Passbook 101

Customers want deals. Companies want data. Fueling this exchange are coupons and loyalty cards, which have been cumbersome to manage – all those slips of paper, expiration dates, and plastic tags. It wasn’t hard to imagine a future where it all went digital and resided on our phones.

Why aren’t we there yet? The same issues that cripple NFC payments are present: too many competing interests and interoperability challenges. Who owns the customer, or, more importantly, who gets the customer data? Enter Passbook, the foundation on which this transformation will be built.

It’s not without its flaws, and the first is understanding how in the heck to use it. So let’s start there.

The initial screen in Passbook shows icons for boarding passes, tickets, store cards, and coupons. But the only option is to go to the App Store. Huh? If you have a device older than the iPhone 5, your first click to the App Store resulted in an error, which has subsequently been fixed, but surely caused some portion of users to abandon Passbook and never go back.

Once the App Store link was fixed, the user was still confused. Now I go to the App Store? But…I want to add my loyalty cards? What’s not at all clear is that you need to download a company’s app, register, get to your loyalty or coupon barcode, and then add to your

A continued fail for phones older than the iPhone 5: when you get to the App Store, there are hundreds of apps that have nothing to do with Passbook, such as games and other Passbook coupon creators and coupon wallets. Once you have downloaded one item to Passbook, the navigation to the App Store disappears, along with any navigation or usage clues.

Assuming you have overcome all the obstacles to adding things to your Passbook, it is now a frictionless experience. There, at a touch, are your loyalty cards, coupons, and tickets. No longer will you pass time in the airport security line on your phone and then have to frantically relocate your mobile boarding pass, or sort through your pile o’ plastic cards to get your loyalty points.

Big benefits accrue on the B side of the B to C equation as well. To be in Passbook, users must download your app. Ideally, in this process, they will also accept push notifications, so you can let them know of special offers, coupons about to expire, etc. The user will provide you with the information to connect the dots and, depending on permissions, identify them in physical as well as online environments. Best of all, you own this data, not Apple, nor Google. You are on your way to marketing nirvana: relevant, timely, channel-agnostic information and experiences.

Yes, there are many who will tell you that loyalty programs don’t work; that you’re giving discounts to loyal customers who would shop with you regardless. To these people I say, “Really? A strong affinity for a brand makes a great offer unnecessary? You can drive traffic and purchase equally well without offers for loyal customers? Prove it.”

Economic challenges and digitization have changed the face of the deal seeker. As reports, “…the face of couponing is looking younger, more affluent and tech savvy.” Households with incomes of $105,000 are twice as likely to print digital coupons as those earning under $35,000. College degree-holders are twice as likely to use coupons as those who didn’t graduate from high school.

But wait, as they say, there’s more. What would you give to drive an additional 87,000 downloads of your app in a week? Sephora and partner Branding Brand were “really impressed by the initial response, and the numbers continue to surprise us.”

App downloads, new digital messaging channels, checkout ease, coupon and reward redemption, and tracking. Benefits abound for both the company and the consumer. Marketers need to capture big data and eliminate friction on small screens. Passbook is the first step in a significant new direction. What steps are you taking?

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