THE 10 COMMANDMENTS OF MOBILE LOYALTY

Transcription

1 How to use the mobile channel to establish and deepen valuable relationships with consumers THE 10 COMMANDMENTS OF MOBILE LOYALTY 2015 MOBGEN B.V. All rights reserved. May not be copied or distributed without permission.

2 INTRODUCTION THE MOBILE PHONE IS THE MOST IMPORTANT GATEWAY INTO THE LIFE OF THE MODERN CONSUMER At the start of 2015, the number of mobile telephone subscriptions worldwide totalled 7.2 billion. A figure which annually increases by 5 percent [1]. During the year s first quarter, more than a third of the world s ecommerce purchases were made via the mobile channel [2]. In the same period, the IOS and Android apps stores were offering more than 2.5 billion apps between them. Consumers now spend more time using these apps than they do on their desktop or mobile web [3]. In a world where brands have to fight increasingly hard for consumer attention, it is essential to remain within reach throughout the entire customer journey. Now that the vast majority of consumers are mobile, brands have no choice but to follow suit. Claiming a space via the mobile channel is therefore a key challenge for every marketer. This battle is already in full force. And the arena is multi-faceted and intense, just like the relationship between consumers and their mobile phones MOBGEN B.V. All rights reserved. May not be copied or distributed without permission. 2

3 The mobile phone influences things such as how consumers gather information, move around and orientate, make purchases, plan holidays and conduct relationships. You could say it s the logical extension for immediately satisfying a great many daily needs. For brands who understand how they can integrate themselves here, a rich array of opportunities for establishing and intensifying consumer relationships lies open. However, effectively capitalising on these opportunities isn t simple. A great many downloaded apps are forgotten about after a short period of use, or simply not even downloaded in the first place [4]. The big question this raises is: which conditions do brands apps need to satisfy in order to establish lasting and selfstrengthening relationships with customers? To provide a thorough answer, MOBGEN analysed 35 successful apps from large retailers, banks, airlines and hotel chains. Selection for analysis was based on significant qualities such as the app being downloaded a large number of times, having high ratings for things such as user interface and user experience, and the achievement of commercial success. The careful analyses of the selected apps together with a large amount of relevant research led to us being able to define 10 key conditions for optimal contact with the modern consumer. MOBGEN calls these The 10 Commandments of Mobile Loyalty.... 3

4 THE 10 COMMANDMENTS OF MOBILE LOYALTY 4 5

5 ENTICE THE USER THROUGH THEIR PERSONAL PROFILE

6 The personal profile is the logical gathering place for all of an app user s most important personal information. For example, their name, age, address or location and a host of other personal preferences which may be relevant to their relationship with the brand. This information is a prerequisite for getting to know the consumer better, and for establishing a good position from which to offer relevant personalised services and content. To coax a user into sharing their information, the first login experience needs to be as accessible and simple as possible. This can be facilitated by things such as social login [5]. The user s personal profile can eventually be built up by asking more detailed questions at a later stage. For an optimal result, the brand should always explain how the users information will be used to deliver them added value. More information about the power of personalised offers via the mobile channel follows later. Users willingness to share more information can be further increased through enabling a high level of control and choice about what s shared. Various research shows that consumers feel more at ease when they know they are able to change or remove details at any time. Also that they appreciate being allowed to decide how and for what purpose their information is used. For example, whether or not to enable location-based offers. Just about all the apps MOBGEN researched offered users a wide choice of options.... 7

7 OFFER THE USER PERSONALLY RELEVANT CONTENT

8 A large proportion of downloaded apps are only ever used once or twice. An obvious reason for this is that users find insufficient added value in these apps. One of the most effective ways to demonstrate added value is to offer personally relevant content. [6]. The apps examined in MOBGEN s research were found, in particular, to be making use of exclusive mobile first content with optimised visuals and video displays. This content serves a major role in informing users and arousing their curiosity. Successful content apps from Urban Outfitters and Victoria s Secret Pink provide good examples of this approach. The latter generates as much as 70 percent of the famous lingerie brand s digital traffic in the millennial customer segment. Users are offered based on their personal preference, content such as daily new backstage videos from Victoria s Secret s acclaimed fashion shows and other events. Meanwhile, Urban Outfitters app provides its users with things such as a profile-based continual stream of fashion news and tips. Images of models dressed in the brand s clothes are presented via Instagram s integrated photo service. More information about the use of social media in this context follows later.... 9

9 CARE FOR USERS BY OFFERING SERVICES WITH RELEVANT ADDED VALUE 3 Mobile phones can provide an optimal connection between brand and consumer at any place and time. The services which enable consumers to use their phones at any given moment are therefore an important factor [7]

10 For creative brands, this presents a whole world of opportunities for offering relevant added value. In this aspect, a proportion of the researched apps provided a directly relevant relationship with the product, for example with the ability to scan products or services, to arrange personalisation, or to order. Other apps offer users relevant related information and possibilities such as maintenance tips or advice on smarter and more efficient ways to use their products. Of course, detailed knowledge of the consumer s needs and wishes are of enormous value here. Successful brands engage specialised User Experience (UX) and User Interface (UI) teams who precisely understand how to place themselves in the consumer s world. This knowledge results in focussed services which make users lives easier and more pleasurable. Two apps which really set themselves apart in this manner are those by Starwood Hotels and Walgreens. To simplify the check in process and cut waiting time at the front desk, the hotel chain s app enables guests to check in and open the door to their room. Meanwhile, the pharmacy Walgreens app helps users by reminding them to take their medicine at the time it s due. And when they have almost run out, the user can simply scan the package and collect a new supply at the shop. Possibly also with discounts from app-delivered coupons and other advertisements

11 INTEGRATE THE LOYALTY PROGRAMME Every business person is familiar with the rule of thumb that 20 percent of the 4 customer base accounts for 80 percent of the income. Research shows that retaining 5 percent more customers can lead to a 25 to 125 percent increase in business, and that the cost of doing this is generally lower than that of attracting new clients [8]. Loyalty programmes therefore remain as popular as ever. What s changed is that more and more brands are electing to integrate their plastic loyalty programs in their apps

12 Customer needs are once again a leading factor here. An increasing number of consumers need digital access to their loyalty programmes. What s more, they re happier with that than the plastic alternative. They re also more likely to take part: the 2015 average of 14 programmes compares to 10 in the previous year [9]. A major reason is the increased convenience. A user will typically have their mobile loyalty programme with them at all times, in contrast to the often forgotten plastic card. Intrinsic mobile telephone functionalities such as the screen, camera and barcode and QR code readers offer a great choice of additional usage possibilities. A good example of an app which makes optimal use of these aspects is the Shell Motorist App. The loyalty card that s integrated in the app in the Netherlands can be displayed on the screen as a QR code. With help from the set-up-to-preference visual cards, the user can view simple and well-organised information about recent purchases, points balance or other relevant details. Additionally, it can be personalised providing time and location-dependent offers. For example, an offer for a favourite sandwich, at the exact moment the customer drives in to the petrol station

13 OFFER USERS DISCOUNTS AND PROMOTION CODES AT THE RIGHT TIME AND 5 LOCATION A major additional benefit of mobile loyalty programmes is the ability to send push notifications. Particularly if this is relevantly seized upon with regard to the user s time and location-dependent needs, their engagement through this method can significantly increase. One of the most effective applications of use is the sending of promotion and discount codes. Additionally, distribution of such codes via the mobile app can be much more efficiently targeted. Mobile technology offers a whole range of extra opportunities in this area. For example, the fact that pretty much every phone includes GPS functionality makes it possible to specifically target users who are in a shop s immediate vicinity. Or ibeacon technology, with which customers inside a shop can receive tips and offers at exactly the right moment, for instance as they re standing next to a particular shelf

14 Additionally, this makes it possible to record which shelves a customer has paused by for longer, and which products eventually ended up in their shopping basket. These new possibilities result in very effective communication. Research has shown the activation rate of mobile offers in international campaigns to be 25 to 35 percent higher than similar ones done via [10]. When run in parallel with direct-marketing messages, this percentage can rise to an increase of 90 percent. Similar percentages inevitably lead to the conclusion that the mobile channel is outstandingly suitable for rewarding loyalty customers with targeted offers or other premium benefits. The ability to share relevant in-store information with customers has been put to use in a very effective way by Macy s. The department store chain installed ibeacon technology in its shops, through which customers are offered various types of content that adds value to their visit. So they receive relevant discount codes as they pass through the different departments, which can act as an extra trigger for purchasing products they have already shown an interest in. During the American Black Friday sale in 2014, customers received offers and gifts which they could redeem via a QR code. The campaign was extremely successful

15 ENSURE A FAST AND SIMPLE POSSIBILITY TO REDEEMING POINTS 6 Fast, simple, and conveniently-organised redemption of loyalty points is a major motivating factor for many customers participation in programmes [11]

16 Brands can effectively complete the loyalty loop by integrating this essential step in the app, for example by enabling direct access to webshops or redemption of personalised offers. This considerably improves the customer s user experience, and increases their motivation for maintaining and intensifying their relationship with the brand. An outstanding example of a brand which understands this well is Starbucks. Back in 2009, the coffee chain introduced a loyalty programme and ability to pay which works by scanning a barcode displayed on a mobile telephone screen. According to Starbucks, around 13 million of their customers (Q4 2014) have got the app on their phone, and this is used for 16 percent of the 47 million weekly transactions. This success is partly due to the fact that the accumulation and spending of points ( stars ) is made really simple. As each purchase is paid for via the app, Starbucks adds the earned stars directly to the customer s digital account. This is immediately visible on the homescreen. At the same time, users can see how many points they still need to get a reward, or to reach the loyalty programme s next level (e.g. Welcome, Green or Gold). When their total reaches a certain level, the customer receives a separate notification to tell them things such as they ve earned enough points get free food or drinks. To cash in the reward, all they have to do is get the barista to scan the app-generated barcode

17 OFFER A SIMPLE MOBILE PAYMENT SOLUTION 7 The mobile telephone is the new wallet. These days just about all new smartphones are equipped with the necessary technology as standard, and its use is expanding rapidly. Compared to payment by PIN, mobile phone payments are on average 7 seconds faster. Compared to cash, 16 seconds faster. This impacts time, effort, and turnover. An increasing number of brands have therefore taken the logical step of integrating a payment function in their app

18 This method also enables them to take control of an important part of the customer experience, and the essential transaction data which comes out of it. Data through which the brand can more closely link the customer s purchasing behaviour to their loyalty card. With this knowledge, communications with customers via the app can further be personalised, for example, with targeted offers for the most relevant products at the right moment. Additionally, research has shown that the ability to pay via the mobile channel strengthens customers motivation to use discount coupons, and vice versa [12]. The previously mentioned example concerning Starbucks demonstrates how important and relevant the incorporation of mobile payment in a branded app can be. As already stated, around 13 million of the American coffee chain s customers are already using their app, which accounts for 16 percent of their 47 million weekly transactions. According to well-substantiated estimates by Business Insider, the chain generated around 1.5 billion dollars turnover in 2014 via the mobile app. And the number of mobile transactions is doubling every 2 years

19 DISTRIBUTE YOUR CAMPAIGNS VIA THE APP The effectiveness of large scale campaigns is on the decline. This is one of 8 the major reasons brands are increasingly turning to the mobile channel for distribution

20 Mobile apps present numerous and multi-faceted opportunities to do this in creative and personalised ways. Research at Coca-Cola, Walmart, MasterCard and AT&T shows that greater emphasis on the mobile channel leads to a significant rise in total campaign ROI, without having to increase the overall budget [13]. Subway is one of the brands that has successfully utilised their app s opportunity to distribute targeted, creative and personalised campaigns. Our own research on the restaurant chain showed that only 1 percent of discount coupons distributed to customers via were redeemed. The take-up on discount codes distributed via Subway s app was nine times as high. A total of 9 percent of all clients who received a discount code via their app stated they d used it to redeem offers at the till. Victoria s Secret (previously mentioned) distributes almost all its campaigns via their own app. For example, this was how the lingerie brand launched its Scavenger Hunt campaign at the start of In this, each week users were challenged to scan a new photo which the brand had switched out on its website, in shops and on university campuses. Users who succeeded in scanning all the photos were rewarded with small gifts and exclusive content. The promotion increased the brand s total monthly sales by no less than 2 percent [14]

21 INTEGRATE THE USER S SOCIAL MEDIA

22 Social media is an essential part of many consumers (digital) lives. For this reason, apps which succeed in making a connection between their own purpose and the user s social media activities are a step ahead when it comes to increasing their brand engagement [15]. There are plenty of appealing options for realising this. Various clothing brands included in the MOBGEN app research did so by sharing pictures of garments and collections via Facebook, Instagram and Pinterest. A major benefit is the ability to add the likes generated through this method to the users profile information. This gives the brand the opportunity to compile a more accurate picture of the user. Through this, subsequent communication can be more tightly aligned with their needs and interests. Additionally, social login makes the app considerably easier to use due to the increased convenience. Some apps also offer users the opportunity to view and order clothes they like directly via social media. Urban Outfitters app is an outstanding example of this. Via Instagram s integrated photo service, the app shows selected images of models and consumers wearing the brand s clothes. Users can purchase the items shown in these pictures by clicking on the relevant part of the in-app integrated webshop

23 ENABLE IN-APP SHOPPING

24 The number of purchases made via the mobile channel is rising rapidly [16]. Consumers want to be free to make changes at any given time right up till the moment of purchase, and expect brands to facilitate this with flexibility and ease. A mobile ecommerce platform which offers seamless 24/7 shopping no longer represents added value, but is an essential condition for optimal customer contact. Integration of this platform into apps is therefore an effective and logical solution. Brands which understand this well include Target, Amazon and Starbucks. Retail chain Target s app allows users to scan product packaging to make the purchase online or save for a later time. If they shop online they can choose whether to have the purchases delivered or made available for collection at the store. Meanwhile, the Amazon Price Check app enables its users to get online price comparisons and read reviews of photographed or scanned products, before ordering them instantly from Amazon. Starbucks is presently working on a service which makes it possible to place mobile orders for coffee based on your current location. Thanks to the detailed insights they have into purchasing times, locations, and products, the coffee chain is in a position to give customers extremely relevant offers. Dear customer, it s almost four o clock. There s a Starbucks 300 meters from you where you can collect your daily latte! Or would you prefer us to bring it to you?... 25

25 CONCLUSION The mobile app is a very effective channel for keeping consumers up-to-date with information, entertainment, news, social content, product information, discounts, and other campaign communication. The intrinsic functionality contained in today s mobile phones means time and location relevance can be incorporated in these communications. Analysis of (customer) data generated through the mobile channel also makes it possible to create a closer rapport with their personal preferences and requirements. The Commandments of Mobile Loyalty form a powerful guideline for making optimal use of these possibilities. It s not absolutely necessary to apply every one of the Commandments to every individual case. But combining various Commandments to generate worthwhile synergy through the deepening of customer relationships is a must. Brands which do this well can complete the entire customer journey from beginning to end through their mobile application, and with that strongly enrich the ever-important customer experience

26 MOBGEN is an abbreviation of Mobile Generation. The optimal combination of technology, strategy and creativity within the mobile channel has been our main driving force since we first started out in All the experts, technology and knowledge we ve amassed since then are brought together with this specific goal. In the rapidly changing mobile landscape, at every turn we come up with innovative new answers to the central question: How do you optimally use the mobile channel to establish and deepen valuable relationships with consumers? MOBGEN is happy to help your business find the best possible answer to this question. The establishing and intensifying of customer relationships via the mobile channel has its own dynamic in every field. To best capitalise on these unique dynamics, MOBGEN will be producing a series of industry-specific whitepapers for retailers, banks, airlines and hotel chains. The first of these, which will be for retail, is due to be published in August

27 A clear mobile strategy and business case is always an essential starting point. It s also crucial that the app performs optimally under all conditions, and that the right tools are used to deploy and maintain it successfully worldwide. MOBGEN is specialised in the optimum combination of technology, strategy and creativity in the mobile channel. Everything we do revolves around a central question: How can you best use the mobile channel to create and deepen a valuable relationship with consumers?... 28

28 MOBGEN can help your company formulate the best possible answer. Contact us: MOBGEN AMSTERDAM Ron Vrijmoet Michiel Ebeling Jordy Bossen MOBGEN LONDON Sam Contractor / mobgen.com... 29

29 REFERENCE LIST [1] Ericsson Mobility Report (june 2015) [2] Criteo State of Mobile Commerce Report, (Q1 2015) [3] Comscore US Mobile App Report, (August 2014) [4] Nielsen research (july 2015) [5] LoginRadius: Social Login and Sharing Trends 2014 (May 2014) [6] Oracle, Millenials and mobility: How businesses can tap into the app generation (May 2015) [7] Forrester: CMO s: Own Mobile to Own Customers, (May 2015) [8] Maritz Loyalty Report (2013) [9] Bond Brand Loyalty, 2015 Loyalty Report [10], MOBGEN, Mobile Loyalty Research ( 2015) [11] Bond Brand Loyalty, 2015 Loyalty Report [12] Accenture Payment Services research (2013) [13] MMA Cross Marketing Effectiveness Research (June 2015) [14] App Annie & Internet Retailer Index ( Q1 2014) [15] Salesforce, Mobile Behavior Report, 2014 [16] Criteo State of Mobile Commerce Report, Q

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