Loyalty Customers Drawn by Some Messages, 13 a Month Is the Limit

Consumers who are members of loyalty programs appear to be getting the message.

While mobile wallets inch along, as I wrote about here last week (Mobile Commerce & the Year of the Mobile Wallet), messages sent to customers of small businesses seem to be driving an increase in commerce.

Last year I visited several New York establishments using a mobile check-in system called SpotOn to check out consumer reaction.

The stores, such as nail salons and quick service restaurants, have a Samsung Galaxy tablet where customers with the SpotOn app open it and flash the QR code on their phone in front of the tablet to receive points.

The system is essentially a digital replacement for those cards a merchant marks with pen or pencil following a purchase.

At the time, the merchants and customers I spoke with found the system pretty simple, though it was in its relatively early stages, only allowing check-ins and instant redemption after a certain number of purchases.

The system evolved over time so that merchants could send real-time digital offers inviting customers back and now SpotOn has some data on the results.

It turns out those merchants who frequently communicate with loyalty program members get a boost in customer return visits.

An interesting tidbit is in the impact related to the number of messages sent, most (59%) of which are opened on mobile devices.

Small business that sent two to three messages a week saw triple the number of store visits compared to those not sending messages and sales increased in a range of 15% to 50% based on the messaging campaigns.

However, there appears to be a point of diminishing returns, as businesses that sent more than 13 messages a month saw reduced customer visits.

Email messages sent had an average open rate of 41% and campaigns that included a redeemable offer had open rates 20% higher than non-promotional emails. This is consistent with regular research showing that mobile shoppers are attracted to deals.

The company says the check-in system is in about 6,000 businesses, ranging from the small businesses I visited to chains like Denny’s and Chick-fil-A.

The system does not do mobile payments and does not pretend to be a mobile wallet.

All it does is automate the age-old system of rewarding loyal customers and adds the ability to remind them when it’s time for a deal.

Sometimes it’s the little things that advance mobile commerce.

2 comments about "Loyalty Customers Drawn by Some Messages, 13 a Month Is the Limit".
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  1. Pete Austin from Fresh Relevance, May 20, 2014 at 7:50 a.m.

    Let's see if I follow the logic of this. The first example store is "nail salons", which I know a lot about. Typical customers visit about every 2 weeks for infill or new acrylic nails, governed by e.g. the rate at which nails grow and parties come along. Yet the optimum rate for contacting these customers with digital offers is allegedly 12 times a month - a rate that's so high they can't possibly respond to more than a small proportion of offers. I get that regular social marketing contact is good - I know of a few salons that post every day on facebook - but that's not what we're talking about here.

  2. Chuck Martin from Chuck Martin, May 20, 2014 at 10:15 a.m.

    Thanks for your comment, Pete, that was but one of many different kinds of businesses, like QSR, that use the system.

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