By Patrick Marrinan

You know this story. Retail mobile promotion – think of it! Actual marketing ROI! Real-time granular data and redemption metrics from promotion efforts available on the fly! Serving as the basis for better- targeted, more finely honed offers. Continuously delivered to spend-happy opt-in consumers, who in turn, drive retail sales through the roof!

All with the lucrative benefit of displacing freestanding inserts and direct mail couponing and legacy print promotion delivery. Just think of it!

But it has not worked that way, has it?

As with nearly all process improvement offerings, the many reasons things got done the old way actually mattered.

In some cases such as coupons, it really mattered. The paper medium was – and is – “scrip” that delivers actual cash value. And cash, once deposited into the cash register drawer can be “counted,” bundled for deposit or reimbursement, and recorded in the ledger as sales.

Last mile standing
The simple act of executing a retail transaction is not that simple in the digital world: the last mile.

It is not really that hard to send SMS messages to consumer handsets, and not really that hard to count up cash and fill out a deposit slip after closing hours.

But in the high-promise world of mobile promotion, everything in between these two steps has been just the opposite.

The need to execute and record tax-accurate transactions has stood in the way of widespread adoption of many efficiency-enhancing mobile retail technologies.

The initial forays into the universe of solutions to this hurdle include the deployment of expensive bar code scanners integrated with the software housed in point-of-sale hardware, or the use of separate mobile transmission interfaces which record transactions for later tally, and even handing out specialized mobile handsets – which could be scanned by existing retail scanners – for temporary consumer use in large retail venues.

Getting to some measure of mobile promotion ROI is a big step in the direction of increased marketing accountability. And in many mobile promotion applications, it can be done.

If we break down the perceived deliverable of ROI into what is reasonably achievable and approach it from the perspective of graduating degrees of reliability, it just takes a little legwork, and many of the aforementioned last-mile hurdles can be cleared.

Tips jar
Using some batch processing and some accessible statistics, we can get a good fix on ROI and even deliver a basic forecasting model for mobile promotions. Here is how:

1. Invest a little upfront time working with the retailer deploying the mobile promotion.

Having a basic understanding of store operations is crucial. Paying specific attention to the speed, method and process of recording transactions is especially important.

2. Deliver a promotion or redemption code to the consumer handset. We need something to track, right? Install a tracking code on the mobile coupon.

This can be done in either SMS or in SMS + WAP environments. Coding promotions in an application environment should be a snap.

3. Sample redemption activity in person at the retail location.

You likely find the significant majority of redemptions for any single offer happen the day it is sent out – you can schedule your visits accordingly. Take note of transaction values for promotions redeemed.

4. Get your hands on the store journal. Most point-of-sale systems are electronic, most are computerized and most have some basic sorting capability.

Viewing the transaction values associated with redeemed coupons in the journal is the basic data needed to determine ROI.

5. Make a record of as many data points as time allows. And run a simple regression to deliver a basic forecasting model.

A regression tool is readily available on current Microsoft Excel applications. Input your data points and determine a plot line for forecasting.

Progression on regression
These basic steps can be used to calculate basic ROI, helping to move past the last-mile hurdle. And the regression approach provides some forecasting visibility.

Perfect? Well, no. Depending on your data, you may not achieve confidence level results in the 90-percent-plus ranges.

But by demonstrating a process which delivers on the promise of mobile promotion’s granular tracking capabilities – and an ability to work within last-mile constraints – you can probably get to the next pilot test and beyond.

Patrick Marrinan is CEO of Lime Cellular, a Red Bank, NJ-based mobile marketing firm. Reach him at [email protected].