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Mobile coupons: Break through, break even or break the bank

November 1, 2010

Jeannette Kocsis is senior vice president of digital marketing at Harte-Hanks

Jeannette Kocsis is senior vice president of digital marketing at Harte-Hanks

By Jeannette Kocsis

A recent Forrester Research report stated that more than half of U.S. mobile users are aware of mobile coupons. However, only 3 percent of consumers have requested one.

Plenty of case studies indicate high redemption of these coupons, making mobile a valuable channel for retailers and other companies using coupons.

You probably tie segmentation to offers in all your marketing efforts. You may determine which segments should receive offers based on criteria such as past purchase history, potential customer value, frequency, current usage of offers and lifestyle information.

With mobile coupons, you may have to think about other considerations. Consider the value of the coupon based on the mobile channel itself, and whether the channel creates its own sub-segment.

When you plan a mobile coupon campaign, think about high rates of redemption and how that may impact the profitability of the campaign.

After all, historically response rates from e-mail and direct mail, determined the value of coupons accordingly. Now, expectations may not be as certain.

This could put companies who have adopted mobile as a channel in a unique situation. You will need to factor the consumers’ expectations against what you can afford, and remember that this is still an early-adoption phase for mobile coupons.

Value of coupons
You probably have to incent mobile users to sign-up for campaigns, either by convenience of the channel or by the value of the coupon. The consumer may be anticipating a better deal or exclusive offer for mobile.

As marketers, your risk is that you may get higher-than-anticipated numbers of users into your mobile program, and an exclusive or better deal may quickly need to be managed if it becomes too popular.

One way to manage this is to limit potential users by only allowing opt-in to customers in your loyalty or CRM program.

This seems like a good problem to have but if you are not prepared for the factors of volume of users, high response rates and exclusive offers, it could potentially create an unprofitable situation. Not to mention, when you have to potentially decrease the value of your offer, you may have some unhappy customers.

As SMS adoption grows and phone technology expands, it may become less necessary to offer better deals to mobile users. People will begin to understand the value of the mobile coupon truly from convenience sake.

I am not a coupon clipper but it is mostly due to a lack of time and an inability to remember the coupon when I head to the store. Yet, I never forget my mobile phone when I leave the house, regardless of my destination.

Once consumers get more comfortable with their device capability, they will expand usage of it past making phone calls and texting their friends.

Mobile sub-segments
So, who are mobile coupon users? In many cases, they could be anyone within your segments and profiles. Mothers, fathers, teens, males, females, young or old – any one of these primary segments could contain a mobile coupon user.
One attribute that they probably share is “early adopter.” You have a limited window of time that you could consider a mobile coupon user as someone who has embraced the mobile channel.

Early adopters understand the convenience of mobile and they know how to use their mobile device to the extent that they managed the opt-in and how to retrieve the coupon. They also may be motivated by the cool factor of walking into a store or office and handing over their phone to redeem their offer.

Depending on your industry and campaign, you may be able to use these factors when determining the best types of offers for mobile users.

Appeal to the convenience of the channel in your advertising, show off the cool factor and think about how you can take it further by offering deals through mobile that are appealing to early technology adopters.

Moving forward
As mobile coupons and other mobile functionality become mainstream, you will need to reevaluate your mobile strategies.

In the meantime, you should consider ways to help educate your customers on the value of your mobile offers and the value of the channel.

Most mobile opt-in forms do not fully explain how simple the process is, and do not really educate the consumer.

Consider adding a short video or interactive tutorial to assist unsure and novice users. This may not be necessary in the future, but for now you may need to help your customers overcome their fear of the unknown.

The future offers exciting possibilities in mobile marketing.

Keep your eye on industry trends and continually update your strategy based on profitability and on the changing segment of mobile users. Mobile technology changes mobile user behavior and you will need to embrace the concept of change to be successful.

Jeannette Kocsis is senior vice president of digital marketing at direct marketing services firm Harte-Hanks Inc., Yardley, PA. Reach her at

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