Bringing down the barriers

David Tymm, managing director of i-movo, asks why mobile coupons have not taken off – yet.

Six years after the first mobile coupon campaigns appeared, there are 51 million mobile phones in the UK out of a population of 56 million. Everyday 81 million text messages are sent with 94 per cent of them being read. Text messaging is therefore the most-read media on offer.

With short production timescales, low set up costs and the ability to communicate with consumers at specific times of day when they are out-of-home, the mobile phone has become the narrowcast communication method of choice for advertisers who want to reach a precisely targeted market in a cost effective manner.

The mobile channel can even help measure the effectiveness of above-the-line campaigns. The often quoted Lord Leverhulmes’ observation is that he knew half his advertising budget was wasted, he just didn’t know which half. By putting a text response “call to action” in the advert, a light is pointed into this dark corner. Response rates indicate that consumers seem to like mobile marketing, with results ranging from 15 per cent to 80 per cent and over 70 per cent of consumers welcoming mobile campaigns. So, given the obvious benefits, why are major brands and retailers not using mobile to lure consumers back to the high street that, according to the doom-mongers of the business pages, will soon resemble the proverbial ghost town?

Familiarity breeds a degree of contempt. Initially, consumers overlooked the low value of text offers when they first appeared in favour of the novelty factor. A few years later, now that most consumers have participated in mobile campaigns, the value – perceived or actual -of a mobile coupon needs to be much higher in order to attract attention and drive response.

But with increased value comes increased risk. Offers may be over-redeemed if not tightly controlled and valuable consumer insight is lost unless redemption patterns are identified and understood. It is largely for this reason that the Orange Wednesday campaign is widely and justly admired. Orange phone customers can text to receive a “two for the price of one” coupon and use it on a Wednesday at any of over 250 cinemas nationwide. Each coupon is validated using dedicated terminals in the cinema when it is presented.  Everybody wins. The consumer gets real value through participation, by saving the retail price of one cinema ticket, while the real-time redemption process ensures the offer is not over-redeemed at the expense of the cinema’s revenue. This same secure redemption process ensures Orange gets invaluable consumer data that can be used to drive traffic to mobile content and services relevant to the customer.

Unfortunately, a commercial model does not yet exist to underwrite the Herculean task of installing dedicated redemption terminals the length and breadth of the UK and so this solution is unlikely to be adopted by retailers – high street or independent – where time-to-serve and space are both at a premium. If retailers want the benefits of increased footfall and greater customer intimacy demonstrated by Orange Wednesday, they clearly need a redemption solution that dovetails with their existing operations and processes.

Existing infrastructure holds the key for unlocking the potential of mobile coupons. For instance, credit and debit cards are long established with 8.3 billion card transactions taking place in the UK in 2004. The growth of payment terminals in confectioners, tobacconists and newsagents and convenience stores for Electronic Top Up of pre-paid mobile phones has extended this technology into virtually the whole of UK retail. Card payment networks are trusted, ubiquitous, and ideally suited to redemption of “promotion currency”. Similarly, broadband connected kiosks are beginning to be installed in leisure and hospitality venues across the UK to support multiple functions. Just recently, Felix Plc – owners of the ground-breaking sales promotion, “Everyone’s a Winner” – announced an agreement with Alliance & Leicester Building Society, to install 10,000 multi-function kiosks across the UK that will dispense cash, sell mobile top-ups and MP3 downloads and allow consumers to play “Everyone’s a Winner”.

Another option is Inspired Broadcast Networks’ “itbox” which has been a staple feature of pub chains such as JD Wetherspoons and Spirit. These devices offer an excellent opportunity for consumers to “self-redeem” coupons securely without involvement from serving staff.

It is existing technology infrastructure like this that offers retailers the opportunity to benefit from mobile coupons. The owners of these estates are keen to drive incremental revenue from their investments and retailers need footfall like never before. The last remaining barriers to widespread use of mobile coupons are coming down.

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