Newsroom
Loyalty goes mobile
Sales of mobile phones are seeing a year-on-year growth of around 17%. When it comes to smartphones, however, it's clear where the future lies. Smartphone sales are up by almost 49% in Q1 2010 on the same period in 2009[1] - around 54 million units. This is a rate of growth that is unlikely to slow over the next few years and is a clear indication that 2010 will be seen as the year in which mobile marketing began to fulfil its potential. This is underlined by the following key elements:
Consumers, primed by interacting with brands on social media sites like Facebook and Twitter, and with online retail giants like Amazon, expect to receive relevant product information, offers, and personalized recommendations.
- Brands have learned to engage with consumers without using interruption or appearing to spam.
- Mobile devices themselves - and smartphones in particular - are now capable of reflecting the creativity of loyalty marketers and providing consumers with the brand engagement they seek.
This time it's personal
Virgin Atlantic's Fergus Boyd has an uncomplicated view of mobile: "mobile is primarily about service". The challenge for marketers, therefore, is to convince consumers to allow them to provide a service on their mobile device - that most personal of personal devices.
Target consumers are likely to be smartphone users with experience of instant messaging, tools like Twitter, and social networking sites such as Facebook. This means these consumers expect an immediate, new, and more valuable interaction with the brands they encounter. They will expect interaction to be personal - to appear to be aimed at them directly.
Truly personal service demands opt-in. Consumers are increasingly sophisticated when it comes to rejecting messages that are neither timely nor relevant. The ideal solution, therefore, is the mobile app. This puts control of the conversation in the hands of the consumer and challenges the marketer to design apps that the consumer wants to use at the appropriate time.
I want it now - whatever it is
Consumers increasingly expect immediacy, relevance, and convenience in their marketing messages. They also expect brands to earn their trust as a precursor to earning their loyalty. Rewards are often seen as a bonus and may not be the primary driver. The one-to-many relationships of traditional marketing and advertising are simply no longer sustainable in the age of mobile, when control of who receives what information and when is in the hands of the consumer.
Nectar are currently preparing a scheme that demonstrates immediacy: using location-based services to provide discount codes directly to consumer phones while they shop for inside partner retailers.
Relevance is also demonstrated by the creation of a suite of loyalty apps for Hilton Hotels, which gives customers immediate access to booking information and lets them order room service, check in and check out, and view the total of their loyalty points.
For convenience, how about Lufthansa, American Airlines, and Swiss? These airlines now offer mobile boarding passes for flights from Heathrow. A barcode is sent to the passenger's phone, which is scanned at security and at the gate. Passengers can even check in baggage at self-service counters using their barcode.
Another airline - Virgin Atlantic - attempts to engage passengers at all points of their journey. Apps let passengers check flight times, learn how to fly without fear, or how to overcome jet lag. Opt in is further guaranteed because consumers must purchase the latter two apps.
In China, Haagen Dazs partners with China Mobile to combine immediacy and convenience in a tempting offer: mobile redemption of vouchers at ice-cream parlours.
Mobile is global: the campaign is not
The aims of marketers may be consistent across geographical regions but technological, cultural, and legal differences make consideration of local conditions essential.
For instance, the US and UK markets would seem to offer a homogenous group of consumers speaking a common language. However, penetration of the US phone market by smartphones is less than 25%[2] and US consumers are far less likely to exploit the advanced features of their phones than their UK counterparts[3].
In Asia, mobile marketing is dominated by SMS. Here, too, the slow uptake of smartphones, coupled with relaxed regulatory control, means that push marketing predominates. The same is true of Dubai. Dubai's near neighbour Saudi Arabia, on the other hand, has a more conservative culture that regards push marketing as intrusive. Inherently conservative regions are also more resistant to the use of location-based apps.
Apps for the iPhone are currently the route of choice for most marketers but there is a danger that, in ignoring the app markets associated with Android phones, the BlackBerry, and Nokia, consumers will identify apps with the platform or the carrier more than the brand itself.
One device to rule them all - the cardless society
Smartphone users expect their phones to perform an increasing range of tasks. It is only natural that the idea of individual plastic loyalty cards, for instance, will come to be seen by this audience as a technological throwback. Smartphone users will expect a card app that tells them at a glance how many loyalty points they have and what offers and discounts are available in the nearest retail outlet. They will also expect to be able to redeem those points directly from their mobile device.
It is clear that technology will continue to evolve and that this will present both challenges and opportunities. Universal redemption and payment schemes may require devices to incorporate technology such as ViVOtech's NFC (near field communication) as standard. Equally, thought may have to be given to how status can be represented in cultures where the possession of a gold card is part of the reward itself.
Whatever the technological advances, loyalty marketers need to remain open to adapt their campaigns to best exploit the huge potential benefits available from mobile. Mobile is here for the long haul and opportunities will be grasped and challenges embraced by the brands best prepared to meet them.