Friday, March 30, 2012

Mobile Loyalty Programs

Will mobile devices become the digital wallet of choice? Their always-with-me reality opens the door for this possibility for many consumers. Google, PayPal, American Express, MasterCard and many many others are pouring lots and lots of money into R&D for mobile payments.

But take a look at what's in your wallet. There's more in there than just money and credit cards, right?

Let's take loyalty cards for example. I've actually got quite a few loyalty cards and fobs in my own wallet from my local coffee shop (No, it's not Starbuck's), my local location of a national grocery store chain, and my favorite Lao-Thai restaurant.



New companies like Key Ring Technologies and CardStar are jumping in with services that let you store all your paper and plastic loyalty cards all within their branded mobile apps. You can also sign up for additional loyalty programs with brands they've partnered with - all directly from within their mobile apps.

I like the idea of consolidating all my paper and plastic loyalty cards onto my smartphone. This concept is truly bringing my smartphone one step closer to becoming my digital wallet.

But I must confess that there is one thing that bothers me about Key Ring's, CardStar's, and other similar companies' approaches. These all follow the Groupon and Living Social business model by acting as merchant aggregators. Being a marketer myself, I don't like the idea of Key Ring or CardStar or anyone else owning the relationship between me and my customer. I want to own the relationship top to bottom. Hey - Apple doesn't have a problem with this approach and neither do I.

That's why I personally am leaning more towards offerings from Punchd and In2Loyalty. Both of these companies position their products directly to the merchants - not to the consumers. This means that by using Punchd or In2Loyalty, I'm the one offering the mobile loyalty program and I get to totally own the branding and the relationship with my customers.

Both provide a self-service SaaS web application that lets merchants create and manage their mobile loyalty programs so I get direct control over my program.

The way that Punchd works is the merchant creates his own loyalty program using their web application and prints out his 2D code on a big cardboard sign. Customers are supposed to download the Punchd-branded smartphone app which includes a 2D code reader and a listing of all the other nearby Punchd-affiliated merchants. When the customers come into the store, they use the Punchd smartphone app to scan the 2D code printed on the sign that the barista brings out from behind the counter for them to scan. Voila! Their loyalty cards are then automatically punched.


My favorite is actually Australia-based start up In2Loyalty. Like Punchd, their offering is a self-service application that merchants use to create and manage their own mobile loyalty program. The main difference with their approach is who does the 2D code scanning. In the case of Punchd, customers have to install the Punchd-branded mobile app and then scan the 2D code in order for their mobile loyalty cards to get stamped. In the case of In2Loyalty, the merchant does the scanning - an approach that I personally like better. Not everyone wants to download yet another mobile app. In contrast, people are more comfortable visiting mobile web sites.

So here's how In2Loyalty works: merchants use In2Loyalty's self-service application to create their own branded mobile mini-site complete with color scheme and logos. Here's where I upload my product offering, the locations of all my stores, a Facebook/Twitter/Google+ feed (nice touch!), and the details of my loyalty program - including customizing what the stamps on the mobile loyalty card will look like.

The entire mobile mini-site is my branded experience; there's no mention of In2Loyalty at all - with the exception of the URL of the mini-site (which probably could be completely branded if I ask them nicely enough). It's all about owning the relationship with the customer. Am I paranoid because I insist on owning the relationship with my customers? I don't think so. Again. Ask Apple. Who do they want owning the relationship with their customers: them or Best Buy? You get my drift.

As the customer, I just go to the mini-site in my mobile browser and register for the loyalty program. I can create my own login ID in the customized login screen, or I can register by linking my In2Loyalty account with my Facebook, Twitter, or Google+ identity. Once I've created my account, all I have to do is bookmark the web site. Both iOS and Android smartphones let me save website bookmarks directly to my home screen for easy reach. I don't have to install yet another smartphone app. When I go into the store, all I do is open the mobile mini-site in my mobile browser and show my personalized 2D code to the barista behind the counter.


As the merchant, I've already downloaded the In2Loyalty-branded Android app with the built-in 2D code reader. (iPhone app coming soon? Unknown as of this writing.) So all I have to do is scan the 2D codes that my customers show me on their smartphones. Voila! Their loyalty cards are then automatically punched.

For something as simple as a mobile loyalty program, I prefer the mobile web approach over the mobile app. Why? Because it's quicker and cheaper than a mobile app. I'm willing to sacrifice the richer user experience of a mobile app in favor of the simplicity of a mobile mini-site. For example, if I add a new location to my coffee shop chain, all I have to do is update the mini-site using the SaaS web application. In contrast, a mobile app requires that I update the app ($$cha-ching$$), post the update on the app store and hope that my customers download the app update.

In general, if richness of user-engagement is more important, then a mobile app is the preferred choice. If timeliness and freshness of content is more important, then the mobile web is the preferred choice. Remember: it's not an either-or decision. The mobile web and the mobile app can and should compliment each other - as in the case of In2Loyalty's offering.

All four of these companies that I mention here are doing the mobile eco-system a tremendous service by advancing the usefullness and opportunities of mobile devices for commerce. I like what all of them are doing and I do have my personal favorite. You may have your personal preference and I welcome your feedback to this blog post.

Now, if my driver's license can be stored on my smartphone then THAT'S when I seriously start thinking about my smartphone becoming my true digital wallet. But that's another story for another time ...

3 comments:

  1. noticed in2loyalty.com was just named in the smart100. http://anthillonline.com/in2loyalty-mobile-loyalty-card-smart-100/ looks like you are onto something Manny.

    ReplyDelete
  2. I truly like to reading your post. Thank you so much for taking the time to share such a nice information. I'll definitely add this great post in my article section.
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  3. I think use of mobile is better as it`s easy to get it in every country of world....

    ReplyDelete