Start-Up Brings Retailers Aboard Mobile Coupon Bandwagon

In describing mobile couponing, visionaries used to paint a picture of an SMS message from Starbucks delivered to a consumer’s phone whenever he passed a retail outlet. So far, that vision hasn’t come to fruition. A start-up called Cellfire, which has been testing its offering for the last six months and is now going national with Cingular, hopes its solution finds more success.

The company has reason for hope, if uptake from advertisers is any indication. Cellfire has signed well-known national marketers like T.G.I. Friday’s, 1-800-Flowers.com, Hollywood Video and Carlson Travel. Coupons from those companies will now be distributed nationally. The company is also in discussions with other carriers so it can expand distribution beyond the Cingular network.

In initial testing, which took place in California, Cellfire saw redemption rates that are likely to spur optimism. The company has seen 15 to 25 percent redemption rates on coupons it hass delivered, but it won’t say how large the user base was during the testing phase.

“We’re basically going national right now so we’re really just stating to ramp up the user base,” Brent Dusing, Cellfire’s CEO, told ClickZ.

Cellfire’s system is based on a downloadable Java application, which it’s distributing via Motorola’s HelloMoto.com downloads section and Cingular’s mobile site. The program is also available on Cellfire.com, which Dusing said is being promoted via an online ad campaign. Additionally, Cingular network users can text 22888 and download the software. Some advertisers are displaying signage mentioning the short code in their retail locations. Cellfire also hopes a “tell a friend” feature helps it get installed on more handsets. Dusing says the application is compatible with 43 different phone models.

When asked whether a download and install process could be an obstacle to the solution’s adoption, Dusing argued consumers have grown accustomed to downloading ringtones and games to their phones.

Once the application is installed, consumers can browse for offers from advertisers in their area. To redeem a coupon, users show it to cashiers when making a purchase. The coupon code is entered into the point-of-sale system, so retailers are able to track conversions and give the appropriate discount. Dusing says the advertisers Cellfire is working with already have systems installed that are capable of redeeming such coupons.

“It’s very easy for retailers to do this,” said Dusing.

Dusing says pricing for advertisers varies depending on the type of program.

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