Using Cell Phones to Promote Customer Loyalty

Integrated marketing communications is warming to the mobile phone, leveraging the tool that has become a natural, if high-tech, appendage to most consumers. Companies like Mobile Lime, Cellfire and NeoMedia Mobile deliver contests, coupons and points-based rewards programs through mobile phones for brand clients.

“The mobile phone is the most intimate communication device the consumer has, and marketing through it has a conversational tone,” says Ashley Heather, co-founder of MoMeMo in New York. The extended acronym stands for Mobile Media Mondays, a networking group formed to discuss the evolving media channel and that welcomes new industry members by invitation only.

Pushing Communication, Pulling Commitment

Over time, this opt-in messaging channel will enable near one-to-one relationships. “Push marketing will get more and more targeted,” he says. Pull marketing will mature through mobile phones, too.

Nextcode of Concord, Mass., for example has developed bar code scanning software for camera phones. Consumers that have downloaded the software to their mobile phones can scan unique codes in magazines, for example, to receive more information from marketers or automatically enter themselves in a contest. Their personal data is transmitted by their handsets, eliminating the need for them to enter name, address, etc., manually on a mobile keypad or computer keyboard.

A consumer’s immediate environment will factor into messaging, too, increasing the relevancy of messages even if the shopper hasn’t entered a store.

“GPS and location-based service is not prevalent only because phones aren’t sophisticated enough,” Heather tells CRM Buyer. Even as those technologies expand in availability, mobile messaging vendors and their clients may take advantage of triangulation to determine where consumers are and send them specific offers.

For some marketers, however, a buyer’s physical location is unnecessary.

State-of-the-Art, Even Without GPS

Chevy Chase Supermarket, a single-location mom-and-pop grocery in Chevy Chase, Md., didn’t have a rewards program before this past September. The seven-register store saw an opportunity with mobile phones to catch up to competitors, even one up them, in a hurry.

“We have to show everyone that we’re still relevant and can keep up with the big guys,” says Kevin Kirsch, co-owner. “We might as well go state-of-the-art.”

Thus, after 50 years in business, the 25,000-square-foot store signed on with Mobile Lime, to launch the Chevy Chase Mobile Rewards Program. Shoppers sign up for the program online, submitting their mobile phone numbers in exchange for text messages that announce the arrival of fresh blueberries or an overrun of ice cream for sale at an impossible-to-ignore quarter per half gallon.

Time-sensitive texts sent at dinnertime are intended to increase sales of hot prepared foods, Kirsch says. Those delivered during a snowstorm will let customers know that supplies are at the ready and Chevy Chase’s doors are still open.

Mobile promotions level the playing field for Chevy Chase in building consumer loyalty, Kirsch continues. Customers still receive the same neighborly service, but Chevy Chase is able to collect personally identifiable, quantifiable data as to shoppers’ brand preferences, visit frequency, basket contents and more. Program members simply provide their mobile numbers at the checkout counter to receive special prices or other offers communicated by text message. Thirty percent of the grocer’s core shoppers participate.

Cards Identify Customers, Phones Engage Them

Often Mobile Lime’s clients augment their existing rewards programs with mobile marketing. “Plastic is a nice medium to identify relationships, but benefits and status can’t talk to you through plastic. A cell phone might be a way to do that,” says Bob Wesley, CEO of Mobile Lime.

He cites a claim that 218 million Americans use mobile phones today, many affecting more than just voice communications. “They use them to connect with important people and significant relationships,” he tells CRM Buyer. They also enable a dialogue whenever, wherever consumers make decisions. CPG (consumer packaged goods) brand choices rarely are made at the household mailbox or home PC.

Wesley acknowledges that building loyalty isn’t simply pushing consumers to buy more. It’s about nurturing a relationship. So Mobile Lime is a dialog tool. Consumers can request entree to a rewards program by text message, receive points summaries and new product information through short-message service, and provide instant feedback on shopping experience, product availability, clerk friendliness or loyalty benefits.

Record Response

Eighty percent of Broadway Marketplace’s customer base in Cambridge, Mass., receives mobile promotions and incentives toward building customer loyalty. The Mobile Lime customer regularly achieves a 24 percent response rate to personalized text messages.

Another high-frequency retailer has experimented with mobile marketing. This summer, Starbucks introduced a trivia sweepstakes campaign through which it began collecting data on marketing via wireless phones. Starbucks and others running mobile promotions and incentives don’t have enough information yet to determine if the time and channel is right to win customers’ love on the go, says Julie Ask, senior analyst at JupiterResearch.

Early results, however, show that mobile response rates top those in all other media, she tells CRM Buyer. That may be due to high value benefits such as $5 gift cards, free product and entry into lotteries for bigger prizes. However, it may also be the ubiquity of the channel and the fact that it fits into the consumer’s pocket, hand or even directly into his ear.

There is a lot going on in trying to build loyalty through the mobile medium, but the efforts certainly are not mainstream, Ask notes. “They are a really small percentage of interactive budgets. Most people aren’t aware of them.”

Ask participated in the 57-question Starbucks trivia contest in July, texting some answers to product-related questions and submitting mobile phone photos for others. Though, she says she wouldn’t have been aware of the campaign had she not read about it.