Eight Steps for Mobile Coupon Success

Mobile has been adopted more quickly than almost any other medium that has
come before it. It is the first personal mass medium. Consumers are far in front
of marketers in terms of their preference and their adoption of this technology.

“Companies that make smart mobile decisions today will have significant competitive advantage, and one of those smart decisions is mobile coupons — we’ve been seeing a tremendous uptick,” says Adam Lavine, president and chief executive officer, FunMobility, who recently presented a webinar on the topic, “Top Mobile Coupon Secrets to Retail Success.”

For example, there are 165 million smartphones in the United States, and the average consumer spends 2 hours and 21 minutes per day looking at their smartphone screen, according to eMarketer. That’s 380 million hours of consumer attention a day going to these devices. T-Mobile reports that on average, consumers will look at their phones 150 times per day, or a total of 25 billion screen views a day.

In the analog world, marketers are going to distribute over 300 billion coupons this year, according to Inmar. Consumers redeem over $4 billion worth of coupons annually, reports NCH. It’s a form of advertising and promotion and consumers love because they feel like they are getting a deal. It is a preferred form of promotion for marketers because it naturally leads to a purchase, and they can track the effectiveness of this medium, such as how many purchases were made as a result of the promotion.

Many marketers have to catch up to mobile couponing because of very high redemption rates that far surpass paper coupons. For example, only 1 out of 100 consumers who look at FSIs actually clip the coupons and use them, says Juniper Research, while there is a 10% average redemption rate for mobile coupons.

Smart marketers can count down the following eight steps to closing the gap and becoming successful with mobile coupons:

8. High value in-store mobile coupons drive basket size.
The beauty of mobile coupons is they can quickly be launched, and these in-store promotions can drive the size of a basket. A recent campaign by Ace Hardware to boost its mobile marketing program provides eye-opening results. The retailer offered $10 off a $50 purchase in an effort to drive loyalty list adoption. Among the results reported by FunMobility, which developed the program with Ace:
  • 59% clip rate: Over half of the people who looked at the offer on their phone clipped it.
  • 63% redemption rate: Of the people who clipped it, 63% redeemed it.
  • 98% mobile database opt-in rate: Of the people who redeemed it, 98% opted in to receive future offers.
  • An average cart size of $82.86 vs. an $18-20 average previously. In the latest month, it is now over $90.
  • 35% of the people who participated then reactivated, and are clipping new coupons that are sent to them.
  • There was an average lift of $20,882 per location from this single promotion.

7. Mobile coupons help attract a younger shopping demographic.
A challenge that many marketers face is an aging shopper base. In hardware and home improvement, nearly half of the base is 50 or older, so these retailers — including Ace — have an obvious need to attract younger shoppers.

For example, a demographic breakdown of the hardware and home improvement center share of market is 44.1% male and 55.9% female, according to NPD data via Home News, March 2009. People age 25-49 represent 56.3% of the shoppers in this channel, while those 50 and older are 42.6%

Mobile coupons don’t appeal only to younger people. Paper coupons have trended toward older buyers, but mobile coupons help attract both older and younger buyers. They appeal more to younger shoppers than traditional coupons. Yet some are surprised to find that older shoppers like the convenience of using mobile coupons. So using them appeals to a broader audience while, at the same time, attracting more youth into the store.

6. Mobile coupons can build an opt-in mobile database.
Unlike traditional coupons, mobile coupons can be used to generate an opted-in mobile name. With traditional coupons, customers bring it in, the cashier scans it, the discount is applied, and that’s the end of the engagement. With a mobile coupon, after it is used, the retailer can ask customers if they would like to receive future offers, and that generates an opted-in name. “I can’t stress enough the importance of building a mobile loyalty list. If you don’t have one, go start one. It is inexpensive to do. There’s a lot of clear guidance on how to do it,” Lavine says.

There is demonstrable value in sending mobile messages to customers who opt in:
  • 97% of mobile messages that are sent are read vs. 20% of emails. (Source: Digital Marketing Association.)
  • They are read on average within 5 seconds, and they have a response rate of 26% vs. 5% for email. (Source: Ofcom)
  • The result is a 5 times better reach, a 34,500 times faster response rate, and a 5 times higher conversion rate. (Source: Mobile Data Association.) 

“This puts your brand into your customer’s hand, and gives you a way to re-market to your customer every month. There’s a strong consumer preference. Seventy percent of consumers want to receive special offers on their phone if they have indicated preference for that brand, or type of offer,” Lavine adds.

5. Mobile coupons can unify loyalty, print, social, digital and in-store promotions.
When customers clip a mobile coupon, they can clip it as a message sent through SMS or email, or clip it to Passbook, which opens up geo-notification features. Mobile coupons also can be integrated with social media, such as Twitter, YouTube and Facebook, or with a mobile advertising campaign, or a mobile website.

Mobile also can be integrated with print and in-store media, such as register receipts, in-store signage, print campaigns, direct marketing campaigns, or direct mailers. “When you look at a mobile coupon, it is this unifying element that can tie together all of your promotions: all of your loyalty, all of your digital and social, all of your print and in-store. It’s very powerful, because it gives you a mobile strategy in a box, which can tie together everything you are doing,” Lavine notes.

4. Mobile coupons help marketers think like Home Depot.
Home Depot has one of the most clearly articulated corporate mobile strategies among all retail channels. The company has a six-point mobile strategy:
1. Always think through a customer lens. “Look at it from the customer point-of-view. What’s in it for your customer?” Lavine says.
2. Have a mobile first mentality. “It’s easier to go from mobile to desktop than the other way around.”
3. Mobile right-size your content. “There are two webs right now. There is the desktop web and the mobile web. Most people who go to get promotions on their mobile phone are pinching and zooming, because these are promotions that weren’t right-sized for their phone.”
4. Be engaging and relevant.
5. Build an opt-in mobile database.
6. Continually test and learn.

3. In-store signage can simultaneously drive mobile offer awareness, cart size, and opt-in mobile databases.
All the benefits from mobile coupons can be integrated with existing in-store signage. This can be a mobile call to action, or can promote the entire mobile offer.

Ace Hardware has done a particularly good job with this. The program includes: print media; receipts; social media; email; sales associate buttons and stickers, and text messaging campaigns.

One of the simplest and easiest in-store promotions that a retailer can do is print a message on the register receipt, such as an offer requiring the customer to opt in to the mobile loyalty list. “Mobile coupons are a more appealing consumer call-to-action than ‘join our mobile list,’ because you are telling them you are going to send money saving offers to their phone, and that sounds good to a lot of consumers,” Lavine says.

2. Optical scanners can greatly increase redemption flexibility.
Optical scanners are the wave of the future, and provide compatibility with both print and mobile. With the various mobile clipping mechanisms, whether to text, email or Passbook, a code is generated that can then be scanned at the check stand, but the retailer needs the right hardware and software. This has been a sticking point in handling mobile coupons in the grocery channel, where the predominant red laser technology is more challenging to use for mobile coupons.

A device that enables the shopper to self-scan their mobile coupons is better than one requiring the cashier to handle the phone. This can either be mounted on the counter, or a gun-style scanner. An alternative, which is used by many grocers, is a show-and-go approach, where the cashier reads a code from the phone as it is presented and enters it into the point of sale system. The self-scan approaches are faster.

1. Use the power of local and beat your bigger competitors.
Mobile programs lend themselves to local promotions, which are a very powerful way to get customers back into a store location. This works whether a retailer has a handful of location or hundreds. Mobile coupons enable marketers to connect with customers every month by:
  • Promoting products and services that only they offer.
  • Build local opt-in lists per location via keyword, zip code or store number.
  • Target offers by time of day, or present “door-buster” deals.
  • After offering mobile coupons, remind customers when they are about to expire.
  • Use knowledge of local events to promote brands and products.

“Connecting one on one with your customers through the power of mobile will enhance your brand and drive real results,” concludes Lavine. “Today’s consumer has an expectation of how they are going to interact with your brand on a mobile device. They are learning from a very early age, and have a very high quality standard for what they expect from you as retailer for their experience.”

The above article was abstracted from the recent webinar, “Top Mobile Coupon Secrets to Retail Success,” presented by Adam Lavine, president and chief executive officer, FunMobility, a mobile marketing and engagement solutions company. Lavine chairs the Mobile Marketing Association’s Mobile Coupon Ad Unit Standards Committee. More information can be found at, or by contacting Lavine via Twitter, @adamlavine.

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