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Getting Started With Mobile Coupons: An Overview

March 2, 2014 - Mobile, VMBC - , ,

For all of the very real advantages offered by the mobile platform, mobile-specific couponing seems to be an area that is still posing significant obstacles for many retailers. The challenge, as we see it, is the ability to fuse the three distinct elements of a great mobile coupon promotion – the Strategy, the Offer and Fulfillment – without “skimping” on any of them.

The following looks at ways to get your feet wet with an initial mobile coupon test program.

Promotional & Test Strategy

As with any other marketing program, nothing can happen without a fully-realized strategy. Especially for an initial test, you will need to define test structure, success metrics and, most critically, paths to scaling up the test into an ongoing couponing strategy. A successful test doesn’t do a lot of good if it can’t be replicated on a mass scale.

Before you start, identify exactly why you are couponing at all: a short-term sales spike; trial for a specific product; cross-promotion; database growth; or something else entirely. Each of these will demand a different incentive and the basics of structuring your promotion don’t change just because you’re delivering by mobile.

Out of your objectives come your test metrics. As with any test, there can only be a very small set of things you are looking to study, and by which you will gauge “success.” Define these and do not lose sight of them. Once a test is in motion, there can be a desire to continue to add new facets: if you’re testing something, you should be testing everything. The problem is, each new metric requires an additional message to deliver or customer action to quantify. Pretty soon, by attempting to learn everything, you’ve learned nothing.

Finally, make sure your strategy clearly addresses coupon delivery. Most mobile coupons require SMS or MMS for delivery. As such, they are governed by the same regulations and best practices that any messaging effort must follow. This includes documenting customer opt-in, clearly offering opt-out and noting any additional charges a customer might incur.

Offers and Timing
The fundamental advantage of the mobile coupon lies in its instant, location-driven nature and its ability to deliver a promotional nudge right now, while your customer is standing right here.

As such, offers should be designed to drive instant, impulse purchase. We have found that in-store is far and away the most effective place to drive requests for mobile coupons. It’s the place where any offer of a discount has its highest perceived value. The further you move from the register, the higher greater the offer must be to achieve the same response rates.

There are obviously a wide array of possible coupon offer types and an equally wide set of ways to trigger a coupon. If your goal is building your database, you’ll want to ensure that the call-to-action requires entering a phone number, either on a mobile web page or via a short code, to generate the coupon. Conversely, you may want to drive a behavior by an existing customer segment, which will allow you to work from your current database.

Again, our experience tells us that the single most critical aspect of any mobile marketing program is the continuous building and engagement of your mobile database. Couponing has proven to be the most effective means of achieving this. Equally important is defining coupon timing and expiration. The traditional coupon will have a set shelf life, designed to drive instant action, trigger a next visit or validate your value proposition. Target is currently testing a set of instant offers, allowing them to refine their already-rich mobile program and sustain a conversation with their most engaged mobile customers.

The ability to present your customers with this sort of ongoing “proof” of the value of their relationship with you is at the heart of the mobile coupon’s potential.

Fulfillment
The final and possibly most critical aspect of planning your mobile coupon promotion is ensuring that you can deliver on fulfillment with a minimum of effort on the customer’s part.

For a mobile coupon program to be effective – to generate redemption and while increasing customer satisfaction– it has to mimic the simplicity of traditional coupon redemption. Which is to say, it can require no more of the customer than simply “handing” the coupon to the cashier. From a fulfillment perspective, this raises two issues. First, what is the format of the coupons you are issuing? And second, are you equipped to read coupons at check-out?

The other critical aspect of fulfillment is to ensure that test fulfillment exactly mimics how you’ll fulfill once you roll out the program on a mass scale. A barcode-driven coupon is the ideal standard, allowing tracking on an individual level. However, especially in a test format, your equipment may not read barcodes on mobile devices.

Based on the level of sophistication of your coupon readers, it’s easy enough to design a coupon that has a simple redemption code, something that can be input manually at check-out. However, this dramatically reduces the amount of data you’ll capture and, consequently, the amount of learning you can pull from the test. (It also requires that much more time for each transaction.)

We believe that the traditional retail checkout is due for a massive overhaul, with mobile-friendly scanners being just one technology that will soon be ubiquitous. (See our recent blog post series on Near-Field Communications for another example.)

Nevertheless, with almost no upfront investment, you can be launching a mobile coupon program right now that will speak to your best customers while bringing new prospects into the brand every day.

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