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Want to Build Customer Loyalty? Smartphones are the Secret Weapon

March 14, 2017

The devices are consumers’ constant companion. As brands compete in an increasingly demanding field, here are 3 tips for deploying smartphones in the battle for customers.

By Ken Kunz

The best way to build loyalty with consumers in 2017 is on the most personal device they own – their smartphones.

Loyalty is increasingly at the forefront of marketers’ minds, with the majority of them saying they will allocate more of their budgets to customer loyalty in 2017, according to eMarketer. This is a welcome development, and brands should make the most of this reallocation by prioritizing mobile.

Here are three ways to build mobile loyalty:

  1. Create a mobile database of subscribers. Email marketing is a go-to strategy for marketers, but it is becoming more difficult to succeed on this channel. In its latest major iOS update, Apple introduced an unsubscribe banner that lets consumers unsubscribe from emails in one tap. Google’s introduction of email tabs into Gmail several years ago tucked promotional emails away from the default inbox, reducing visibility.

To complement your email database, build a mobile database for sending text messages. SMS offers significant advantages when it comes to long-term loyalty. Text messages boast a 98% open rate and a 5% opt-out rate, and they aren’t buried in tabs because they arrive in the same application that consumers open numerous times per day to chat with friends and family.

Build your database using as many channels as possible. These include an online web form on the homepage of your website, signage at retail locations to allow customers to text a short code, and even marketing emails that encourage email subscribers to become mobile subscribers.

Vibes client Chipotle took a creative approach to growing its subscriber base last year, when it closed all its locations for lunch to cover new food safety procedures. At each storefront, it placed signage that invited customers planning on getting lunch to text a short code to receive a free burrito offer. The response was overwhelming: 5.3 million customers downloaded the coupon, and an astounding 67% redeemed it. Not every campaign needs to be of this scale to be successful, but this demonstrated that consumers are more than willing to become mobile subscribers if brands make it worth their while. 

  1. Ditch the plastic loyalty cards and go digital with mobile wallets. While some retailers have leveraged Apple Wallet and Android Pay to accept mobile payments, the real opportunity is in mobilizing loyalty programs through these mobile wallets. Data shows that making loyalty programs smartphone-accessible can have a powerful, positive impact on consumer perceptions.

On average, consumers with smartphones participate in four loyalty programs, and Vibes data shows that consumer interest in digital loyalty programs is at an all-time high. Nearly three-quarters of those enrolled in loyalty programs would be interested in saving their plastic loyalty cards in their smartphone, and notably, 70% would have a more positive opinion of a brand that allowed them to gain instant access to a loyalty program via a smartphone.

While some suggest taking the app route to build loyalty, that’s an uphill battle – 60% of consumers download two or fewer retail apps. The chances yours will be one of the select few are slim. Instead, prioritize mobile wallets, which come preloaded on most smartphones and offer a low-cost, low-friction way to secure valuable loyalty real estate on a customer’s device. 

  1. Take advantage of mobile wallet functionality to personalize the loyalty experience. Once you run your loyalty program through mobile wallet, you have access to an impressive arsenal of tools to build brand loyalty. Unlike with a plastic loyalty card, you have the ability to target based on GPS location or Bluetooth beacon – (e.g., a lock-screen notification when a customer is nearby a store with a reminder to use the reward in their mobile wallet).

There are also numerous ways to personalize the experience – developing custom creative for different member levels, such as changing the color of the card once a customer hits a higher tier, or times of the year, such as a holiday card. Apple Wallet can also serve as a messaging channel for both transactional messages (updating the customer’s loyalty balance or available rewards in real time) or marketing messages (announcing a holiday sale).

Loyalty has become an even bigger battleground for brands as they compete for consumers with increasingly higher expectations for the customer experience. Building relationships with them on the devices that serve as their constant companion is a surefire way to come out ahead of the competition.

Ken Kunz is the VP of Technology at Vibes, a mobile engagement leader. He leads all aspects of Vibes’ technology organization, including engineering, infrastructure, product, and user experience.