After piloting a mobile loyalty program at three spots late last year, frozen yogurt franchise Yumilicious has rolled out the initiative to 15 locations in Texas and South Carolina.

With the mobile loyalty program, customers are not required to carry a loyalty card but can earn and redeem rewards using their mobile phones. Once loyalty members spend $100, they receive a $10 digital card good toward future purchases.

“The card lives on the phone – we don’t store credentials on the handset, they are stored in the cloud,” said Doug Dwyre, president of Mocapay, Denver, CO. “How the consumer accesses that account is through the use of a single-use perishable code.

“The customer opens the digital wallet, clicks on the comp card and gives the cashier a code,” he said. “The code is entered into the point of sale and from there it works like a gift card.

“Customers can use all or part of it. Once the funds are gone, the card will go away.”

Understanding customers
The program is integrated with Yumilicious’ existing point-of-sale equipment. Through the use of the app, Yumilicious hopes to gain a better understanding of its loyal customers, when they are visiting the stores, how often they visit and when they redeem loyalty points.

Customers can sign up for the program by texting a keyword to a short code or by entering their mobile phone number at the point of sale. They can also sign up at mocapay.com or through the Mocapay mobile app.

Customers then use SMS, the mobile Web or the smartphone app to request a loyalty code for Yumilicious.

The code, which is good for a limited time and can be used only once, is returned to the customer’s phone.

The customer then reads the code to the cashier or shows the cashier the phone.

When the customer has reached 100 loyalty points, a $10 mobile comp card is sent to the customer’s phone.

The frozen yogurt chain plans to expand the program by offering mobile gift cards and sending out targeted messages and special offers.

Driving engagement
When sending targeted messaging as part of a loyalty program, it is important for marketers to send opted in users something meaningful in order to keep them engaged and to drive repeat visits or higher spends, per Mr. Dwyre.

“Consumers look forward to receiving text messages from merchants,” Mr. Dwyre said. “The key is  you have to make them relevant – it can’t just be fluff otherwise they will opt out.”

Mocapay recommends marketers send out text messages every two weeks.

Yumilicious has sent a few text messaging campaigns but is mostly focused on signing up customers for the loyalty program at the moment. Once this stage is completed, it will start sending out text messages on a more regular basis.

The mobile loyalty program is being promoted through Facebook, Twitter, and in-store signage.

“They are an innovative brand who doesn’t want customers to worry about carrying around a card,” said Karen Moritzky, director of client relations at Mocapay. “Everyone has their cell phone on them, so it makes it easy to use their loyalty program.”