How to Create a Loyalty Program App? Rewards App Development Guide

1946 Updated 05.23.2023
Vasyl Polych

Founder & CEO at Northell


Table of contents

As businesses grow, they put much effort into keeping the company afloat by focusing on acquiring new and retaining existing customers. Small businesses, SMBs, and enterprise-sized companies understand the importance of loyal customers. Choosing to create a loyalty app is one of the most effective strategies for solving these two problems in the long run.

However, the success of their efforts depends on the strategy, planning, and business model they choose to create a rewards app. With a solid experience in this field, we help our customers handle all the technical and business pain points from ideation through development to final tech support and create a rewards app optimized for your business. 

So, we’ve prepared a detailed guide to help you understand how to create a loyalty program app, create a profitable business model, and set up the proper development process to win your customer’s loyalty, maximize user retention, and boost sales.

What is a loyalty program app?

The recurring income of your business is based on a pool of customers who buy the products and services you provide. Thus, businesses create a large variety of loyalty and rewards programs that reward and appreciate loyal customers. So, a loyalty program app is a program or system of benefits that your business offers in exchange for continuous purchases made by a customer.

Rewards can be free products, vouchers, exclusive access to premium offers, point systems, discounts, and other perks. Creating a reward system is a powerful incentive for customers to stay loyal to your brand. Customers purchase more as they get benefits for their continuous activities in return. In this way, businesses can engage with customers and gather valuable data to improve user experience and the services and products they sell.

Loyalty apps are widely applicable across many industries. For example, in the travel and tourism industry, airlines offer frequent flyer programs where users can earn miles on flights or for purchasing additional airline services. Hotels provide special discounts or extra resort services for regular guest stays. The retail industry launches digital POS-based loyalty programs. Other industries benefiting from implementing reward-based solutions are banking, healthcare, automotive, beauty, entertainment, and food and beverages. So, no matter what industry you’re in, you can create loyalty apps to drive business growth and long-term success. 

3 Popular Business Scenarios When You Need to Create a Rewards App

There are a lot of popular business scenarios the Northell team encounters within loyalty app development. The initial business requests are plentiful. But there are some when building a loyalty app is a win-win solution that delivers tangible and long-lasting business results for our customers.    

Scenario 1: You want to create a loyalty app from scratch

Running a business doesn’t always imply a successful market story, especially when the company grows. Often there is a need to solve complex industry challenges while maintaining a competitive advantage and retaining customers. Thus, the majority of small and large-scale businesses choose to start figuring out how to make a rewards app.

Reaching out to us, we take all the hassle of loyalty app development off our customers’ shoulders. Our BAs, designers, developers, and QA specialists make the best efforts to create loyalty apps best tailored to the specifics of your industry and business. As an experienced loyalty app development company, we will assist you at any stage, from initial ideation to post-release tech support. So, get in touch if you need to consult with us in more detail.       

Scenario 2: You have an offline business

Launching a loyalty program for offline businesses is another popular scenario that helps companies achieve their goals faster. This is one of the most effective and fastest ways to get online, grow your customer base, and keep their regular customers coming back.

No matter if you’re a small or big brand, you can make your business grow at a high pace with loyalty apps. For example, many big retail stores, such as McDonalds and Walmart, use this type of loyalty scheme. Ideas for creating loyalty programs can be different. You can set benchmarks for your customers to shop for a specific amount in a month or year and give them exciting prizes in return.

Scenario 3: You have an ecommerce platform

Our e-commerce niche customers often contact our team to create loyalty apps. The main reason is: the competition in the crowded e-commerce market is fierce, so it is challenging to retain customers. As a result, businesses look for alternative ways to sustain, maximize engagement and boost app usage.

Our solid background helps us to suggest and develop the best apps with loyalty programs customized to your ecommerce business and end-user needs. If you’re looking for more information on loyalty app development for e-commerce platforms, don’t hesitate to contact us for help!    

Why Does Your Business Need to Create a Loyalty App?

Before jumping into loyalty app development, you should clearly consider why your business needs it. The answer lies on the surface: loyalty programs directly influence your business growth and benefit your business in a variety of ways, not only in the short term but also in the long term. Below, we list some of the killer reasons why you need to create a rewards app. 


Improve customer loyalty

Creating a rewards app improves customer loyalty significantly. By showing gratitude for choosing your brand and offering numerous discounts and bonuses, your customers feel happy and appreciated. When satisfied with your services, customers are more likely to return for your products or services and buy more.

According to the data from Forrester’s Customer Experience Benchmark Survey, US Consumers, 88% of consumers who feel appreciated will stay with your brand, while 83% plan to spend more for your brand.   

Personalize user experience

Knowing your customers will help you personalize the user experience and create personalized offers that best suit their preferences. That is possible to achieve by creating a reward system where you can collect customer data, analyze it and make them feel special. Loyalty programs help create a deeper bond with the customer and strengthen engagement. Personalization and big data help your business create customer-tailored offers that appeal to users and, in turn, boost your revenue streams.    

Engage with customers

Even if you have an offline business and can’t physically interact with your consumers, you can still engage with users through a loyalty program. Customer loyalty programs are a great way to engage customers beyond the point of purchase: you can create surveys, push notifications, ask for feedback, and provide even more value. Creating value, personalizing offers, and creating emotional connections with your brand keep your customers engaged and more likely to purchase from you.       

Gather honest customer feedback

If you decide to host a feedback system in your loyalty app, you can get honest reviews and feedback from your customers. Once analyzed, you can identify technical or other product-related gaps and map out proven ways to improve your customer service and business strategies.   

Boost revenue

Considering how to make a rewards app is not limited to the features and tech stack choices. When done right, a loyalty app will help you set up fastly-growing revenue streams. By encouraging your customers to make repeated purchases, you strengthen the customer’s relationships with the brand, retain them and earn more revenue in return. 

How to Create a Loyalty Program App in 12 Steps?

Northell has hands-on experience with loyalty app development, so we prepared a step-by-step guide to bring your more clarity on the development process from initial ideation to post-release support. Below, you can learn how to create a loyalty program app step by step without risks and with minimal overhead. 

Steps How to Create a Loyalty Program App

Step 1. Gather and analyze requirements

Any project starts with gathering and analyzing all software and business requirements. We usually provide an expert team of business analysts, developers, and designers that work together to collect and analyze your business needs, objectives, competitiveness, and customer expectations.

We set up an initial workshop with our Customer to dive into the business context and discover problems and requests. The obtained insights serve as guidance to start creating a backlog and move to in-depth product discovery.     

Step 2. Conduct product discovery

A deep industry, market, and customer research is required to create a compelling value proposition that will help you stay competitive and bring value to your business and customers.

For example, in our case, our primary goal was to build a rewards app that makes shopping easy with a loyalty program. Thus, the product’s value lies in making online shopping more attractive and easier for end users, allowing them to enjoy and quickly redeem the gifts of a loyalty program.

At this step, we hold consultations with our customers to uncover the product/service from multiple angles and analyze the audience they want to reach.

The typical tasks we do during product discovery:

  • Market research – to collect information about similar types of loyalty applications that exist in the market
  • Competitor research – to analyze the direct competitors’ weak and strong sides to come up with a better solution to solve similar problems 
  • Target audience analysis and definition – to understand better the core functionality the end users need
  • In-depth user interviews and analysis – to draw up a general user persona  
  • User personas creation – to reflect the customer segment our customer is intended to reach
  • Customer journey maps creation
  • Defining value propositions that align with your core business goals  
  • Defining a business model
  • Creating technical documentation for the product/service
  • Choosing the suitable monetization model- to achieve your business goals as quickly as possible
  • Creating the list of basic features to implement
  • Planning project milestones, budget and schedule  

Step 3. Develop product strategy

The next essential task is to develop a clear action plan that will detail how the program will convert your regular customers into loyal members. Whether you’re a startup or a large-scale organization, a successful product strategy is key to the success of a loyalty app in the market. To sustain the success of your loyalty program app, it’s paramount to craft a long-term application strategy that will help you to maximize user engagement, boost app usage and retain customers. 

Your rewards app strategy must be technically feasible, financially acceptable, and beneficial to your organization. To ensure you are on the right track, you need to consult a professional team to create a data-driven strategy that will allow you to build, launch and grow your loyalty app successfully.

Step 4. Define the business model 

Deciding how to make a rewards app should start with early idea validation to avoid project risks. You can use a Lean Canvas business model to validate your idea before launching your project. This model includes specific blocks that can serve as a checklist to help you quickly evaluate your idea from different perspectives. Using this model, you can:

  • Define what problems are faced by your customers 
  • Formulate solutions to help solve your customers’ problems
  • Create a unique value proposition (UVP) for your customers
  • Determine the list of benefits that you will have over competitors
  • Define the target audience or customer sectors for whom your app is intended
  • Choose KPIs to help you track the success of your product (e.g., the average number of purchases, customer satisfaction, etc.) 
  • Understand channels to reach your customers so that they can manage their own loyalty cards
  • Clarify revenue stream

Step 5. Create a software architecture map

We run sets of planning sprints to build a high-level design of the product/service, allowing our software team to sketch out the big picture of the application, understand how the business will interact with the product concept, and start prototyping. To do this, we create an Entity Relationship Diagram (ERD) that visualizes relations between users, objects, and concepts within the ecosystem of the app.  

Step 6. Prototype and test

To understand how your users will interact with the product, we map the user experience via user flows. We create user scenarios illustrating the entire user’s journey through the product. The user flow visualizes the tasks the user performs and possible alternative outputs.

Once the user flows are defined, your development team can sketch and test prototypes. At this point, it’s crucial to gather a test group of users who will help you to find possible flaws, so your team can eliminate them before moving to the core development stage. 

Step 7. Start with MVP

Once you’ve got the interactive prototype in shape, you’re ready to build your loyalty program application.

If you have a fresh idea about developing a rewards app, we recommend starting small with MVP development. This approach is the most optimal, resource-balanced, and risk-free way to bring you from an idea to a successful product launch. 

At Northell, for an MVP, we develop basic app features with a simple UI/UX design, test the app, gather feedback, and move on to implementing advanced functionality if the idea is worthy. The MVP is enough to validate your idea and decide if the project is worth planning further.

However, keep in mind that an MVP of your loyalty app should reflect the aim of your brand. For example, in our case, the app aimed to attract users to exchange gift cards directly through an app. 

Also read: How To Create a Minimum Viable Product (MVP)? [Startup Case Studies]  

Step 8. Create UI/UX design

Before coding, our UI/UX designers come into play to conceptualize your rewards app idea. So, we start visualizing the main app features in the identified user scenarios and plan convenient journeys for all app personas. We create UX wireframes (or screen visualizations) to communicate design decisions to the developers, test on real users, and make critical changes before heading into development.

When creating UI prototypes, we visualize how the app looks and performs. A few options of our design go through testing on users to check if it’s clear and understandable for them.

During the UI design process, our design team also creates all graphic interface components, including the choice of the primary color palette, typography, iconography, logos, and images. 

Whether you have an existing app or building a new one – we can offer our UX Lab services to ensure excellent usability. We use a UX Eye Tracker tool to explore user behavior while interacting with the product and improve overall UX. 

Step 9. Get to loyalty app development

During this stage, we assign (2+ programmers and architects) to start translating the designed screens into workable code. Based on a pre-defined tech stack and documentation, our back-enders implement the application’s server side, APIs, and business logic. At the same time, front-enders convert UI design elements into a functioning user side.

In this process, Northell’s team follows the best development practices, including Agile project management and CI/CD approach for automatic delivery of new builds, testing, and safe deployment. We also prioritize regular code reviews, code quality control, regular communication, and reporting to stay on the same page with all project stakeholders.

Find out more about our service offerings:

Front-end development services 

Back-end development services 

Step 10. Make a pre-launch test on existing customers

Running pre-launch tests is another way to increase the retention rates of your loyalty app. Prior to launch, we recommend inviting users to the beta program so they can try the app and provide honest feedback. This step enables us to test and discover minor issues that can be overlooked earlier. So, we collect the data and implement changes suggested by the users.   

Step 11. Launch your app

Once all the development and testing tasks are over, you can launch your loyalty program app in the production environment. They go to App Store and Google Play if you develop mobile loyalty apps.

Your team must have hands-on experience deploying mobile apps into Apple and Google stores and stick to Apple HI Guidelines and App Store Review Guidelines (in case of deploying IOS apps) and Google Store Guidelines (for publishing Android apps). Otherwise, the procedure may be delayed for an indefinite period of time.  

Step 12. Support and promote your rewards app

Once the app is launched, proactively collect customer feedback during and after the launch. The release of your application is not the endpoint in your loyalty app development journey – you will need to keep an eye on the app’s performance, gather user feedback, review activity, and quickly make updates if needed.

You will also need to regularly assess user engagement and provide incentives to current customers to convert them into loyal customers. Using different analytics tools, you will need to solve occurring issues, upgrade features your users expect from your app, and provide personalized offerings.

Hope the above guide helped you understand how to make a rewards app with limited risks to your project and business. If any questions left, contact us.   

Key Features for Loyalty App Development 

You can significantly improve how customers engage and interact with your products and services by adding many useful features to your loyalty app. So, when you consider how to make a rewards app, prioritize including the right set of features as given below. 

Log in/Sign up

It makes sense to make a convenient log-in/sign-up feature for your users, so your customers can join your app in a few clicks. The app should allow users to sign in via email or social media accounts (Facebook, Google, and Apple). Given that you create loyalty apps, you should also include the opportunity to sign in via an existing loyalty card number.  

Reward systems

There are many options you can use to reward your users. Examples include discounts, reward points, special personalized offers, bonuses, gift cards, etc. Depending on your business model and goals, you can introduce different reward programs that best match your end customers’ needs. Important to note that customers opting for mobile solutions will prefer to pay via credit card, so you can also include e-wallet points.        

Spending categories

If your brand offers a wide range of products or services, we recommend including a spending categories section. In such a way, each time when a user makes a purchase, the expenses fall into a specific category. So users can track efficiently track their spending and gather points in your reward system. 

Maps and geolocation

With maps and geolocation features, you can provide better offers to your customers based on their location. For example, customers can get notified when a store is nearby or distantly look for the nearest location of your store, and so on.   


Every minute needs to be saved in a rushed and busy customer’s life. Pre-ordering option can significantly facilitate your customer’s life. With this feature, they are no longer obliged to stand in a queue and wait their turn.   

Offers/points redemption

Your users should quickly redeem and look up earned points with your app. So, include offer/points redemption before payment or at checkout. Also, make sure your customers can review their total rewards balance and stay updated on earned points via push notifications.

Social sharing

Integrating social media into the rewards apps is a valuable part of an efficient digital marketing campaign. Many brands consider integrating social sharing options in their loyalty apps to offer customers special discounts for completing tasks related to users’ social media accounts. That also leads to a highly engaging user experience. 

Push notifications

Push notifications can be applied in the app to reach customers in a variety of ways: to remind users about new offers, earned points, new bonuses, etc. The more entertaining and intriguing these messages are – the more attention this campaign will gather for your app and loyalty program.    

Analytics and tracking

Analytics and tracking are essential to provide you with regular business insights about the performance and success of your loyalty app. Analytics can help you react immediately to failure metrics and make changes to improve the user experience in your app. This feature is helpful in gathering valuable data for strategic decision-making. 

Mobile payments 

Developing a mobile loyalty program app requires the integration of a payment gateway, so your users can make in-app purchases and earn rewards. We recommend integrating PayPal, Apple Pay, and Android Pay to simplify and secure the payment process.


Gamification entails adding game elements like points, badges, levels, etc., to increase user engagement. Implementing gamification features into your loyalty program app is an excellent way to encourage users to choose your products and services more often. Gamified user experience makes customers’ purchasing journey enjoyable while increasing in-app time.

Wondering how to make a rewards app with a distinctive feature set to engage your customers more? Talk to our dedicated development team

Tech Requirements to Consider for Loyalty App Development

When it comes to loyalty app development – a lot is at stake. To ensure that your product meets the quality standards, provides strong security, and fits your business model, you must consider critical technical requirements that will affect the success and profitability of your final app.

Tech stack

When choosing the tech stack to create a rewards app, some customer research is needed. This analysis will help us to determine whether native, hybrid or cross-platform development is best suited to our customer’s business model, available budget, and future ambitions. 

Moreover, the choice of tech stack greatly affects the app’s scalability, reliability, and flexibility. So this task should be done wisely under the guidance of an experienced technical expert. Depending on the development approach, we can choose the best tech stack tailored to the unique business needs, tech requirements, and capabilities of our customers.

For loyalty app development, we usually prioritize the following tech stack:

a Loyalty Program App tech stack

Software architecture

When considering how to make a rewards app, ensure you have a solid software architecture. The most famous architecture type is multi-tenant.

Multi-tenancy in loyalty application development models is a system with multiple companies or tenants that share a single loyalty platform. For instance, promo codes from tenant A should not be used at customer touchpoint B and vice versa.

In multi-tenant architecture, the same database, computer resources, and application infrastructure can be used by multiple tenants. А мulti-tenant cloud-based architecture allows your platform to scale. That happens due to this architecture:

  • Allows one server to run various applications
  • Enables multiple users to access the same application

That’s why selecting a suitable tenancy model is essential based on your needs and requirements.


There are a lot of security-related issues that may arise during loyalty app development, such as malware infection or privacy invasion. Given the amount of personal and sensitive customer information that is constantly processed through the rewards app system, security is paramount to prevent unauthorized access, data leakage, corruption, and cyber attacks.

At Northell, we adhere to the following best practices:

  • Multi-factor authentication – to protect sensitive corporate information and personal user’s data
  • Transaction security –  to avoid cyber threats with end-to-end encryption 
  • Data encryption – to limit access to sensitive information   

Our Experience in Building a Loyalty Program App

Our development team has recently been working on creating a rewards app that makes shopping easy and fun for shoppers. With this platform, users can make their daily purchases more profitable while the business gets long-term sales boosts.

During the project, we faced a few challenges:

  • Creation of a reliable IT system for a mobile app 
  • Migrating a loyalty program into an existing online app
  • Making a mobile app the main communication channel between the brand and end-user

Features we’ve developed under the loyalty app development:

  • Easy log in/sign up via email 
  • Payment gateways (Google Pay, Apple Pay, PayPal)
  • Reward system with gift vouchers 
  • Checkout page
  • Offers/vouchers/discounts redemption  
  • Review cart 
  • Push notifications
  • Spending categories 

As a result, we’ve managed to release a project on time, on quality and within budget. The mobile loyalty app makes 3-step shopping online more engaging and easier. Users can exchange gift cards for over 150+ of the best-loved brands. By integrating the loyalty program, our Customer achieved higher retention rates and acquired new customers.

If you aim to create a rewards app or add a loyalty program to an existing one, you are welcome to contact our team. With a solid background in this field, we will assist you in prioritizing features, choosing a technology stack, and ensuring compliance with security and tech quality standards. 

How Much Does It Cost to Create a Rewards App?

Many factors can influence the final loyal app development cost. The most important cost factors are:

  • Functionality complexity and scope  
  • The complexity of the UI/UX design 
  • Tech stack 
  • Third-party integrations
  • Development team’s location and size
  • Hiring model

On average, the cost for a full-cycle loyalty program app development may start with $45,000 and get higher depending on the factors mentioned above.

We recommend outsourcing loyalty app development to software outsourcing agencies rather than developing this app in-house or handing over the project to freelancers. By outsourcing application development to reputable agencies, you have better control over the quality of the services provided and guarantee the level of confidentiality and corporate data protection.

Below, you can see a comparison table to help you understand the costs for loyalty app development divided by the outsourcing region and project stage.

a Loyalty Program App cost

How long does it take to create a rewards app?

When planning how to make a rewards app, you should also consider the project schedules and estimate timelines. To do it, you should consider such factors as project size and complexity, functional and design complexity, team structure, and expertise.

On average, creating a loyalty program app can take from 2 to 6+ months.

Below you can also see Northell’s timeline calculations based on project size and stage.

how long does it take to Create a Loyalty Program App

In cooperation with Northell, you will also get a highly committed team to deliver the project according to the planned schedules. Compliance with Agile methodologies, well-established development workflows, and proven experience in this area help us guarantee our customers a quick time to market with uncompromising product quality.

In any case, we can provide you with an accurate timeline for the final product once we know more about your idea and project. Share your project needs with us now!

Loyalty App Development: A Brief Summary

In an increasingly competitive landscape, loyalty programs can differentiate you from your competitors and keep your customers loyal. So, a rewards app is essential to your marketing campaign if you want to retain loyal customers, increase brand awareness and boost sales.

So, by choosing Northell as your loyalty app development partner, you will get:

  1. Profound experience with:
    1. Mobile app development services (both native, cross-platform, and hybrid)
    2. Web development services
  2. Expertise in the design and development of software of various technical complexity, size, and industry focus 
  3. Hands-on experience with loyalty app development 
  4. Highly committed full-time or part-time development team with all required specialists involved (PMs, BAs, UI/UX designers, developers, QA specialists, Tech Leads, etc.)
  5. Mature and well-polished development workflow 
  6. Flexible hiring and pricing models

So, give your project a go and contact us for professional help! 

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