Since the first appearance of the Mobile Wallet in 2014 in Australia, mobile wallets have been driving Australia’s digitalization at unstoppable speeds.
Several banks in the first place, and later on operators and technology players in the industry started launching their solutions to offer valuable services to their customers, and further lock them in.
With the introduction of these new services and players, Australian consumers have been changing their payment habits and incorporating mobile wallets into their daily lives ever since.
Indeed, in 2016 it was reported that 70% of all transactions were contactless, and mobile wallet transactions already accounted for 8% of that. As the industry expects it to be, these numbers will keep growing steadily, and this is why small and medium businesses must pay close attention to how mobile wallets will open up new marketing opportunities for them.
But, why exactly do businesses these days still focus only on traditional forms of customer retention? It has long been proved that loyalty programs and coupons are beneficial for businesses as they influence consumer’s purchase behavior and ultimately leads to better customer retention and loyalty. Along the same lines, consumers have always been big fans of these initiatives for its monetary benefits. Indeed, it is not surprising that 90% of consumers in the world participate in some rewards program, and in places like the US, the number of active rewards programs per household has already reached a high of 12.
Businesses have kept and encouraged reward programs up until today, however, deficiencies still exist. As it has been seen, enhanced data collection, better customer sign up and more personalization are some of the areas that need to be improved. Most consumers as well have been found to be motivated to use such incentives since they allow them to save money, but the inconvenience of having to carry several cards as well as earning and redeeming points at the right time has discouraged them from using them frequently.
How can mobile wallets make a difference, though?
In my experience working for the payments industry, I have identified three ways they do: by allowing the creation of efficient loyalty programs, opening the door to personalized coupons and promotions, and allowing businesses to create content that reaches a wider audience.
Mobile Wallet Loyalty Programs/Coupons:
Mobile wallets allow consumers to incorporate all their loyalty cards into one single place while not having to worry about making sure they have them along when visiting a merchant. This is not the only advantage, though.
Mobile wallets can allow loyalty points to be automatically added to their accounts, and become visible to the user right away to offer better transparency. Similarly, redemption rates can be extremely increased as card access becomes much simpler.
Loyalty programs sign-ups too can see a substantial increase if consumers are given the option of going through the process digitally. This process can be linked to the merchants’ app to increase traffic or downloads as well. And in the case of a merchant without its own app, it digitalizes a process that otherwise would have to done at the offline stores.
In the same way as loyalty cards, traditional paper-based coupons can also greatly benefit from mobile wallets, since features like push notifications not only encourage redemption but enhance trackability and content control. Additionally, administration of expired coupons can also be simplified due to the direct content exposure control.
Personalized and location-based offers/coupons and promotions:
Traditional marketers that have shifted into digital marketing have done this for a reason: mobile gives businesses huge amounts of data and insights that can be used amongst others, to deliver better targeted and personalized promotions which can generate bigger impact on clients.
Indeed, mobile campaigns can be much better designed, thanks to the detailed information that can be gathered from current and potential customers and their needs. Mobile wallets can make a huge difference here. Having the opportunity to gather data insights from mobile wallets can not only help business better achieve their desired KPIs but also boost their marketing promotion campaigns’ impact.
Offers and promotions can also get to another level by not only utilizing its user data to push targeted offers but also by including location into its strategy and boosting retail foot traffic. Situational or real-time marketing can be extremely efficient as users’ situations are taken into account, and it is a no brainer that an individual who voluntarily entered a store, will have higher chances of making a purchase if the right incentive is offered to him.
Ongoing engagement and content:
In the same way, mobile wallets can complement the business’s owned channels such as apps or websites, and act as an additional user acquisition and retention channel for on-going communication and content exposure. When running co-promotions with mobile wallet players or simply when businesses are pushing their own promotions in them, call-to-actions can be easily implemented to redirect the interested users into the businesses’ owned channels. This is an effective strategy to control the user journey, and have better user ownership.
Even better, for small and medium businesses that don’t even have their own channels or a direct way to reach to their consumers, mobile wallets open a big new market for them: they allow them to reach their current customers as well as a much wider pool of potential ones.
Doesn't it sound amazing?