REWARDS GO MOBILE

Mobile location-based promotions that provide a reward or benefit resonate more strongly with consumers, according to a recent survey by SYNERGISTICS Research entitled, Optimizing Reward Programs. Survey respondents were presented with a number of situations in which they might receive location-specific marketing messages or promotions on their mobile phone and asked to rate the value of each. Somewhat more than half find value in receiving email or text messages on their mobile phone alerting them to special sales or discounts while shopping in a specific store. This would be “very” valuable to almost one-fifth. Half respond positively to getting mobile alerts informing them they can earn extra rewards for using a particular credit or debit card for making purchases at the store they are visiting. One in six see this as “very” valuable. Similarly, half value receiving coupons on their mobile phone for products they previously purchased at the store. This is “very” valuable to one in six. Receiving mobile advertisements for products previously purchased at the store is less valuable to respondents, being rated valuable by somewhat more than one-third. One-tenth see this as “very” valuable. In each case, younger respondents, particularly those ages 18 to 34, respond more positively to these types of location-based mobile promotions. In contrast, older respondents are less likely to find value in them.

William H. McCracken, CEO of SYNERGISTICS, stated, “Location-based mobile marketing messages and promotions are perhaps one of the most interesting – and controversial – developments in consumer marketing. Our survey examined the reaction of consumers to such messages as related to payment and reward behavior. And
our findings reveal a divergence of opinion in the market in terms of the value of location-based mobile marketing. Younger respondents are very receptive, perhaps even enthusiastic, about getting such messages. Opinion tends to be more negative as age increases. This underscores the importance of coordinating the targeting of such messages with customers’ expressed wishes vis-à-vis opt-in/opt-out policies. Privacy policies, communicated clearly and straightforwardly, will be more important than ever in the future environment. Targeted mobile marketing presents exciting opportunities for financial providers, but at the same time burdens them with increased responsibility regarding customers’ privacy and security.”

These are among the findings from SYNERGISTICS study, Optimizing Reward Programs, featuring 1,004 national Internet interviews with consumers age 18 or older. This study examines consumer usage of and reaction to reward programs for financial services such as credit cards, debit cards, and checking accounts. Relationship and balanced-based rewards, as well as opportunities for fee revenue and account retention and acquisition are evaluated. This study will help providers gain an understanding of consumer preferences, attitudes and expectations, as well as behavior patterns, which will assist providers in optimizing the effectiveness of their reward programs.