Mobile – the loyalty game changer

15 September 2011

Mobile phones have become a ‘game changer’ for loyalty marketers  , with consumers increasingly using smartphones to gather information, compare prices, place orders, redeem offers, check-in, check-out, and check their points balances. Gartner estimates that 468 million smartphones are already in use worldwide, and Juniper Research predicts that mobile payments will grow by 40% by 2015 to some US$2.5 billion globally.

The mobile channel not only saves on costs such as plastic cards and mailings but it also makes it easy to gain a competitive advantage that can be quickly adapted when competitors catch up. Most consumers carry their mobile most of the time, making it the perfect channel for customer loyalty initiatives, offers and rewards. Targeted, personalised offers and incentives can be sent to and stored on the customer’s device, ready to be redeemed with a quick scan of the screen.

So whether your target audience is best served by a mobile site, an app or SMS – or a mixture of those options – depends on your goals and strategy. Key issues that affect your strategy decisions should include:

What are the goals of your expansion into the mobile world?
There’s a temptation to jump into the mobile channel just because your competitors are doing it, but without clear objectives. Benefits to the brand usually include a mix of cost savings (e.g. offering customer service and support), ‘top of mind’ brand presence, the ‘cool factor’, 24/7 availability, social sharing to drive advocacy, and to accurately target offers and rewards.

Are customers ready for the mobile channel?
Consumer acceptance of the mobile channel is growing fast – particularly for smartphone users.  During 2010 there were over 1.5 billion mobile phones sold globally, and 20% of these were smartphones (300 million).  Moreover the number of smartphone sales increased by 72% compared with 2009, and this trend is set to continue – with total sales expected to be 500 million by 20121.

A recent study2 found that more than two thirds of customers in the US plan to make purchases via mobile sites or apps in the future, primarily due to benefits such as convenience, ease of access to useful information, value-added information and the fact that businesses are now starting to provide more effective ways to interact with them whilst on the move – for example via mobile web and apps.

Are brands ready for the mobile marketing mix?
There are certainly some brands that are meeting and exceeding consumers’ expectations but, on the whole, as highlighted by a recent study, many brands aren’t addressing consumers’ current demands. Whilst consumers plan to make purchases via mobile sites or apps, only 32% of retailers currently enable them to do so. Furthermore many consumers would like to add items to their carts via mobile phones and complete the transaction later using a computer or tablet but only 23% of retailers offer this ability.

Perhaps not surprisingly, the travel industry is ready and leading the charge. For example, the Intercontinental Hotel Group (IHG) mobile strategy includes iPhone booking apps for each of its seven brands, allowing guests to find and book rooms, check rates, and view or cancel reservations. The iPhone apps include searching & comparing of IHG brands, arrival planning, maps & directions, contact details, ‘touch-to-call’, travel profiles including secure credit card storage, marketing communications, and various Priority Club Rewards features (including sign-up).

Which mobile platforms should you support?
There are myriad platforms already, including the iPhone, Blackberry, Android, Symbian, Windows Phone, and Tablet computers, among others. While the market share winners may currently be Android and iPhone, you can’t afford to ignore the still-significant proportion of consumers who have other devices. The most popular approach for marketers offering apps is to start by supporting the main platforms, then phase in other platforms when all the glitches are ironed out.

What’s the best mix of mobile site, app and SMS?
The immediacy and simplicity of the SMS ‘short code’ means it is often the best way to get an initial sign-up or programme registration, which can then be followed up through other channels. Similarly, the ‘QR Code’ has recently appeared which involves a handset-scanned barcode that allows mobile web addresses to be shortened. This provides consumers with convenience that could encourage interaction or perhaps enables brands to house exclusive online content. However, once again this technology is primarily used by early adopters.

While SMS remains popular for many brands because of its compatibility with older phones, a much bigger impact is possible with both apps and mobile sites, both of which can be dynamically personalised with rich media and emotive calls to action.  Apps can also make more intelligent use of local knowledge when the smartphone has GPS- or network-based geolocation enabled, providing customers with content and offers that are directly relevant, in real time. For example, Cathay’s Asia Miles  programme offers a mobile app (on iPhone, iPad, Android and Galaxy Tab platforms) that not only replaces or supplements the member’s plastic loyalty card, but also lets them check their points balance and find nearby partner restaurants. There are also two games that build not only a sense of ‘fun’ (a ‘Travel City’ challenge) but also customer engagement (a hunt for Asia Miles branded objects).

While mobile web sites offer the greatest platform-independent flexibility because they are based on common mobile web browser standards and relatively similar screen sizes, they lack the ability to integrate smoothly with features of the smartphone (such as GPS), and so are useful as ‘pull’ marketing tools, compared to the ‘push’ ability of both SMS and apps.

Overall, the most prominent point here is that whatever mobile technology or channel used, it is how this is considerate as part of the wider marketing mix that will ultimately dictate the success of any strategy.

How will mobile and other channels be integrated?
It is vital that content from all channels be consistent and up to date, both supporting the brand and driving ‘calls to action’ that meets the needs of the customer. Content management therefore needs clear processes and a continuous review of new and emerging technologies, channels and standards in order to stay relevant and ‘fresh’ for the majority of customers. Brands that have transitioned to a multi-channel targeted strategy have been able to capitalise on consumer’s desire for truly targeted offers. For example, a study in the US highlighted that brands that have integrated mobile into their mix have seen a 78% increase in online sales, a 59% increased profitability, a 52% increase in customer satisfaction, 20% fall in operating costs and 18% witnessed a reduction in call centre volumes3.

Can the mobile channel’s results be measured in terms of ROI, loyalty and engagement?
Fortunately, measuring results from mobile initiatives is relatively easy, as every interaction is highly trackable and each consumer can be easily identified (by using their mobile number, for example, even if no loyalty membership number is in play). From this point of view, mobile metrics can be easily integrated with other existing digital metrics to provide a clear view of the relationship, engagement, and incremental profit per customer, right from ‘first contact’.

The return on mobile investment

Whether you choose to put your brand portfolio, product catalogue, sales channel, customer service, or your loyalty programme into the mobile channel, it will be your choice of platforms, your offering of customer benefits and value-adds that ultimately dictates your return on mobile investment.

1 Gartner Research: Worldwide Ranking of Mobile Device Manufacturers (Feb 2011)  
2 DemandWare: Examining the Changing Consumer and the Implications for Retailers

3 Article: Retailers fail to meet demands of today’s savvy shoppers , Helen Leggett (June 2011)


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