Brands Underestimate the Power of Mobile Crediting

Press release – October 31, 2011

By Andrew Darling, OpenMarket for Fourth Source

This year nearly 20 million UK consumers will use their mobiles to purchase physical goods and services. As smartphone adoption passes more than half of all handsets, mCommerce has become less about mobility and all about convenience; these days, it’s usually quicker and simpler to use your mobile than to use a PC But despite all the buzz around mobile payments, mobile wallets, NFC and mCommerce in general, many brands have still not realised the size of the opportunity that mobiles present not just to engage with consumers, but to generate real business. It seems almost inconceivable in today’s mobile-centric world, only 20% of the UK’s top retailers have even a basic, mobile optimised version of their website.

The missing opportunity here is not simply lost sales, but also the issue of trust and brand engagement via mobile. In the minds of consumers, interacting with a brand should be the same regardless of how they do it, so a poor mobile experience could have a much broader impact on how someone might view that brand in the future. This means that whether or not they realise it, brands need to build loyalty and engagement with their consumers through their mobile channels and also foster long-term trust in mobile transactions.

The positive in all this is that our research shows that mobile crediting give brands a low-cost mechanism to achieve just this. By rewarding and incentivising customers with mobile credit (anything up to £10 cross-network but higher values on some networks), brands have the opportunity to create different kind of dialogue with their customers, building a relationship based on positive perceptions and goodwill. Mobile crediting is a simple way for brands via operators to reward customer loyalty and interaction, instantly crediting customers either by an SMS code that’s redeemable in-store, as free credit for pay-as-you-go customers, or as credit added to a monthly mobile bill for customers on contract.

In our study, 62% of consumers surveyed by analyst mobileSQUARED, for OpenMarket said that they would either buy or would be more likely to buy a product offering mobile credits. While 21% said they would view the brand more favourably in the future.

Our research also highlights an interesting split between men and women’s attitude towards mobile crediting. While men were more likely to be immediately receptive to promotions driven by mobile crediting incentives, women were more likely to recommend products to their friends and opt-in for longer term engagement in the future. In fact, if used effectively, mobile crediting opens up a whole new set of opportunities for building opted-in databases of users who actually want to engage with the brand.

Brands like Coca Cola have always been quick to realise the benefits of creating this long term relationship with their consumer base. As one of the early adopters of mobile crediting to drive product promotions, Coca Cola have effectively used unique redemption codes on cans to build a database of consumers willing to engage with the brand in the long term. This goes beyond just simply creating a list of opt-in customers and driving sales. As smart phone penetration increases, campaigns led by mobile crediting are also completely measurable and can provide brands with some unique customer insight. Working with the operators, brands can measure the frequency of consumer interaction and assess geographical hotspots, as well as create in-store promotions based on what’s happening with their mobile sites. It opens up many opportunities for brands to be creative, and to react quickly to trends and changes in consumer habits, and also to deliver really valuable information and feedback to a brand whenever they need it. Much as brands have embraced social media as a way to reach consumers in a much less formal way, mobile offers a way to make these conversations even more personal, relevant and timely. And of course, this wealth of information can in turn help steer sales forecasts, decisions on stock distribution and where to spend that marketing budget.

It’s difficult to overstate how the instant gratification that mobile rewards, delivered directly into the hands of a customer, can be a powerful tool for marketeers. It does more than just create a goodwill channel for long term engagement and loyalty: it is an opportunity to build that trust with consumers as mCommerce increasingly defines the retail space. If there is an element of hesitancy among some consumers to purchase items using their handset, mobile crediting is a first step in demonstrating the simplicity and security of these transactions and for brands to reward this loyalty and engagement.