Defining Customer Loyalty Apps
From the most simple to complex, all customer loyalty apps work on the same main principles:
- Give customers points for purchasing goods or services from your business.
- Said points, once sufficiently accumulated, can be exchanged for certain rewards.
- Customers are incentivized to keep purchasing from you instead of a competitor.
Essentially, through a customer loyalty app, a business ‘buys’ the loyalty of its patrons.
Some tactics work across industries, while others only apply to specific niches or businesses.
If you belong to the latter, developing a custom app like the example above can be worthwhile, and to help, below are key considerations when developing a custom loyalty app for a business.
Custom Loyalty App Development Cost Overview
It will always be case specific, but here are some key estimates.
We’ve kept our figures conservative and erred on the higher side of things.
- Total Development: USD115,000
- MVP Development: USD35,000
- Total Development Time: 12 months
- Time to MVP: 16 weeks
- Maintenance: USD3,000 / month (not including 3rd party tools and ongoing development)
This assumes three very important things:
- A single cross-platform codebase for web and mobile devices
- A single UI / dashboard prioritising either web OR mobile
- No scope creep or significant changes to requirements
We’ll discuss these in more detail after laying out the main development steps.
Customer Loyalty App Features
For every feature listed below, there’s space to specify custom needs for your business.
We encourage you to really think about whether your version of a loyalty app needs to be different or if the standard offering is good enough.
The more custom details are needed, the more likely off-the-shelf options won’t be a perfect fit and the stronger the argument for a custom app development.
Core Features
These are features even the most basic loyalty app has and should be part of your MVP.
| Feature | Ready-Made Solutions | Custom Needs (editable) |
|---|---|---|
| Registration & login | Simple sign-up via email or phone; onboarding process | |
| Points & rewards system | Earn / redeem points per purchase; trackable reward balance | |
| Digital membership / wallet integration | Barcode / QR scanning at checkout | |
| Push notifications | Real-time engagement with reminders, promotions, and updates | |
| Tiered loyalty levels | Silver / Gold / Platinum-style programs with clear benefits per tier | |
| Transaction history & activity tracking | Full transparency so users can see how points are earned / spent |
Enhanced Features
These features are what makes your app a custom solution with unique selling points.
If you want your MVP to differentiate itself from the very first version, we should incorporate at least one of these features, and ideally several.
They can be broadly categorized into:
- Customer-centric
- Business-centric
Of course, more for the sake of more is almost never worth it, so these features should be chosen intentionally based on known industry, business, or customer needs.
Customer-Centric Features
| Feature | Ready-Made Solutions | Custom Needs (editable) |
|---|---|---|
| Gamification | Challenges, badges, streaks, leaderboards | |
| Referral & social sharing | Invite friends for rewards; social media integration | |
| Surprise & delight rewards | Birthday perks, anniversary bonuses, or random gifts | |
| In-app communication | Announcements, updates, customer support chat | |
| Location-based rewards (geo-fencing) | Exclusive offers when customers are near a store | |
| Partnership ecosystem | Earn/redeem points across multiple brands | |
| Sustainability rewards | Eco-friendly perks (plant a tree, donate points, etc.) | |
| Reward catalog / redemption options | Flexible redemption (products, services, vouchers, cashback) to attract more users | |
| Personalized offers & discounts | Tailored based on past purchases, preferences, or location | |
| Instant gratification | Spin-to-win, scratch cards, surprise coupons |
Business-Centric Features
| Feature | Ready-Made Solutions | Custom Needs (editable) |
|---|---|---|
| Analytics & reporting dashboard | Customer segmentation, purchase frequency, lifetime value; measure ROI of loyalty campaigns | |
| Integrations with POS/e-commerce systems | Real-time sync between online and offline purchases | |
| Marketing automation | Scheduled push notifications, personalized email campaigns | |
| Feedback & surveys | Customers can share opinions / suggestions directly in app |
Customer Loyalty App Integrations
These are third party software connected to a customer loyalty app so it can offer key features.
Below we share common integrations, again separated by customer or business-facing, and again with an editable column so you can state your chosen providers (and see which ones you need to hunt down!)
Customer-facing integrations
| Type | Purpose | Your Provider (editable) |
|---|---|---|
| POS & e-commerce | Earn/redeem points seamlessly in-store and online | It’s ok to say not sure 🙂 |
| Payment gateways | Link rewards to actual purchases, including cashless transactions | |
| Social media | Share milestones, get referral bonuses, social login | |
| Mobile wallets | Store digital loyalty cards for easy access | |
| Barcode / QR scanners | Quick in-store check-ins, point redemption | |
| Notifications | Get updates on rewards, promotions, and reminders | |
| Delivery & logistics | Earn/redeem points from delivery orders |
Business-facing integrations
| Integration Type | Purpose for Businesses | Your Provider (editable) |
|---|---|---|
| CRM | Manage customer data, segment users, personalize offers | |
| Marketing tools | Automate reward reminders, promos, and drip campaigns | |
| Analytics | Track program performance, customer lifetime value, ROI | |
| Inventory systems | Ensure reward availability and prevent overselling | |
| Customer support | Handle reward/account issues quickly | |
| Single Sign-On (SSO) | Simplify account sign-ups and logins |
6 Stages of Customer Loyalty App Development
Building custom software means following the typical stages of app development, of which there are six (seven if you include the work done before approaching a developer).
Stage 0: Prepare Your Loyalty App Brief
A brief is a preliminary document that gives developers an idea of your project, namely :
- Problem
- Solution
- High-level Requirements
- Budget Range
- Timeline
- Similar Applications
It gives us context and helps us form clarifying questions when we move to the next stage.
Download this FREE editable template now to craft your perfect App Brief! Let us know where should we send it through the form below.
Secretly, developers also use it to filter out clients who aren’t serious!
Stage 1: Requirements Gathering
During this phase, we work with you to define the requirements for your customer loyalty app.
We’ll take you through our zero to launch, where we align on:
- Target Audience
- Problem Statements
- Value Proposition
- Primary Platform
Based on our discussions, we come up with a timeline for all features.
And most importantly, we shortlist essential ones to roll out an MVP within 12 – 16 weeks.
Stage 2: UI/UX Design
If your custom customer loyalty app compromises on either, employee adoption will always be a challenge.
You’ll constantly hear “Why can’t it be more like [insert popular loyalty app here]?” complaints.
Our UI/UX designer will ensure your app not only looks great (UI) but also delivers a seamless, enjoyable user experience (UX).
Stage 3: Back and Frontend Development
If you’re familiar with Agile methodology, we work in two-week Sprints.
During a Sprint, our backend developers build the back-end architecture while the frontend guys turn the designs by the UI/UX team into functional app interfaces.
At the end, we get your approval on progress and align on action items for the next Sprint.
If that sounds like gibberish, here’s a guide to Agile methodology for non-techs!
Stage 4: QA & Testing
The main purpose of this phase is for us to improve the stability of the app while minimising bugs that impact the user experience.
There’s no such thing as bug-free software, but that is no reason to compromise the user experience.
Stage 5: Launching Your MVP
We deploy your Minimum Viable Product (MVP) to a live environment so employees can begin using the loyalty app.
As they use it, we’ll be on hand to:
- fix high-priority issues that were initially missed
- monitor how core features perform
- identify unexpected user behaviour
- see where improvements are needed
Stage 6: Iterate & Maintain
Based on how your team responds to the early version of your customer loyalty app, we reevaluate the product roadmap together.
More often than not, many features that were initially thought critical turn out to be unnecessary.
Meanwhile, use cases that nobody thought of suddenly reveal themselves.
Ultimately, we align on the development of the rest of the app to truly serve your business needs, alongside regular updates, bug fixes, and general maintenance to ensure the parts of the app that have been built remain stable.
MVP Timeline
| WEEK | DESIGN | DEVELOPMENT |
| 0 | Kickoff meeting to align on essential features for MVP in 16 weeks | |
| 1 |
Initial UI/UX + User Feedback:
|
Plan Front and Backend:
|
| 2 |
Complete UI/UX:
|
Development Sprint Planning (weekly cycles):
(Start of Sprint)
(End of Sprint)
Note: Receive designs + code review in Week 5 |
| 3 | ||
| 4 | ||
| 5 | Handoff designs to developers | |
| 6 | ||
| 7 | ||
| 8 | ||
| 9 | ||
| 10 |
Development Sprint Planning + QA Testing (weekly cycles):
| |
| 11 | ||
| 12 | Launch + support / bug fixing | |
| 13 | App + documentation ready for handover to you or your team | |
Estimate ROI on Custom Development
ROI is not an exact science!
Until we are deep into development, it’s impossible to determine final costs.
Likewise, until you launch your app, there’s no way to calculate how much it generates or saves.
But just cause we can’t know with 100% certainty doesn’t mean we settle for nothing.
So try using this basic formula:
ROI (%) = Estimated Revenue − Estimated Costs Estimated Costs × 100
This of course means you need to roughly know your costs and revenue, and if you need help there, check out our full guide to estimating custom software ROI.
The Biggest Hurdles to Custom App Development
Our estimates assume no major scope creep, which is extremely common.
Scope creep is by the main reason software projects go over budget, and the root causes are hard pills for businesses to swallow.
Poor Internal Oversight
It’s common for teams to each track their own KPIs with no idea what other teams are doing.
Without someone to unite the departments and see the big picture, the business ends up with an incomplete (or wrong) understanding of what it needs from a loyalty app.
The bigger the organization, the more common this problem tends to be.
PSA: Consider Ready-Made Apps!
Existing customer loyalty program providers like Smile, Open Loyalty, and Stemp Me have been around for years, refining their solutions with feedback from thousands of businesses.
As many off-the-shelf solutions already offer some degree of customization, the chances that your business has genuinely unique needs is slim.
We’re not saying you’re wrong, just be sure the “need” for custom software isn’t a symptom of:
- Improper loyalty app selection or implementation
- Workflow misalignment
- Poor employee training
- All the above!
Custom loyalty app development only makes sense when:
- Your brand has grown to have its own identity among customers
- Your processes and integrations have become more complex
- You’re in a highly specific niche with unique requirements
- You’ve outgrown your loyalty app and their representatives have confirmed as much
In every other case, your time and money are better spent elsewhere.
And don’t shy away from trying different options.
Remember: USD100,000 for development!
If you’re unsure, feel free to reach out for an honest assessment.
If you have a custom software project in mind and need help estimating ROI, get in touch with us and we’d be happy to help! Also, consider joining our mailing list for a one-stop resource on everything from SaaS validation to execution and promotion. Get a nifty list of questions to ask app developers when you sign up!
Download this template now so you know exactly what to ask App Development Agencies! Let us know where should we send it through the form below.
