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Opinion Loyalty on Mobile

Business Model Alignment Can Lower The Cost of Innovation

We recently came across a well know retailer which has added mobile capabilities to its loyalty programs. But unlike many other companies, their mobile component was a very narrowly focused technology implementation.

We spoke with the CIO, who agreed to lay out the strategy but asked us not to name company. We felt the insights were so powerful that we agreed.

A broad list of options, a narrow set of chosen tactics

The retailer in question had looked at a broad range of mobile capabilities, but settled on narrowly focused implementation around mobile compatible bar codes. We were curious about such a narrow focus — but the CIO laid it out for us like this:

1. Despite the rapidly changing business environment around them, their management team was reluctant to take on technology projects with unknown ROI. So his major task was to rapidly implement a few new technologies that would demonstrate visible ROI quickly.

2. There were two major operational issues around their existing loyalty programs:

  • the ability to target timely rewards to customers when they were most receptive and likely to take action
  • a poor conversion of rate of customers who said they would ‘signup later

A balanced view

The adopted strategy reflected a balanced view of both the internal business realities and the core requirements to perfect the loyalty program. It involved a narrow implementation centered around mobile bar codes. While it seems to be a very limited use of technology, the functionality has directly addresed the most pressing operational needs of the loyalty programs.

1. Streamlining the operational part of the loyalty program to give timely and targeted loyalty related offers to members

2. Eliminating fall-off from “sign-up later” type loyalty systems — using bar code technology to make signup a breeze.

The company has keyed in on the ubiquity of phones — which are always with the customer and represent the most consistently available medium for reaching and engaging them. By extending the technology to include bar code capabilities, the company has extended the impact to include long standing loyalty programs challenges like those mentioned above.

Nov 22, 2014  

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