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Designing a frictionless mobile loyalty program

Companies such as Starbucks, Sephora and Amazon have incorporated effective mobile loyalty programs to drive repeat purchases. To be on the same level as these marketing giants, companies need to take key steps in developing a personalized and engaging mobile loyalty program.

“The obvious first step is to have an integrated mobile site experience for opt-in consumers that is specifically designed to maximize engagement,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce.

“This can be accomplished by way of a campaign-specific landing page or a redirect code that deep links mobile traffic to a mobile-optimized page,” he said. “Then there is the consumer touch point that joins the offline and the online world.

“All these elements are important, but the most important variable is the reward the consumer gets for opting in and participating. Mobile marketers should be sure they are solving a problem or offering a reward that will fuel mobile engagement, if they want to see real results.”

Mobile loyalty
Take Starbucks, for example.

The coffee giant knows that consumers visit its locations often. It’s My Rewards program is a great incentive to continually drive traffic.

Furthermore, the company rewards consumers with a free drink or food item after every 12th star they earn. Consumers can earn a star for every purchase they make.

Then, there is Amazon.

Amazon Prime is a loyalty program like no other and one supported by a one-click checkout.

Members-only specials and services attract consumers, with free shipping as the cherry on top, per Mr. Kerr.

“This rewards loyalty and reduces friction and, as a result, Amazon expects to do $10 billion in mobile transactions this year,” Mr. Kerr said.

“Ever notice how you tend to shop for the same things at the same stores week after week?” he said. “Very few purchases, unless you are on vacation, are actually impulse buys.

“Consumers are loyal to brands and stores and mobile gives these brands and stores the here-and-now ability to engage with consumers they know are in their stores. Mobile commerce is key here too.”

As mobile commerce accelerates and consumers become increasingly willing to treat their smartphones like PCs, they will gravitate toward brands that reward them for their business by making the customer experience easier and smoother.

“By integrating with current ecommerce operations, retailers can use mobile to grease the wheels to conversion, as coupon codes, special offers, address auto-fill and other friction-reducing tools, can all be utilized seamlessly,” Mr. Kerr said.

Key steps
According to Alex Romanov, president of iSign Media, the most important step in creating a frictionless loyalty program, mobile or otherwise, is accumulating the necessary consumer behavioral data, analyzing it and acting on it in real-time.

Marketers need to analyze real-time feedback from multiple devices, such as smartphones and tablets and from methods such as SMS, push notifications and email, from which customers may prefer their brand engagement.

“Frictionless mobile loyalty, that is to say, with as little consumer incident as possible, also requires that information privacy be preserved so that program members gain brand trust,” Mr. Romanov said. “With this teamwork established, rewards can be tailored to specific members.

“The most popular mobile loyalty programs today are loyalty aggregators – programs that combine loyalty currencies under one roof and make the interchange between loyalty programs seamless and efficient,” he said.

“Successful mobile loyalty programs require a host of consumer metrics in order to craft the most accurate customer picture and send timely and relevant rewards to customers in the channel or channels they prefer.”

Loyalty also begins with trust.

And, respecting the wealth of information smartphones accumulate and disseminate to brands is critical.

“For example, consumers have to trust that when they walk past a smart digital sign and they’re asked if they’d like to receive a push notification and they say ‘no,’ that their wish is respected and they don’t feel bombarded,” Mr. Romanov said. “Likewise, under the same scenario, consumers increasingly expect that once they’ve welcomed a brand into their ‘digital hearts,’ they’ll be rewarded with offering that speak to their needs, wants and desires.

“Mobile is the medium of instant communication,” he said. “And you can be sure that if a mobile loyalty program fails in delivering on these promises, mobile users will quickly tell their friends and family about their negative experience.

“And they’ll do so across multiple channels – Facebook, Twitter, Pinterest, foursquare, among others – far faster than they would disseminate positive news. It’s human nature. Such communication can have serious positive or negative loyalty program feedbacks, so it’s critical for marketers to build customer loyalty from the get-go.”

Best practices
There are many key steps in creating a frictionless mobile loyalty program.

First, marketers must use the aspects of smartphones to make being a loyal customer easier.

“I go to my grocery all the time and forget my frequent shopper card, yet I always have my phone,” said Alex Campbell, co-founder/chief innovation officer at Vibes.

“A pass that popped up on my lock screen with my frequent shopper number would be very useful – even if I couldn’t scan the Pass at checkout,” he said.

“Help me remember why I shop at your store and show me that you know I’m different than every other customer you have.”

It is also important that marketers make the mobile experience personalized for consumers.

According to Mr. Campbell, mobile is a natural relationship builder.

Loyalty is all about a consumer’s relationship with a brand and mobile plays a very important role.

“Mobile is also very personal,” Mr. Campbell said. “The second you stray away from personalization a consumer’s blood pressure rises.

“The only way to successfully use mobile is to understand your customer,” he said. “Loyalty and CRM data is imperative so companies can make sure they’re talking to customers as individuals rather than audiences.”

Final Take
Rimma Kats is associate editor on Mobile Commerce Daily, New York