Paul Tomes
Jun 11, 2013

It's time to take the leap into mobile wallets

With both Apple and Samsung including mobile-wallet apps in their devices, marketers need to stop hesitating and start reaping the benefits of closed-loop mobile marketing.

Paul Tomes
Paul Tomes

It is one of the cardinal rules of marketing: savvy brand managers have always preached the importance of knowing and understanding your target customer. They often pay significant amounts of money to research firms to create customer profiles, figuring out what age their ideal product-purchasers are, where they live, what they love and what they hate. This precious information is used to craft targeted marketing campaigns that are going to make a positive impact on the customer in the right place, at the right time, in the right way.  

But such research really only serves to get one’s foot in the proverbial door. Once sales begin to pick up, marketers can start collecting real information, about real life customers, and use this to adapt their campaigns accordingly, even tweaking them according to the preferences of key influencers. In theory.

In reality, as the buying landscape and consumer culture has changed, many marketers are struggling to keep up with the new rules of the road. On one hand, traditional methods of engaging with customers can be very one-dimensional. Take loyalty card schemes for example. These were designed to foster increasing engagement with a brand. But how many marketers know how loyal their loyalty card holders really are?

A marketer can tell how many cards are distributed and, if the method of feedback from a store is sophisticated enough, possibly how many times they are used. The marketer cannot tell, from a paper coupon, exactly when the customer was in the store, or how many times the customer came in to browse without making any purchases.

On the flip side, marketers are also suffering from data deluge. Many have spent the past five, 10 or more years growing social communities on platforms such as Facebook and Twitter. Increasingly powerful analytics tools on these sites can provide them with a huge amount of demographic data about their fans. But is this information really being used effectively to better engage with the consumer?

For years marketers have talked at length about the huge potential of mobile technology, particularly the mobile wallet. Mobile wallets can not only help brands create deeper connections with customers, no matter where they are, but also serve up a treasure trove of information, feeding back real-time data for marketers to analysed and use. The mobile wallet revolution is opening up access to seriously useful data—not just on customer demographics, but critically, behavioural patterns. This data is valuable because it’s based on actual customer activity, rather than guesswork as to what a ‘typical’ 25- to 30-year-old female might do, for example.

Although some marketers may feel that the last thing they want to deal with is more data, customers’ behaviour on their mobile devices is far more constructive than the information marketers may have had in the past. It offers real insight into how and when people are making purchases or interacting with a brand. Unlike social media data alone, which can be superficial, mobile feedback highlights true preferences and accurate behaviour patterns. For example, someone could easily lie about their age on Facebook, or ‘like’ a brand without really engaging, but with mobile-wallet content, marketers know for sure when someone has checked-in to a store or redeemed a mobile coupon.

I firmly believe that we’re at the tipping point for mobile marketing right now due to technology advances from the major handset manufacturers. Last year, Apple announced the launch of a mobile wallet application called Passbook, a native iPhone app that cannot be deleted from the consumer’s device. Samsung was quick to follow, unveiling its built-in mobile wallet app, Samsung Wallet, at Mobile World Congress this year. This move by the two device giants automatically puts the mobile wallet into the hands and pockets of hundreds of millions of people worldwide.

The technology is there. As a next step, brands need to stop speculating and start jumping into their customers’ mobile wallets. The way in which customers use their mobiles to interact with a company reveals much more about what they like, when and where they choose to interact with brands, how often and for what reasons. This information can be fed back to marketers in real time, helping to deliver significant ROI on marketing campaigns.

If a brand chooses to roll out a mobile loyalty-card scheme, the brand can see which special offers are being redeemed, on what devices, in which stores and at which times of day. To cite a client example, Subway launched a campaign encouraging Hong Kong customers to download a mobile coupon to their phones via a link sent out with an eDM. The marketing team saw 10,000 passes issued in just 24 hours.

The beauty of these mobile passes lies in closed loop marketing: Subway was able to see precisely when people were redeeming coupons, in which stores, and during which promotions, which enabled them to determine the best time to issue the next offer, pushed directly to this ‘perpetual coupon’ living in their customers’ mobile wallets. Unlike traditional paper coupons, using mobiles passes enabled the brand to respond to general trends,as well as individual habits and preferences, in an instant. And, once the coupon had been slotted into the device, the brand could even reduce advertising spend.

The mobile wallet is not only for global organisations. Many types of businesses, from one-man-bands to MNCs, understand the significance of mobile, but have been slow to embrace the platform as a marketing channel due to lack of technical experience, lack of resources and lack of budget. This is compounded by the fact that many brands have developed a misconception that mobile marketing must involve creating an app. These are costly to develop and extremely time-consuming to build and manage. They also need to be very useful or updated with fresh information regularly to stop users from hitting the uninstall button.

Luckily, there is more to mobile marketing than app development, particularly now that technology experts like Apple and Samsung have already done a lot of the hard work on everyone’s behalf by building these native mobile-wallet apps. More consumers are choosing to accept and use digital versus paper coupons, not just because they’re convenient to use and share, but because they can connect with a company in an unobtrusive way, staying connected to brands on their own terms.

For marketers, to have a little piece of the brand inside someone’s mobile is significantly more rewarding than playing a numbers game—handing out 100,000 paper coupons in the street for just 100 people to put it in their pocket and only 10 to use, and with no chance of getting back in touch with that person ever again.

The proof, as they say, is in the pudding. We’re seeing some awesome examples of smaller, innovative firms around Asia embracing the mobile wallet as a way to connect with people and grow sales. If you'll allow me to share another client example, take Frenz Frenzy, a small bar in Osaka, Japan. Knowing that its customers were loyal and tech savvy, the bar decided to create a convenient 'super pass' for their regulars. Consumers simply scan a QR code in the bar to save the mobile pass into the mobile wallet within their iPhone or Android phone. Pass holders can then use the mobile coupon for many things, including paying for drinks at the bar using credit added to the pass, collecting loyalty points every time they topped up, and using the pass as an entry ticket to exclusive events. In fact, when the owner recently sent out an event invitation via the pass, 106 guests turned up out of 107 invitations distributed. Cash flow has also improved significantly due to customers topping up credit on their passes in advance, and using this to pay for drinks straight from their mobile wallets.

We’re hearing a lot of buzz from people in the industry who are saying that the mobile revolution has arrived. This is just a taste of how some companies are already using mobile marketing to drive sales and foster deeper connections with people, through an intensely personal piece of technology. By truly understanding your audience’s behaviour and using that knowledge to engage with them in a way and at a time when they are most receptive, marketers can achieve significantly higher return on investment from their campaigns. Combine mobile with the massive pools of scalable, on-demand and low-cost computing resource offered by the cloud, plus the in-depth demographic data offered by social networks, and you can start to see precisely why the small computer in our pockets today is even more powerful than the computers that got men to the moon.

Paul Tomes is the CEO and co-founder of Hong Kong-based PassKit.

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