Winning hearts, minds and wallets through mobile transactions and loyalty

The rise of mobile over the last five years has changed how marketers service their customers. Mobility is a wave that has washed over the world, and as the waters settle we've found that the landscape of consumer engagement has forever changed consumer behavior and how marketers approach them. 

 

Mobility, however you define it, as a device (phone, tablet, phablet), a medium (messaging, browsing, audio/video content, apps) or an experience (news, weather, sports, transportation, entertainment, commerce) is everywhere. There are more mobile devices in use today than there are people on the planet.  More people throughout the world access the web through a mobile device than they do through the computer. We use mobile to express ourselves, through search, reviews and social media. We “second screen”, i.e. use mobile while watching TV or reading a newspaper.  We use mobile to buy goods, services and experiences and we’re often looking to connect with brands that we find an affinity with.  Marketers that understand this can win.

 

Understanding Commerce In a Mobile World

The opportunities for enabling commerce through and with mobile are immense, across all sectors.  Mobile provides the means of discovery, transaction and, as in the case of ticketing and digital services, distribution and redemption.

 

For example, in the area of ticketing, across land, sea or air or for events, mobility has a huge impact.  You can use your phone device to buy tickets, to board a plane or bus, enter a concert and so much more.  A Q3 2013 Juniper Research report estimates that 18 billion transport and events tickets will be delivered through mobile by 2018 worldwide. In Sweden today, mobile already accounts for 65% of bus ticket transactions.

 

While mobile ticketing adoption continues to rise, this is just one area where mobile impacts transactions.  Consumers are showing they’re ready for commercial engagements through mobile. For instance, a 2013 VocaLink study in the UK found that half the UK population is ready for mobile payments, 20% are already doing it and 30% intend to.  Starbucks has 10 million mobile active users and recently announced that they’re processing four million mobile transactions a week which account for 10% of their total revenue. PayPal will process $14 billion in payments through mobile this year, up 250% from last year. The list of revenue growth for major firms who have embraced mobility is long. 

 

It is important to note that there are two sides to mobile transactions – mobile payments and mobile commerce.   eMarketer estimates that payments made at a physical point of sale (POS) by swiping, tapping, scanning, etc. a mobile device (aka contactless payments or proximity payments) will reach $1 billion by the end of 2013 and $58 billion by 2017.   Payments made through mobile, that is “mobile commerce,” may be as high as $1.5 trillion this year and may reach $3.2 trillion by 2017, according to Juniper Research.  

 

The economics and role of loyalty  

Capturing a transaction, however, is not enough for long-term success.  Once you have your first sale, you want to make sure that you keep your customer and foster loyalty.  Having a well thought-out approach to loyalty is very important.  Studies have shown that consumers see loyalty programs as part of their brand relationship and that they affect how, when and where they make a purchase.

 

Like commerce, relationship and loyalty programs are being completely transformed by mobile, and consumers are ready.  Maritz Loyalty Marketing reported earlier this year that 73% of smartphone users are interested in interacting with loyalty programs through their mobile device. 

 

There are some really interesting ways in which marketers are engaging their consumers through mobile to stimulate brand affinity and loyalty and ultimately to drive sales and in many cases to reduce costs, too.  One “cool” example:   In Ireland, Budweiser launched the “Ice Cold Index App” program stating “the hotter the day the less you pay.”  Consumers that have downloaded the app get €1 off if it is 16°C outside, €2 off if it is 18°C, and they get a free beer if it is 20°C.  How is that for loyalty and taking care of your customers in need?  Similarly, Guinness has created the “magic behind the gates” program to foster engagement in pubs where users just tap their device an NFC-enabled fount.

 

Others have found success by focusing on providing a great customer experience.   In 2011 Somo, the world’s leading mobile solutions company, helped develop and launch an iPad app for Domino’s Pizza in the UK to create the best possible purchase experience.  Clearly, the efforts have accomplished a healthy return on investment. By March 2012, Domino’s was taking in $1.59 million in sales via its mobile platforms in the UK alone.  Your offering doesn’t have to be complex to provide value with mobile.

 

To be successful in driving transactions and fostering loyalty through mobile, it’s imperative that marketers take the time to reflect.  They need to evaluate their business and their customers. They should talk to their customers, listen, watch and learn, then focus on fulfilling a customer need in a contextually relevant manner and on the customer’s terms.  This is what many are starting to refer to as the “Omni-channel,” a commercial world with no borders and boundaries.  Mobility has transformed everything and opened up a new world of opportunity.

 

Author: Michael J. Becker, Marketing Development North America and Strategic Advisor, Somo Ltd.


 

Keywords: 
Mobile Commerce
Mobile Payments
Mobile Loyalty
Ticketing

 

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