The Gratification of Instant vs. Deferred Rewards

Receipt-Tape-BCompanies continue to find innovative ways to incent and reward mobile commerce behaviors.

Visa this week introduced an enhancement to its Visa Offers program, which allows merchants who take Visa credit cards to send targeted rewards to Visa cardholders.

After a consumer opts in to receive offers -- another totally separate challenge in itself -- merchants can send targeted offers to Visa cardholders.

I can’t count how many mobile entities are aiming to enable targeted offers to consumers based on their location, context, past behaviors and the like.

The interesting catch here is that the rewards are instant and noticeable, not in the mobile but in the physical world.

The neat twist Visa added is that at the point of sale, the real-time redemption of coupons or offers can be seen on the receipt.

Credit card discount ties into mobile commerce typically result in credit applied directly to the credit card account. This method can work well, since no salespeople have to be trained or even involved. But the reward may come weeks later.

For example, when a Foursquare restaurant check-in results in an American Express rebate if

more than $20 is spent, the restaurant does nothing while the knowing consumer receives the credit on their next AmEx bill. Nice savings for a consumer and good support for an American Express-using establishment.

But the Visa approach adds a new dimension of immediacy. The reward can be seen at the highest moment of value:  when the actual money is being spent.

I’ll be very interested to see if there ends up being a difference in this instant-reward approach compared to the deferred reward tactic.

All of these incentive approaches to modify consumer behavior around mobile commerce may come down to the value of instant gratification.

I’m not sure whether it’s the instantaneous nature of the reward given or the if the magnitude of the reward trumps timeliness.

What do you think? Timeliness of reward or size of it?


mCommerce Summit Update: Verizon Wireless, Bank of America, Unilever, Hyatt, Walgreens, , Foot Locker, Verizon Wireless, Western Union, Pandora, Giant Eagle, Ansible Mobile coming.  June 16-19, in Kohler, WI. Check it out here.

8 comments about "The Gratification of Instant vs. Deferred Rewards".
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  1. Jason Gross from VeriFone Media, May 15, 2013 at 12:56 p.m.

    This is not actually how Visa Offers works (from what I understand). You correctly point out that the immediate gratification is a big part of the consumer value proposition, but Visa only gets 50% of the way there. The discounts are still applied on a statement credit. What you get in real time is typically a text or an email that the discount has been "applied."

    The necessary UX for successful mobile offers redemption requires three components: 1) you can easily store and view what offers you have; 2) you can apply all relevant offers in a single, frictionless interaction at checkout; and 3) the discounts are applied at the POS and are reflected in the total paid (like a paper coupon).

    We're almost there, but not quite.

  2. Chuck Martin from Chuck Martin, May 15, 2013 at 3:04 p.m.

    Thanks Jason and we agree on your point about there being various components around successful reward redemption.

  3. Jason Gross from VeriFone Media, May 15, 2013 at 3:11 p.m.

    My apologies to our friends at Visa. I asked and they are actually rolling out a solution for real-time application of the discounts on the POS. I'm eager to give it a try.

  4. Chuck Martin from Chuck Martin, May 15, 2013 at 6:27 p.m.

    No prob, Jason, glad to see our research was correct. The information which came from Visa.

  5. Pete Austin from Fresh Relevance, May 16, 2013 at 5:38 a.m.

    I just left Vodaphone because I was fed up with their "freedom freebies" program that consisted of trivial offers that were never worth claiming, a lot of text spam, and a 28-day unsubscribe period. So I'd be worried about any "offers" plan that included a merchant sending me texts.

  6. Chuck Martin from Chuck Martin, May 16, 2013 at 11:45 a.m.

    Will be interesting to see how many consumers lean which way, Pete.

  7. Paluel Flagg from Street Savings, May 16, 2013 at 6:48 p.m.

    I agree with the point that immediate redemption is a superior consumer experience. Apparently immediate redemption is not automatic with the new Visa Offers platform.

    I reference Tom Noyes blog where he states: "The Visa 'POS Offers Redemption Platform' is really a “credit” that COULD be given on the receipt if the retailer’s POS interprets the message, and IF the issuer allows it. Thus the entire platform suffers from targeting, basket level redemption, consumer experience, POS integration, Issuer permission..."

    Perhaps a bit harsh but it shows that there are/will be many solutions but none that completely solve all the issues.

    You can read the full blog here:

  8. Chuck Martin from Chuck Martin, May 16, 2013 at 7:22 p.m.

    Thanks for sharing that with the link Paluel.

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