Sunday, April 11, 2010

The Falsehood behind Mobile Marketing Loyalty Programs



I have railed against Mobile Loyalty programs that after the initial sign up are really just push advertising to your phone. My specific beef has been that once you sign up for enough of these they pretty much all become spam, kind of what email is today. And in my opinion truly powerful mobile marketing is initiated by the consumer with a call to action, then an action taken. passively receiving notifications and offers is not powerful.

But my beef here is terminology. A true loyalty program earns points, or tracks your spending, like frequent flier or your super market club card. Other great ones are the business card size punch cards for buying a number of coffees or sandwiches you eventually get one free. Or even the drink buy backs at your favorite bar.

Most SMS Loyalty Programs I read about in the Advertising Trade Pubs start with a Call to Action SMS Text to get a coupon and then be entered into the loyalty program. The programs state 'to receive special offers in the future sent to your phone' vs 'once you spend X amount we will send a special payback to your phone'. But if I push offers to your phone unless there is a method to track your customer's spending with you, its not a loyalty program. If I get coupons sent via SMS saying we appreciate your business without having to buy more stuff to earn it, where is the loyalty? Isn't that just a give me your phone number and I will text coupons to your phone program?

Furthermore, if a customer who has your business in their regular rotation, unless there is an incentive for them to increase their spend and their patronage, you need to remove the loyalty title and just call it a coupon campaign. And if people expect to always have a coupon or discount every time they show up, your list pricing will stop being looked at as 'the price' vs the 'discounted price'. That can be deflationary to your revenues.

For example if I always discount my chicken wings from $7.99 to $5.99 your view eventually will be your buying a $5.99 product. And expect $5.99 quality vs $7.99 quality.

So unless your running a true loyalty program, call it a creative discount program. Make your special offers unique to draw them in. Make the customer think this won't be around next week, vs. knowing like clockwork the same discount will be showing up in their in box every 3rd Monday of the month.


2 comments:

  1. Amen! You have it right here and the current flock of "mobile loyalty" are in fact discount programs with little glue to keep customers engaged. There is a lot of room in the way "loyalty" is used as I wrote recently on Loyalty Truth about "Has Loyalty become a bad word".

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  2. Howie at Sky Pulse MediaApril 13, 2010 at 5:58 AM

    We have very bad role models since Advertising/Branding and definitely Politics like to hijack words away from their true definitions.

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