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Building Loyalty Via Mobile Devices

  |  April 20, 2006   |  Comments

Creating relevant and timely loyalty programs on the mobile platform is easier (and cheaper) than you might think.

A few terms to define before starting this week's column on relationship and loyalty marketing.

Wikipedia defines relationship marketing as a form of marketing that evolved from direct response marketing in which emphasis is placed on building longer term relationships with customers rather than on individual transactions. Relationship marketing involves understanding the customers' needs as they go through their life cycles while emphasizing a broad range of services to existing customers as they need them. Loyalty marketing programs, on the other hand, are designed to increase customer satisfaction and retention through communications-based loyalty and rewards programs.

So what do relationship and loyalty marketing mean to the mobile world? Bottom line, it's about extending your relationship with your consumer and ensuring they receive increasing value from your brand. Loyalty programs are just one opportunity.

I'll start with a cool example of relationship marketing from Sprint Nextel and the Luxor Hotel in Las Vegas for a soon-too-launch campaign. The Luxor Hotel recently trialed a program together with Sprint Nextel. It emphasizes the opportunity to extend the relationship with the consumer.

When a guest made a reservation at the Luxor, they were asked if they wanted to opt-in to receive automatic check-in when they arrived in Las Vegas. Then, using location services, the consumer received a text message when they arrived in the Las Vegas city limits prompting them for automatic check-in via their mobile device. For those who haven't traveled to Las Vegas, the queues for check-in are often enormous. This new service enabled the consumer to bypass the check-in lines when they arrived at the hotel. The Luxor immediately began to establish a stronger relationship and tie with its consumers. But that's only the beginning...

According to John Styers, director of data communications for Sprint Nextel, this is one step in building and establishing a strong relationship with the consumer. Imagine placing a 'geofence' around the hotel which told you, the hotel owner, when guests were in and out of your facility. Imagine being able to push messages to guests (once they had opted in, of course) to get them back to your hotel with discounts, rewards or other loyalty incentives. And for the brand, imagine being able to target your guest base if seats are left in your venue and you're looking to fill them? Talk about relationship marketing! That's giving your consumers what they want, when they need it.

Once you've reinforced the relationship, you can continue to build and solidify that relationship with loyalty incentives. Sticking to the Vegas theme with Sprint Nextel, I saw another cool mobile application involving the Las Vegas Monorail and mobile ticketing. The monorail application moves away from paper tickets, using a mobile's unique phone ID as the identifier. What's great about this application is that the 2D bar code used for the e-ticketing application can also be applied and utilized for other applications. Styers says the mobile ticketing application provides a great opportunity for the repeat consumer to benefit from loyalty programs, but it also provides the brand with the opportunity to track the number of times that consumers use the various coupon and information functionalities offered through the service.

MobileLime, a Boston-based company, is taking the concept of loyalty a step further with its Mobile Wallet product. Mobile Wallet allows consumers to pay, get rewards, and redeem coupons using their mobile device. Using NFC (Near Field Communication) technology consumers are able to access the application, select a credit card and wave their device over the reader at the point of sale system during checkout. But integration into the retailer's point-of-sale system at isn't mandatory. Companies like Sprint Nextel and MobileLime encourage the use of the mobile number as the unique identifier for consumers to earn rewards, while allowing the brands to build and extended and personalize relationship with their customers. Mobile provides an immediate opportunity to expand the relationship with the consumer with no costly upgrades to point-of-sale systems.

Once consumers opt-in to participate in a loyalty program, they can elect to receive weekly emails and relevant text messages on their cell phone that contain exclusive information about alerts, specials, member incentives, and so on. Alerts also allows the retailer to communicate store specific information. During a snowstorm, for example, retailers can send notifications regarding whether or not their store is open.

Robert Wesley, president and CEO of MobileLime, says the benefits to both the brands and consumers are clear. With 75 percent of all households engaged in a loyalty program, an extension to mobile is obvious. What's critical, says Wesley, is that you need to use the phone in the right way and create a 1-to-1 relationship with the consumer. And while there may be a perceived issue with point-of-sale integration, it's really not required right out of the gate.

Mobile provides the best opportunity to establish a trusted, timely relationship with your customers. Once you have that relationship, extend through the use of mobile rewards and loyalty programs that keep your consumer with you and your brand.

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Laura Marriott Laura Marriott is executive director of the Mobile Marketing Association (MMA), which works to clear obstacles to market development, to establish standards and best practices for sustainable growth, and to evangelize the mobile channel for use by brands and third-party content providers. The MMA has over 250 members worldwide, representing over 16 countries. Laura has over 14 years' experience in the high-tech industry. Prior to joining the MMA, she served as Intrado's director of marketing, where she was responsible for the development and delivery of Intrado's mobility products and service. Laura previously served as director of business development at Cyneta Networks and Cell-Loc Inc.

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