5,000 points on their birthday.

“The base program is a ten-percent-back program – which is really fantastic in and unto itself – but add in a Free Treat (up to $5 off) on a customer’s birthday, along with contests and bonus opportunities, and this is really an outstanding offering,” said Adam Zarudny, marketing and creative director of Yogen Fruz.

In addition to the mobile loyalty program, the frozen yogurt company hopes location-based notifications to users within a specific radius will drive repeat sales, through use of a platform called Appetite®.

Appetite®  is a mobile payment, rewards and engagement platform, which empowers franchises, retail chains, and independent merchants with in-store mobile wallet capabilities (www.appetiteapp.com)

Appetite® develops customer profiles through gathering location, purchase history and visit-frequency information used to extend the reach of targeted offers, loyalty and revenue.

“Mobile wallets work best with low-value, high-volume purchases, which are why it works well with QSRs in the food and beverage industry,” Mr. Bhavnani said.

“The key selling points for the wallet are convenience and value, hence integrating with a rewards program and streamlining the process are key,” he said. “Doing those currently inherently engenders customer loyalty.”

Conversion to digital payment
Starbucks has seen similar success with its mobile payment app, with some estimates that the coffee giant generated $1 billion in revenue from mobile transactions in stores during 2013, largely because of customer loyalty.

Yogen Fruz taps mobile

Starbucks’ triumph in mobile payments has been attributed to customers switching to mobile because of easy access and storage of digital rewards.

Pioneering the change of user behavior, Starbucks has discovered how to improve customer experience. The app allows users to pay with their smartphone, but also enables them to obtain instant discounts and connect directly to Starbucks’ rewards program, in which customers refill their loyalty accounts with a few swipes.

“Mobile payments will continue to proliferate,” Mr. Bhavnani said. “We are definitely in the early stages of adoption, and I expect to see more options and a lot more consolidation before it becomes ubiquitous.”

Final Take
Michelle is editorial assistant on Mobile Commerce Daily, New York