Commentary

Playing The Loyalty Card

Am I the only one who feels like an interloper in most mall retailers? Whenever I accompany my daughter into one of her trendy, youthful clothing stores, the 20-something clerks are clustered around the cash register loudly trading personal stories, gossiping and generally conducting their social lives. This is the kind of public show of their personal information I would expect to see during their coffee breaks, not broadcast at the check-out. Their connection to the customers is oblique at best. Usually I feel as if I've dropped into an episode of "Friends," not a store. Work, serving customers, appears to be getting in the way of their socializing. As my daughter is quick to point out, this is just another sign I am getting old and cranky. Well, I am old and cranky, but that is beside the point. If the staff isn't going to communicate with customers, then perhaps merchants should just dial their customers directly.

The retail environment seems so rich with possibilities for cell phones, and yet marketers are just beginning to explore ways to initiate in-store conversations with customers. Access 360 has been leveraging its network of retail video screens and stand-ups to trigger SMS interactions. NearbyNow lets mall crawlers explore store inventory and reserve store items with a salesperson's name via a text message. And then of course we are seeing couponing get traction. I am now accustomed to having my regular Borders email coupons also show up in my SMS in-box for easier use. I wish half a dozen other favorite retailers did the same.

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At some point in the future, retail-to-mobile conversations could use some standardization that is akin to the loyalty card. In fact, there is no reason why cell phones couldn't replace those customer cards that now fill my wallet and crowd my key chain. A simple call-in or SMS while I am in-store could deliver a coupon and at the same time record my visit with the merchant. A small new Florida company, PlumReward, is exploring a variation on this theme. Using connected PDAs that sit next to a store cash register, customers can key in their cell phone number and elect to receive future mobile communications or just record their visit for later rewards. I asked PlumReward President Jonathan Goodyear why the system even needed a dedicated device. Why not have customers join up or record a visit with a simple text message? In many cases, there is alternate SMS entry offers, but "we found that customers are literally four to five times more likely to use the keypad," he says. "It is much lower friction. They just put in their cell phone number and are done with it." The cell phone number could become a sort of universal identifier, and a system like this avoids saying your phone number out loud to a clerk.

In Goodyear's early tests, it turned out that a lot of people knew how to receive and even reply to an SMS, but not to initiate one. On the back end, of course, the retailer has a reliable way of recording return visits and a direct back channel to the customer. But only about half of the customers opt into persistent messaging. Many people just use the system to replace their customer loyalty card. The self-selection of opting into a system like this leads predictably to high response. Coupons with a short expiration window of a day or two can deliver 7% to 15% redemption rates, but coupons with longer windows range from 15% to 23%.

Local Florida franchise owners of Planet Smoothies, Quiznos, Arby's and Pizza Hut are starting to try PlumReward. After only four months, the company has 25 stores up and running. A typical Planet Smoothie outlet already has 600-1000 customers in the database.

Who knows whether a common platform will emerge for leveraging the cell phone at retail. PlumReward seems like an interim device that eventually morphs into some kind of embedded near-field communications (NFC). One can imagine a cell phone service that aggregates multiple retailers so that I don't need to fish through my wallet for that Borders, Staples, GameStop, Blockbuster, Office Depot, Starbucks, Lindt Chocolate, Shop-Rite, Acme, BP, Pathmark, Barnes & Noble, or Circuit City card. Rather than that static and non-interactive swipe of the card at checkout, the phone allows for a screen of deals and information, a genuine dialogue a merchant could have with the user whenever they are coming into, within, or leaving a store.

Because lord knows I would rather have a conversation with an interactive mobile Web screen than some of these kids behind the checkout counter.

1 comment about "Playing The Loyalty Card".
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  1. Subba Ayyagari, October 7, 2009 at 4:53 p.m.


    Steve,

    We at Sterizon do much more than just clip-free, paperless coupons. We bring Email, Mobile, and Social Media Marketing in a single integrated solution using Sterizon wiZit handheld WiFi device. It provides a simple, cost-effective solution for restaurants for all their online marketing needs. We let customers use their Email or phone number as their identity.

    Regards

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