Marketer's Opportunity: Mobile-Enabled Loyalty Programs

According to 3C’s 2016 Mobile Loyalty Report, 52% of consumers polled said mobile loyalty rewards and benefits motivate them to purchase more often, but 65% of brand marketers say they either lack the IT resources for mobile loyalty integrations, or admit they lack the knowledge on how to launch a mobile loyalty program.

Considering the radical evolution of mobile technology, says the survey of U.S. consumers and brand marketers, the research highlights the differences between what consumers expect from a loyalty program and what brands currently offer.

The explosion of smartphone usage is a leading reason why loyalty programs are now becoming available via mobile. Not only are there a large number of people who have smartphones and mobile devices, but nearly all of these people always have their device with them, and check their phone for messages and alerts even when their device isn’t ringing, as many as 8 billion times a day.

Not long ago, says the report, consumers needed to use a physical card that was stored in their wallet or purse. They would then have that card punched to redeem rewards or incentives. With the rise of the smartphone, important loyalty information such as loyalty cards, points balance, and latest offers is now right at the customer’s fingertips. Mobile technology and capabilities have evolved into the perfect channel for this type of engagement, as the research found almost 60% of consumers make more monthly visits/purchases because of a mobile enabled loyalty program.

There are several advantages of a mobile-enabled loyalty program, says the report, including:

Increased Basket Size

  • Customers in loyalty programs typically spend more at the store. Leveraging location services native to smartphones enables brands to drive in-store engagement and deliver expanded deals

Reduction of Cost

  • Mobile loyalty programs require less operational administration than paper-based strategies, eliminating the costly expense of print and direct mail tactics

Personalized Engagement

  • A sophisticated mobile loyalty program that integrates with back-office CRM systems opens the door for more immediate and targeted engagement with customers

Separation From The Competition

  • Mobile-enabled loyalty programs differentiate from competitors enabling improvements in the offerings

The research shows mobile remains low on the list of loyalty integrations for brands, while consumers have different priorities for their mobile loyalty appetite. 40% say overall rewards motivate them to join a loyalty program compared to special events (22%), deals/offers (20%), exclusive content (11%) and points (5%). This is critical knowledge for brand marketers, says the report, who are unclear on whether to utilize specific language of “rewards” versus “points”, with consumers clearly gravitating away from the latter.

Consumers have preferences as to the vehicle used to deliver mobile-enabled loyalty communications. 48% prefer communications via text; 22% for email; 20% through app notifications; and just 8% for direct mail. Clearly, SMS remains the largest preference in how consumers receive communications from brands.

However, though 48% of consumers prefer to receive loyalty communications via SMS vs. other channels, only 21% of brands use SMS to send loyalty communications to consumers, finds the research.

And, 45% of consumers say requiring too much information at the time of sign-up would prevent them from doing so. 22% say inconvenient times for signup would prevent them, such as forcing them to sign up while checking out in a brick-and-mortar store. 17% say irrelevant offers, and 14% say too frequent communications would also prevent them from signing up. 70% of consumers do not sign up for a loyalty program due to the amount of time required and inconvenience, and 72% of consumers are more likely to sign up for a loyalty program if the process was simplified by text messages.

Mobile Loyalty “Must Haves”

Deliver Full Mobile Access

  • If a customer receives loyalty communications on their mobile device, don’t require them to print coupons! Enable customers to enroll, earn/redeem and see program status all on devices.

Integrate Incentives

  • Go beyond rewards from purchases alone. Also reward customers for other activities such as social engagement, check-ins, shares, etc.

Location, Location, Location

  • Don’t penalize customers for using their device in the store. Instead, reward them for checking in and offer relevant incentives in the customer’s moment of need.

Leverage Plenty of Data

  • Customers like to track their progress. Make sure they can see their points and rewards status on their device and incentivize them for making their program grow.

Concluding, the report says “… give them SMS”

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1 comment about "Marketer's Opportunity: Mobile-Enabled Loyalty Programs".
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  1. Marcus Naidoo from Shop Local Club Card, July 5, 2016 at 8:17 a.m.

    Thanks for the great aricle Jack, we have developed a mobile enabled loyalty application without this research but I am certain that this information will influence our future development. 

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