Building customer loyalty in the mobile era

The world is arguably undergoing one of the greatest media transformations in history. While the internet has been an evolutionary and revolutionary step, thanks largely to Apple, the mobile device has turned into a personal computer in the consumer's pocket - and one which is always available and always turned on - offering marketers a whole new gateway to new and stronger customer relationships.

Anytime, anywhere

Consumers live a mobile lifestyle, fuelled by the nearly ubiquitous penetration of messaging devices. You can't escape it. Video screens are talking to you in the elevator, when pumping petrol or riding in a city taxi. How we consume media has fundamentally changed.  Marketers have been treading slowly into the mobile pool. But we are at a point where it is critical to engage customers via the mobile device, creating whole new ways to experience your loyalty programme and enhance its value.

The number of global mobile subscribers is now at least double the number of global internet users and, as mobile internet usage penetration increases, these figures are starting to converge. In Western Europe and North America, the market has already hit a 3G penetration inflection point (3G being the technology backbone upon which smart phones operate). As such, the mobile era has truly arrived. The key question, then, becomes whether or not marketers can risk others solidifying customer relationships, or should they do it themselves?

World demographics are also rapidly changing. In East Asia, up to 60% of some country's populations are under the age of 30. In the US, the second fastest growing age segment is under 35. Much of the online usage changes we are witnessing are being driven by the younger generation (for example, Twitter, Hulu, Shop Savvy, and FourSquare). This demographic is also the most mobile savvy. On Facebook alone, there are more than 65 million active mobile users. This is a testament to the power of the mobile channel. But no one in the loyalty arena has yet locked in their relationship with this up-and-coming, mobile-savvy demographic.  This is clearly an opportunity for loyalty practitioners.

Plan your approach

So, in venturing into the mobile realm, it is critical not to have your mobile strategy dictated by the technology itself. Many mobile strategies go astray as companies do not fully understand how their customers use their mobile devices, instead adopting tactics merely because they want to be first, because their competitors are active in the space, or because it is seen as being 'trendy' - rather choose a strategy and tactics that support your business goal of solidifying customer relationships.

This can be illustrated in the banking sector in the UK; whilst NatWest took the first mover advantage in 2009 by launching an app, it was not until 2011 when First Direct launched their app which made mobile banking truly transactional and provided the functionality and engagement that customers desired. 

It is not a case of "if you build it, they will come".  Unfortunately many brands in today's environment have fallen down this 'me too' trap, and therefore mobile applications that are developed lack the engagement factor and drive greater revenues by ultimately enabling mCommerce. For example many brands have developed brochure applications which showcase products and essentially replicate a product catalogue to a mobile device, show product videos or other image galleries, but they offer little scope for interaction.  Several luxury brand retailers have followed this route such as D&G, Hugo Boss and Ralph Lauren who have displayed fashion collections but offer limited functionality for customers to interact and drive purchase behaviour.

Meeting customer expectations

Customers need and expect value, more so than at any other time in the past. They also expect real-time news, updates and personalisation.  As such, any mobile applications developed for a loyalty programme should, at the very least, address these consumer expectations.

Carlson Hotels, which owns the Radisson, Park Inn and Park Plaza brands, recently launched their new Club Carlson loyalty programme mobile app. The app features express booking for all Carlson hotels, personalisation options, GPS mapping and the ability to redeem loyalty points.  It also links to "Explore Destinations," a best-in-class feature that stores more than 4.4 million points of interest, from local restaurants to tourist attractions.

Beyond this and to be successful, marketers will have to rely more on their instincts based on intimate customer understanding. Whilst research can be helpful, it has to be acknowledged that it is unlikely to provide all of the answers as it difficult to explore customers' imagination and know what is best for them.  In the words of Henry Ford "If I'd asked customers what they wanted, they'd have said a faster horse". 

The marketer's job actually lies in integrating the mobile channel into the evolving customer experience in a way which delivers functionality, engagement and meets expectations. We are in an era of transformation - both economically and technologically - and the mobile is exactly the vehicle we need to create more frequent interaction and solidify our valuable customer relationships.