Voices: the CMB Blog

The Mobile Wallet is a hot topic for those in the retail, technology and financial services industries. As you may know, mobile wallets allow customers to pay at store checkouts with a tap or wave of their smartphones. In our recent Consumer Pulse study of 1,500 smartphone users, we learned that half are unaware of Mobile Wallets.

To drive adoption, retailers and technology providers will need to overcome a lack of awareness and fear of new technology, all while offering a clear advantage over more traditional payment methods. As shown below, loyalty programs provide a key leverage point to drive Mobile Wallet adoption.

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Download our latest report on the Barriers and Opportunities for Mobile Wallet and learn more about what will drive (and block) adoption, and who has the advantage as we enter the next leg of the mobile wallet race.

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty.  She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

You’re about to step out your front door...

But wait just a moment! You can only take your phone or your wallet, which will it be?

Pre-smartphone there would be no contest, I’d take my wallet. But times have changed, and the balance has now tipped in favor of my beloved iPhone. Beyond checking email, I use my phone to deposit checks, see when the train is coming, read the news, record my ski stats, listen to music, and if I've also forgotten my lunch, I can use a mobile wallet app to buy a sandwich at the deli across the street.Of course there’s more to mobile wallets than the fate of my lunch, there are billions of dollars at stake for the banks, credit card companies, start-ups, tech giants and others who want to dominate, or just cash in on, the evolving relationship we have with our smartphones. In our latest Consumer Pulse, we surveyed 1,479 smartphone users about what they know about mobile wallets, what’s keeping them from using, what features they’d like to see, and who they'd trust to provide them.

First things first, half of respondents said they were familiar with mobile wallet technology (or proximity payments)—apps that let users swipe or tap their phone at the point of sale, rather than using credit cards or cash. When we asked this 50% to tell us about their experience and expectations for using mobile wallets most said they didn’t plan on adopting a mobile wallet…but nearly a quarter said they were planning to try out the technology in the next 6 months (TWEET THIS). That’s no small number considering smartphone ownership is nearly ubiquitous.

Now let’s consider our more reticent smartphone users, what’s keeping them from trying out the technology that’s already at their finger-tips? We weren’t surprised to find that security (73% called it a barrier to adoption)—particularly identity theft—was high on the list of what’s keeping people from giving up on cash and credit (TWEET THIS). The good news for mobile wallet providers is 79% said they’d be more likely to adopt if they were guaranteed 100% protection against fraud and theft. While many mobile wallet providers already offer this protection, the results show there’s a real opportunity to benefit from promoting this type of security measure (TWEET THIS).

If you’ve assuaged the fear of being scammed, stolen from, and over-charged (remember when people were afraid to shop online?) what’s next?  Aside from the novelty of scanning your phone, what’s the incentive behind using a mobile wallet over your, just as convenient, credit card? We found reward and loyalty points were very appealing, particularly when offered as additions to existing rewards people get with their credit cards—80% of non-adopters said they’d be more likely to adopt if offered these extra rewards (TWEET THIS). Of course people like rewards and points—you don’t need to be a marketer to understand that. But nearly as many (66%) said that getting the same rewards they got with their credit card would increase their likelihood to adopt—to which I say, c’mon people aim a little higher.

So yes, rewards are nice, but one of the best things about smartphones is the ability to look stuff up. Think of how many arguments have been nipped in the bud by a quick search of imdb.com or Wikipedia. That ability to find the information you want any time, any place, is just as compelling in a shopping context. Including location-based services like the ability to easily compare items in stores nearby increases likelihood to adopt among 78% of non-adopters (TWEET THIS). But we also found people were a little leery of getting too many alerts, both because they can be annoying and because they suck down battery life. Note to providers, offering people the choice of what alerts and discounts they receive could be a major draw as they decide who they’d like to provide their mobile wallet service.

The topic of mobile is rightly dominating the discussion in almost every industry, but the fact is, for most people mobile wallets are still incredibly new. Amid all the noise and growth, there’s still tremendous opportunity for providers who understand the concerns, goals, needs, and desires of the millions (billion?) of people with the technology right at their fingertips.

Download the full report and learn more about what will drive (and block) adoption, and who has the advantage as we enter the next leg of the mobile wallet race.

Megan is CMB's Product Marketing Manager, she loves Alpine Replay, and longs for the day she can unlock the front door with her phone.

Originally Published in Loyalty Management Magazine

Recent articles on the “new economics” of loyalty programs and the choices program managers face may be important to read, but many of them leave me bewildered. These articles warn that in the new loyalty environment, credit card companies will play an increasingly disruptive force as members seek reward currency that offers them more options. They encourage executives to restructure the currency to ensure its dominance, and some authors argue that cash-strapped firms should divest their loyalty programs to generate revenue for the company. 

I agree that if you manage a mature program, with a point or mile-based currency, you need to ensure your program offers a relevant currency with a competitive “earn and burn” structure. This currency and the associated promotions are table-stakes; a requirement for both acquiring and retaining valuable customers. But ask yourself this question: is a loyalty program where your primary focus is on the currency (and its economics) really supporting your customer loyalty strategy? 

In our opinion, real loyalty—the kind that spurs evangelization, incremental trips/purchases, paying a price premium—doesn’t come from delivering points. Your customers don’t buy from you because you give them points. They choose to buy from you because of the distinct value provided by your brand. The key problem with enhanced focus on program currency is that points and miles don’t reflect your brand or its unique value proposition—and won’t engage your passionate customers. 

So how can you ensure that your loyalty program IS supporting your loyalty strategy? 

Relevant communications: Reflect your knowledge of your members’ behavior and preferences in your program communications. I fly out of Boston: why does American Airlines regularly send me promotions on flights out of Chicago? 

Build out ‘soft benefits’ that reflect the brand: Consider why your loyal customers are passionate about your brand—why they choose to spend money with you and not your competitors—and incorporate supporting elements into your program. You can ramp up these “connective tissue” benefits as customer value increases. 

Consider ‘unpublished’ surprise and delights: Instead of revamping the loyalty program and listing all benefits on the web site, invest in delivering valuable customers an item they’d value on a one-time basis. The benefits are clear: you create good will with your most valuable customers. You’re also not raising the bar, adding to the arms race or increasing expectations. And, in today’s connected world, some of these “private gestures” will support positive comments on social-media channels. 

A few brands whose published loyalty programs reflect their brand value and underscore their unique selling proposition:

One hotel chain that excels at the special touches is Kimpton Hotels. The small boutique chain’s unique, fun, and socially conscious brand promise infuses everything, from their rooms to their website, to their loyalty program—InTouch, and their elite loyalty program Inner Circle. Their InTouch program offers traditional perks like free nights, but the preferences of loyalty members also get recognized—the hotels customize amenities (like pillow, newspaper, mini-bar) based on guests’ stated preferences. The rewards are more valuable for the Inner Circle members—those who stay 15 times within a calendar year—they include direct access to the CEO along with the more typical complimentary upgrades. 

While hotels have multiple touch-points for sharing their brand with their guests, retail stores can face more of a challenge. But Neimen Marcus’ five tier InCircle program clearly demonstrates an understanding of why loyalty program members choose to shop with them. The program’s benefits reflect their unique brand proposition and reflect the store’s deep understanding of their target customer —affluent shoppers who value luxury and a high-end shopping experience. Neimen’s rewards include perk cards which can be used for dozens of services including alterations, in store dining, monogramming and shoe repair. Rewards highlight exclusivity as well as the more traditional point based rewards. 

With truly vast amounts of data, Amazon could be content with offering suggestions based on previously purchased or viewed items—it’s no small thing to show your customers you know what interests them. But Amazon’s rewards program goes beyond the data warehouse, and while Amazon Prime isn’t free, the free or reduced shipping, and access to content, the Kindle lending library, where Kindle owners can borrow and read books for free, are powerful reminders of the value of the brand and strong motivators to encourage frequent shoppers to return again and again.

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty.  She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

By Athena Rodriguez

CMB fun fact: our little street in Boston has enjoyed a few moments on the silver screen, perhaps you've seen the great moment in cinematic history known as Bride Wars, or maybe Surrogates starring Bruce Willis as a cop from the future, filmed in our lobby no less. I know, as if market research wasn't glamorous enough! All this to say we’re kind of used to strange goings on outside 179 South Street, so I wasn’t initially interested in the guy, standing in a pick-up truck outside the office, handing out cans of Diet Pepsi, I’m usually a Diet Coke drinker* anyway. However, as a marketer I have a soft spot for a good campaign and I’m not too proud to turn down a free soda.

So what’s blog-worthy about free soda? Two deceptively simple things stand out. First, there were some very cute details—the Pepsi logos were heart-shaped in honor of Valentine’s Day—pretty adorable. The whole website was done up for Valentine’s Day and there was also a contest to tweet about what you love, it was a perfect and simple tie-in with the brand and a chance to win something. Lesson: promotions don’t need to be too complicated to be really appealing.

Along with the can of soda, they handed out coupons for a free 2 liter bottle, as well as a Boston-specific flyer with little allusions to the Red Sox, Patriot’s Day, Newbury Street, the Charles, and the North End, all stuff that's very appealing to locals (and those of us who’ve been here awhile). Lesson: it's tough to lose when you're appealing to hometown pride. Just make sure it's not written by someone who's only seen your town on Google Maps.

And if all else failed, they really couldn’t go wrong with the life-sized Sofia Vergara cut out available for a photo opportunity.

*Note, I make an exception for Wild Cherry Diet Pepsi which beats both Diet Coke and Diet Pepsi by a mile.

Athena is a Project Director at CMB, she's only just forgiven Pepsico for pulling Crystal Pepsi off the shelves.

You may have heard the latest from Disney—they’re about to introduce a new “MagicBand” wristband letting wearers take advantage of perks like skipping to the front of the line for rides, as well as pay for meals, and purchase gifts.  It offers guests the ability to leave the wallet and paper tickets at home and focus on having fun.  The benefits to Disney can be huge, and a lot of people are seeing it that way; as one headline proclaimed: “Disney creates the happiest data mine on earth.”  Pretty clever, but of course there are those who aren’t quite as happy about the innovation; besides the thought of Big Brother entering our lives, won’t somebody think of the tan lines?But let's focus on the business aspect, the ability to track all activities and purchases on-park creates an immense opportunity for marketing, and much of the chatter concerns how Disney can use the data for direct marketing.  Did the guest ride all of the roller coasters?  Target promotional offers touting the latest thrill rides.  Did the guest get a picture with one of the cast members?  Send a doll to the guest’s suite to increase engagement.  Did the guest make a purchase at any of the retail stores?  Give them a coupon for a Disney store near their home.

Nearly everyone is coming up with ideas for how this might help Disney directly sell more of what it offers.  I’d like to think about how Disney can learn from this data in order to innovate and improve the experience.  In the direct marketing examples, the data remains data— it’s used solely to trigger marketing offers.  For market researchers, the data isn't useful until we find relationships that are relevant to decisions.

So, here is my challenge for you: what type of analysis do you think needs to be done?  What potential relationships might Disney find to innovate and change the experience?

I’ll get it started:

Disney could run on-property communication tests to improve messaging and information delivery.  By placing unique signs throughout the park, Disney can track all guests who pass each sign and capture behaviors after passing the sign.  Instead of waiting many weeks or months to gather feedback, Disney can get an “immediate” understanding of which signs work best – and potentially why.

Tell me your ideas in the comments:

Jeff is VP, Market Science Solutions at CMB. He'll have a pair of shiny new mouse ears for the most interesting idea. If he's not wearing his wristband you can still find him tweeting @McKennaJeff.