Research Notes

Retailers can use Loyalty Programs together with Mobile Products

The retail sector can use loyalty programs combined with mobile offerings to thereby make their mobile products even more attractive to their customers.

Today many stores already offer their customers various types of loyalty programs – retail chains that are entering the mobile market can easily combine these loyalty programs with their new mobile offerings in a number of areas:

  • More attractive prices for loyalty customers
  • The possibility of free calls to other loyalty members
  • The possibility to exchange bonus points for mobile traffic
  • The possibility to purchase mobile services with bonus points

The most difficult part of that process is to develop the concepts and products. After that a link needs to be created between the billing application and the CRM application being used to control the loyalty program. The link between the two systems is the mobile telephone number and the CRM application just needs the basic traffic data on a weekly, monthly or quarterly basis.

From a jurisdictional point of view it is important to ensure that customers accept that data from the loyalty program is combined with data from the mobile provider, as the two companies are two independent jurisdictional companies that are not allowed to combine personal data without customer approval.

Only the retail chain’s imagination and developing skills will set the limits on the many combinations of mobile products and customer loyalty program initiatives that can be developed, marketed and sold. If a retail chain can create an innovative and attractive mobile loyalty program for their customers, they will reduce their customer churn, while simultaneously adding value to the initial product that the customer is primarily interested in purchasing.

Much more information about retail chains doing business as mobile providers is available in our latest report How to get success in the second Generation MVNO Market ,  that analyses the retail chains future role in the mobile universe and why retail chains need to have a mobile strategy and which market phases the retail chains will go through. Included in the report is an analysis of retail chains’ assets/strengths and risks/disadvantages when doing business as mobile providers. The report examines relevant and inspiring cases that document that the retail chains entrance/involvement in the mobile area is not something that may happen in the future, but is in fact a very current phenomenon that will become even more dominant and visible in the mobile industry over the coming years.

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