Gold Mobile: Strategies for Driving App ROI

April 1st, 2013

Introduction

            As smartphones become the norm among Americans,^[1] consumers are increasingly turning to their mobile phones before making purchases. A recent survey of 2,000 smartphone owners found that 71% of respondents had used their phone to research products before making a purchase, additionally 42% had responded that they found better prices elsewhere, 19% were looking for coupons, and 16% were looking for location based offers.[2]Though more than half of adult mobile phone owners use those phones to make purchasing decisions, many consumers are frustrated with spam text messages and unwanted sales and marketing calls^[3]. The right mobile experience can meet consumers with sales and marketing messages they choose to receive, when and where they want them.

            From small retail chains to international banks, companies are making mobile a centerpiece of their marketing strategies. This goes beyond a mobile optimized website; sizable organizations in the B2C sector are expected to have a mobile app, and companies spend a considerable amount of time and money developing and launching mobile apps. At least one in four retailers has a mobile app[4], and companies are expected to allocate a total of $8.2 billion dollars to mobile by 2016[5].

            However, there is not always a clear relationship between branded mobile apps, marketing goals and the bottom line. As with any new marketing tactic, many companies have an unclear vision of how mcommerce and mobile marketing serves the consumer and company in the long-term. But based on consumers’ digital behavior, marketers are taking a risk by not making use of branded apps for their companies or clients.

            There are mcommerce and mobile marketing strategies that can increase a company’s return on investment, while providing valuable insights into consumers’ mobile behavior. With these strategies, mobile apps can:

• Produce more sales by enabling in-the-moment transactions
• Drive customer loyalty by enabling in-the-moment rewards
• Reduce acquisition costs by providing personalized incentives through apps
• Reduce costs of owning the app by enabling advanced engagement, transactions and rewards, even without custom development
• Provide metrics from initial engagement through purchase and rewards detailing a customer’s entire lifecycle
• Complement social media campaigns by moving fans from third-party social networks into branded experiences only available within mobile apps

         This white paper will detail nine proven, alternative mobile engagement and purchase strategies that can help companies extend the reach of their mobile apps. It will also outline how mobile payment options, rewards programs and other mobile marketing and commerce tools can be added through third-party, cloud-based tools to reduce overhead.

Nine Strategies for Increasing ROI of Branded Mobile Apps

         Though the nature of these strategies vary, one principle underlies them: give the consumers a choice of where, when and how to shop, buy and engage with your brand. The success of any mobile marketing campaign must start first with an understanding of consumer behavior, specific to a company’s unique customer base. Their needs drive concise marketing goals. Finally, the type of mobile strategies chosen must relate directly to those goals.

         This is why many companies are not seeing the ROI of their branded mobile apps in the first place; they have not tied the app to a particular marketing goal. Simply having a presence in the mobile space will not produce results. One or several of the strategies below can help a company meet its mobile marketing goals, employing their apps to achieve those goals.

Mobile transactions

         In 2012, the Pew Internet and American Life project surveyed experts on Internet trends and found most believed mobile transactions should replace cash and credit cards in about a decade.[6]Mobile transactions are not yet that ubiquitous, but consumers are becoming increasingly comfortable with the idea of using their phones to make purchases.

         A branded mobile app can facilitate mobile payments to make customers buying experiences easier by avoiding long lines, automatic reloading of prepaid cards, and fewer keytags and store cards. This provides convenient, in-the-moment engagement for customers. Mobile payments can be implemented cost effectively, even reducing the cost of transaction processing. The best mobile transaction systems allow people to place orders across a range of devices and via SMS or near field communication (NFC) technology. With this cross-platform strategy, companies can track and analyze customer data in real time.

[sidebar] Mobile Transactions: College Dining

         Using NFC technology, students at a large Pennsylvania university are now able to pre-order food from their dining hall using mobile transactions. This helps the school alleviate some of the long lines that occur around peak times, and frees students from having to wait in those lines.

         Students who register for the program can participate one of two ways: with NFC enabled smartphones, or a sticker with an embedded NFC chip, which they can attach to the back of non-NFC enable phones. To order, they simply swipe their phone over special “active” posters and select their meals from the poster. The active poster then submits their order, texts a confirmation number for order pickup and notifies the kitchen staff.

         The program also offers rewards to students for participating. Coupons, prizes and meal deals encourage them to continue using the dining halls and the other on-campus shops.

         The transactions and rewards depend on a combination of mcommerce tools. The posters are powered by GoMo Tap & Go, and rewards are facilitated by the GoMo Campaign.

Prepaid accounts

         To facilitate both mobile and social transactions, companies can give app users the option of pre-loading money into their app for making purchases. That way, users have a mobile wallet stored in the cloud. Ideally, customers can prepay with a variety of options, including credit, debit, payroll or ACH transactions.

         Prepaid systems can be either open or closed loop systems. Common closed loop prepaid systems are branded gift cards and can only be used within that brand’s app or subsidiaries, as is common with large, multi-brand clothing retailers. An open loop prepaid system, also known as a companion card, is usually issued through a Visa or an American Express card-affiliated brand. This open loop system allows the consumer to redeem the card anywhere.

         Incentives for app users to adopt a prepaid mobile wallet vary depending on brand implementation, but they may include reduced wait time, avoiding bank fees or access to special products or services. For companies, prepaid customer accounts reduce the cost of transactions and may help increase order volume.

         Companies can pair open prepaid cards (also known as a companion cards) with apps. These reloadable cards function like a Visa debit card and consumers can use the card anywhere credit or debit cards are accepted. By combining the card with a rewards and incentives app the issuing company is helping the consumer to track their rewards and manage their balance. For the company, this both increases the consumer’s card balance and consumer spending within the card’s app environment. For the consumer they are receiving a reward system that is easily managed and readily available.

Rewards programs

         With the rise of mobile and social transactions, marketers are moving towards a new rewards paradigm. Historically, consumers were rewarded only for transactions, tracked using tools like plastic loyalty cards. As consumers spend more time online—particularly on their phones—it is now just as simple to reward them for actions, not just transactions. Furthermore, consumers expect brands to demonstrate loyalty to them as valued customers.

         For example, many companies tie coupon codes, sweepstakes entries and other outbound marketing rewards to social media actions. This includes following a brand on Twitter, liking a Facebook Page, sharing a YouTube video or checking into a store event through Four Square. Customers receive in-the-moment rewards, whether they are engaging from home, work or at a company’s branch or store.

         Rewards and loyalty integration with a mobile app frees customers from carrying keytags and punchcards by handling all reward point management. However, it also creates a self-managed loyalty framework, which puts the customer in control. That sense of control encourages them to share content from their favorite brands and opt-in to marketing messages.

[sidebar] Rewards and Companion Cards: EZ Referral

         Using both a cross-platform rewards program and a companion card, EZ Referral has streamlined the process of rewarding sales referrals. The EZ Referral Network allows salespeople at car dealerships to reward their friends, family and customers for referring new business. Participants receive a login and password, which they can use from a web browser or from the mobile app. Using traditional and mobile marketing collateral, participates can introduce potential referrals to the EZ Referral systems and send contact information for referrals to a salesperson. If that turns into a sale, an EZ Referral administrator will authorize a payment to the person who referred the new business to the salesperson. They receive their rewards on a companion card.

         For customers, the advantage is clear: cash rewards for simply telling someone about a positive car buying experience. However, it also streamlines the referral process for salespeople and gives them a powerful tool for promoting themselves and the dealership. At the same time, the dealership can track referral activity and easily send referral payments online.

         In its first three months of operation, at a single dealership EZ Referral signed 47 salespeople and 606 referral agents, generating 174 leads and 31 sales.

 Family commerce

         Mobile allows people to share information more easily and faster than ever before. This can be dangerous when passwords, account numbers and PINs are the bits of information shared. Family commerce tools make sharing accounts more secure while retaining simplicity, which is boon for families who share purchasing and decision-making responsibilities.

         This means including the capability for an individual to give a family member access to an app for limited uses. The primary account holder remains in control, and can also receive reporting of activities. Companies can allow this in conjunction with a branded mobile app, allowing them retain more of a family’s purchasing power. It also helps form brand loyalty in younger consumers.

         This is implemented at some universities as a means of allowing parents to have some control over their student’s spending. Students are given a card that works at university facilities and is paired with a mobile app, which parents and students can reload via a mobile app. For the school, this means money gets spent on campus. For parents, this means less money inadvertently spent on beer. And for students, this means the freedom to spend their allowance beyond the dining hall.

POS Redeemable couponing & tracking

               Though coupon codes have become just as common as paper or print-out coupons, they do not always integrate well with retail point of sale (POS) systems. Sales staff may not know how to handle the codes, and marketing departments are not able to track the codes for valuable data.

               To make the most of couponing, marketers can include in-app tools that will produce unique coupon codes tied to codes in the POS. This tracks consumer behavior from app to POS and redemption, enhancing customer profiling and segmentation. Other potential features include automated emails informing the marketing team when coupon threshold is reached or the ability to limit coupons to one per device.

Sweepstakes

               Mobile has made contests and sweepstakes more diverse tools for marketers looking to instill customer loyalty and reach new audiences. However, because of implementation risks, like laws that vary from state to state and seamless scaling, this is a cumbersome functionality to include in a branded mobile app. Third-party tools are a valuable option.

               Just as they do for Facebook contests, marketers can work with an outside company to create and manage multiple, simultaneous sweepstakes programs across app users with various prize levels. Such a program should choose winners and automate sweepstakes, which is a boon for organizations without adequate manpower to administrate large contests.

               Sports teams run sweepstakes for fans attending games. For example, throughout a game, billboards display an SMS mobile number paired with a keyword. The fans text the keyword to the mobile number for a chance to win team gear and other prizes. Sports franchises have found this increases their advertising and revenue opportunities by encouraging people to simultaneously opt-in to promotions and other marketing messages from sponsors.

Time of day content & promotions

               Consumers carry their phones with them at all times, which means there is an opportunity for marketers to provide content and promotions based on the time of day. Targeted, in-the-moment marketing is one of the biggest promises of mobile, but is sorely underutilized.

               When implemented properly, in-the-moment content and promotions can address a business’s daily and hourly shifts and variables. It allows a brand to automatically vary content and offers based on time of day with targeted, timed promotions. This catches consumers at critical decision making moments, providing the inspiration for a purchase.

               A large food services vendor utilizes time of day content and promotions to help drive traffic to corporate cafeterias before and during peak meal times. Diners opt-in to promotions through SMS keyword, QR code or on the web. Timed messages, released through SMS and/or email, offer healthy eating tips, discounts, instant win sweepstakes and frequent visitor reward reminders. This time-of-day style of promotions can change that day’s buying decisions for anyone on the messaging list.

Outbound personal messaging

         According to a Pew survey,[7]68 percent of cell owners were subjected to unwanted sales or marketing calls, and 69 percent get unwanted spam text messages. Although this may be discouraging to marketers, it highlights an opportunity for using a branded mobile app. Marketers can best reach consumers with messaging they receive how, where and when they want it.

         Preference-based messaging provides a means for app users to opt-in to automatic outbound messaging. The app then only pushes messages based on categories of interest to the app user. An effective notification and messaging strategy includes in-app messages and messages that come to the user without loading or accessing the app. Some outbound personal messaging schemes provide flexibility to choose between SMS and email; the most effective add multimedia content to messages to increase conversion and responsiveness

Developing New Features for Branded Apps

         Many marketers already recognize the value of offering consumers a more powerful mobile experience. Limited resources, time and development capabilities hold them back. A cloud-based mobile marketing suite may offer the right combination of affordability, features, ease of use and risk mitigation.

            A feature-rich cloud software tool enables a marketing team to do more with less. For example, instead of coding an entire reward system with a set of business rules, the marketing and app team can use a ready-made reward management infrastructure. This allows them to focus on improving the app user interface as it relates to the rewards program.

            This also saves money, while offering seemingly premium features. A quality mobile marketing solution will conserve marketers’ budgets by requiring less testing and enabling quicker deployment, both of which reduce the cost of going to market. Furthermore, promotions and coupons can be delivered at a low cost, since they will not have to be developed from scratch.

            The best mobile marketing tools also function as an unexpected risk management tool. They help mitigate several risks associate with app development:

• Time to market risk. Launch in less time, since the infrastructure is already built.
• Operations risk. For mobile transactions and rewards programs, there is often a lot of necessary defensive coding. By using a proven tool, developers can avoid this extra work without worrying about concomitant risks.
• Financial risk. Marketers can avoid investing too much of their budget into a single venture.
• Business risk. It is not always clear that a custom app will fully scale; with ready-made solutions, the scalability has already been determined.

Central to all of this is the mitigation of development risk, which is particularly important for marketers without access to an in-house app developer. New software development needs a lot of work, quality assurance and field testing. By using a trusted mobile marketing tool or set of tools, you avoid the brunt of this risk.

The Bottom Line

            Marketers have been quick to see the promise in mobile apps, but have not fully leveraged this tool to deliver a real ROI. In conjunction with mcommerce tools and a new loyalty paradigm, mobile apps can create more fully engaged customers and show real results for companies.

            App-managed mobile transactions, companion cards, family commerce and more reduce transaction costs and produce more sales by making it easier and safer for consumers to make purchases on their mobile devices. Rewards tied to consumer behaviors and actions, as well as time-of-day promotions and social sweepstakes, promote brand loyalty and reduce the costs of owning the app, while providing metrics that track consumer from app to POS.

            Working with cloud-based mobile marketing solutions can further drive down acquisition and operation costs. These provide tools that can enhance the effectiveness and ROI of an app, such as integrated mobile wallets and companion cards. Working with a proven tool also reduces risks related to development, testing and deployment of mobile apps.

            The question is no longer whether or not mobile will have an impact on marketing and sales, but how. Companies that fully integrate branded mobile apps with mobile transactions and rewards programs stand a chance of leading the mcommerce pack.

           
The GoMo Platform

            Gold Mobile marketing and commerce tools aredesigned to enhance mobile app ROI through advanced customer engagement and in-the-moment transactions and rewards; thereby enabling an app to become a complete “card-less” loyalty system at a small fraction of the cost to launch and maintain compared to traditional card-based loyalty systems.

            GoMo tools are delivered to our clients via a secure cloud-based administrative control panel and reporting system; enabling the delivery of in-the-moment commerce and lifestyle engagement in many industries including food service, retail and brands, financial services, and healthcare. Clients enhance their app by simply using either “off-the-shelf” configurable functions or use API/SDK for more advanced custom app implementations. Functions and Modules include:

● GoMo Rewards Wallet, a mobile transaction and rewards tool that enables customers to easily order and pay; supports prepaid/gift, credit, debit, and ACH. For those customers who do not have your app it serves as a companion system and enables transactions and rewards via SMS, mobile web or standard web.

● GoMo Tap & Go, a self-service interactive kiosk that provides consumers with a device agnostic NFC system for easy enrollment and time saving incentives, rewards, and purchasing.

● GoMo Campaign, an engagement and incentive/promotion management platform that allows administrators to create compelling in-the-moment lifestyle campaigns that build and engage your customers.

● GoMo CMS, a high-powered, yet intuitive mobile web content management system that allows even the least technical administrator to deploy and manage mobile websites; significantly reduces cost of creation and ownership. Enables creation of hundreds/thousands of location based user experiences.

● GoMo Chat, a two-way enterprise scalable SMS messaging system connecting consumers and brands for in-the-moment text conversations; enables desktop/call centers to engage with customers/patients “in-the-moment” of decision making and action; has a HIPAA secure version for healthcare.

            To find out how GoMo tools can serve your company, request a demo of our engagement and loyalty platform. Contact Jason A. Howie at [email protected].