Mobile Coupons - The Holy Grail for Mobile Marketing?Apr 5, 2009 5:00 PM MDT
Mobile Coupons - The Holy Grail for Mobile Marketing?
The mobile marketing industry could be experiencing the perfect storm for 2009. Conditions are ripe for what would finally be considered the year of mobile for North America. There are many conditions, however in my opinion the most relevant are:
1. State of the economy.
Coupon cutting and saving is common practice. 2009 is poised to see the renaissance of coupons where redemptions are expected to rival figures of the early 1990s.
2. Need for innovation.
Marketers recognize this difficult time lends itself to innovation and many marketers would agree that adopting a mobile strategy is a question of when, not if.
3. Sophistication of handsets.
It’s crucial to recognize the mobile industry is more than shortcodes, display advertising and mobile internet sites. The iPhone and recent launch of the Blackberry app storefront are important dates in the early history of mobile marketing. Applications permit advanced functions and features that significantly address what many marketers considered a major drawback of Mobile – utility. Apps use location based information, RSS & XML integration that can scrape live information like price comparison tools but more importantly help brands address content to keep those eyeballs fixated on the small screen.
(Arguably could add other conditions like: need for accountability & ROI metrics, eco-friendliness, & youth marketing.)
Mobile Coupons have a major hurdle to overcome – POS terminals and retailer adoption.
The idea of mobile coupons has been around since mobile marketing started in the early 1990s. The earliest form of mobile coupons (which still remains today) is the “show and save” variety. The concept is simple, a consumer receives an SMS, MMS, or accesses a coupon hosted on a mobile internet site and the till person rewards the user with a rebate with purchase. Coupons can have a static coupon code or in some cases a unique PIN number is delivered. Time stamps on codes can help prevent fraud but typically the retailer will simply serve up an offer that does not erode significant margin on the product. The POS system should have a dedicated static promo code associated with the offer for tracking purposes. In some fortunate circumstances a POS system can access the internet where a unique PIN number can be expired from a shared database. Unique mobile coupons, where a till worker must input a code is typically reserved for longer checkout times. Easier still is rewarding a unique PIN number for an e-commerce transaction. Many e-retailers offer a promo code field prior to checkout. Don’t even think about having a till worker at checkout input a pin number for a low involvement item like a candy bar. Reserve these types of offers where there isn’t a line up at checkout, or if the retailer has a mobile scanning solution in place.
Next generation mobile coupons.
Next generation mobile coupons are scanned directly from the handset. Generally speaking there are two types of codes – 1D and 2D a.k.a. QR codes. (There are multiple types of “matrix” codes such as Microsoft “tags”, which use the colour spectrum to code data as opposed to black and white spaces) Keep in mind these codes are terminated on your handset, like the Air Canada wireless boarding pass. Not only must POS systems be able to scan images from the handset, the systems ideally should process transactions in real-time via an internet connection. I realize this might be asking quite a bit, but it can be done. The technology exists today where a consumer’s physical location can be embedded in a code and tracked back upon conversion. This implies that a purchase can be tracked as granular as individual TSAs (Transit Shelter Ads). How about that for ROI! And no need for a brand’s key account representative to count physical coupons and issue rebate payments to retailers at the end of a promotion. It’s a simple database query of coupon scans from the retailer’s centralized database. This picture becomes more exciting when mobile commerce and mobile transactions are widely adopted. A consumer won’t even need to go through checkout! RFID (Radio Frequency Identification) and enhanced SIM cards tied to a consumer’s credit card will permit a consumer to simply walk out the merchant’s front door.
Walking before running.
The previous description is based on an optimal scenario of retailer infrastructure, consumer adoption and a brand with a major emphasis on innovation. In the spectrum between “show and save” and mobile commerce there are other options for brands and retailers to explore mobile coupons. In my opinion loyalty programs offer worthwhile consideration. Here’s how I envision loyalty programs leveraging mobile coupons:
Step 1 – associate the unique loyalty card number (like a Shoppers Drug Mart Card) to a mobile number, achieved by having the consumer complete a form with both number fields. Or, urging the consumer to submit a text message (via a shortcode) with their card number.
Step 2 – offer rewards and coupons through your channels with mobile coupon calls-to-action. For example, DOVE can have a 50% coupon advertised in Chatelaine Magazines where consumers claim the coupon by texting “DOVE” to a shortcode number (OR have a user click on a display banner ad from the big screen where the user must input their mobile number)
Step 3 – when a consumer purchases the item at Shoppers Drug Mart and the consumer’s loyalty card is scanned the rebate is applied and the receipt reflects the coupon. Close the messaging loop by triggering an SMS, email, or application update with a “thank you for redeeming your Dove coupon”