Mobile coupons - no need to cut out loyalty

No one wants to be without their cell or mobile phone. Especially now with new technological advancements, consumers rely on their mobile phone to access relevant, real-time information. As a result mobile couponing or the delivery of offers direct to customer handsets has grown significantly over the past 5 years, particularly in the retail sector. But just how successful is their use in driving customer engagement and loyalty?

Mobile couponing quite simply ticks all the right marketing boxes:  fast to deliver; measurable, cost efficient; accessible; and very flexible as coupons can be targeted based on customer data often in a timely or geo-targeted way.

With over 300 billion paper coupons being issued every year in the United States, companies who use mobile couponing over paper couponing can save vast amounts of money whilst being friendly to the environment. But the benefits run much deeper than cost-savings alone.

Growth and positive results forecasted

Mobile coupons can be sent to and retrieved by the consumer via SMS, MMS, application or bluetooth and with the coupon or barcode being delivered and stored on the mobile, the consumer has easy access to be able to use them.   As a result mobile coupons enjoy far higher redemption rates, often double digit percentages as compared to their paper-based counterparts.

Mobile coupon redemption statistics can be used as a reflection of their success in driving brand engagement and future forecasts are even more optimistic.  Juniper Research reported over 50 million mobile coupons redemptions worldwide in 2008 which they predict to quadruple to 200 million in 2013. 

The Far East accounts for the greatest proportion of redemptions driven by the abundance and availability of bar code device readers in supermarkets, department stores and restaurants although North America and Western Europe are predicted to be next to experience substantial growth. 

Impact on loyalty and future trends

To date, mobile coupons have primarily been used in a tactical manner to influence short term purchase behaviour through discounting to drive increased revenues for particular brands.  Marketers are still a way off widely using the mobile phone as a channel to support longer term loyalty and commitment. That said, it is logical that brands with an existing loyalty programme are more likely to derive success from mobile coupons.

Loyalty programme members have by definition self selected themselves as wanting to have a stronger relationship with a brand and value being rewarded for their expenditure.  The member data and insight captured from the programme allows for more sophisticated targeting of relevant offers and incentives.

Furthermore whilst the offer is received on the mobile, it can be transferred to their loyalty card and redeemed that way if preferred.  Safeway and Kroger are two of the largest grocery retailers in the United States offering this to their customers.

In addition to this service, customers can also go online and self select their coupons. Providing consumers with more choice over how to access and redeem coupons will improve brand interaction with all customer - whether a member of the loyalty programme or not.

Mobile phones have not yet been adopted widely as a payment mechanism in most countries but with further technological advancements, it is predicted that they will increasingly grow to become the consumers 'personal wallet'.

The future vision could see mobile phones replacing the loyalty membership card altogether enabling customers to pay, earn and redeem their rewards by a single means.  The success and positive future predictions for mobile coupons create a level of confidence that whilst it may be some way off, it could become a reality that the mobile phone evolves to become a core loyalty tool.

Watch and learn

Mobile coupons provide the customer with pertinent and immediate tangible value and as the technology becomes more advanced and widely adopted, penetration will undoubtedly intensify in all markets. 

Marketers should be keeping an eye on the trends and learnings being exhibited in the Far East and the United States and considering how mobile couponing strategies both now and in the future could help them create more profitable long-lasting customer relationships