The New iPhone and other Mobile Devices' Impact on Loyalty

Posted by Brent Harms on Thu, Sep 18, 2014 @ 09:54 AM

iPhone 6 PlusThis past week was highly anticipated for all Apple and iPhone followers. The new iPhone, as well as the new watch, will undoubtably shake the mobile world and ensure a great holiday season for Apple and everyone that is associated with the brand. One particular feature of the new iIPhone that has gotten a lot of buzz is the mobile payment capability. Historically, the mobile payment functionality gets a lot of attention but ends up with low adoption rates. Historically, very few use the function. This time, it seems different. With many of the big financial institutions on board with Apple’s technology, mobile payment capabilities may finally crack the barrier and begin to be widely used.

How does this relate to loyalty? As many of us know first-hand, loyalty programs are often tied to credit tools, such as the private label credit cards of retailers like Kohl’s and Macy’s.  They tie their loyalty program to the payment card. Credit card issuers also do this with the rich benefits of cards, such as the Visa FlexPerks offered by USBank. With this new mobile payment option available on iPhones, will loyalty programs surface that are tied to this mobile payment option? We’ll soon see.

I continue to believe that loyalty programs should be neutral to payment form. That’s how all of the programs work that Tecmark manages. If you tie it to payment, you immediately reduce your potential loyalty members to a fraction of your customers.  In addition, many of your best customers want to use cards such as FlexPerks; or maybe their debit card, cash, or check. These customers are likely your best customers.

For loyalty programs to be successful, you need to see a large percentage of your best customers as members and engaged in the program. You can then more effectively reward them for their loyalty and promote your products and services to them. We say let your customer’s double dip by earning benefits both for their loyalty to their payment card as well as your business. That way, you will see 25 to 50% or more of your customers engaged in your loyalty program versus fewer than 10% if you force them to use your credit card.   

By the way, the iPhone looks great, and the new watch will be very cool when it becomes available early next year. In fact, I’m currently a Samsung Note 3 phone user and may consider moving to the iPhone Plus. I like the bigger screen. I will have to first check out the new Samsung Note 4 Edge that will be out this fall. What great options we have in mobile phones! As my friends know, it’s hard for me to keep a phone for over a year with all of the great new options available.

Brent Harms

Founder & CEO of Tecmark

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Tags: Loyalty Marketing, Tecmark, Business/Branding