Sales and Marketing

Marketers have long been excited about the prospect of sending ads to consumers’ cell phones, but the latter haven’t been too keen on the idea. That, however, is starting to change. Though cell phone owners still seem resistant to the idea of being pinged with random advertisements on their phones, they might not be as opposed to participating in a mobile customerloyalty programme.

Take, for instance, the partnership between three unlikely compatriots—the Odyssey chain of bookstores, travel portal MakeMyTrip, and direct-marketing firm UCP Direct. Odyssey has a presence at the airports of Mumbai, Bangalore and New Delhi. Whenever someone books a ticket on MakeMy-Trip for any of the three cities, UCP lists them as a potential Odyssey customer. Two hours before the flight takes off, UCP sends the consumer a text message with a discount coupon. The receiver has the option of using that SMS to pick up a discount on purchases made at the bookshop inside the airport.

Called a mobile coupon, or M-coupon, this is a digital take on the traditional printed discount coupons. Here’s how it works. The text message contains a unique code that entitles the customer to a special discount or offer. The consumer takes it to the vendor, where a computer reads that code, compares it to the data on the server, and validates it. Since mobile coupons work on customers who are near a store’s location, the redemption rates can be greater than those of its paper cousins.

For companies catering to the end-consumer, M-coupons can be a great way to generate customer loyalty. Kunal Bahl, chief executive, MoneySaver, a promotions platform leveraging mobile technology in India, says: “Coupons make for a US$8-billion industry in the US, and most of it has revolved around B2C businesses.”

A coupon-based strategy makes sense for fixed-price goods, and has scored success mostly with food retailers and restaurants. It could be used to “increase walk-ins, engage the customer directly with the product and offer value addition to customers, both loyal and lost,” feels Suresh Narasihma, chief executive, TELiBrahma, which provides locationbased mobile social networking along with promotions.

The appeal of this mobile marketing technique lies in three simple reasons. It is easy to generate since it does not have to be printed like a traditional discount coupon. It comes cheap because bulk messaging services are now available for as little as 10 paisa a SMS. And it is highly tactical—it can be sent at any time of the day, on any day of the week, or specifically, when the consumer is at a particular location.

It is not surprising that brands such as Arrow, Seventymm and The Loot have been cashing in on text-message coupons with varying degrees of success. Some like Castrol have plugged into the global ad network of InMobi to run M-coupon campaigns. Says Khamir Bhatia, head of sales, South Asia, InMobi: “Twelve per cent of the visitors to the site signed up for maintenance tips, 2% of the visitors downloaded the M-coupon and 1% of the coupons were redeemed within a month of the campaign.”

Since the timing of these text-message coupons can be controlled, they are a great way to get business on certain days. Says Ashok Desai, owner of a chain of dry cleaning stores in the US, “Certain days are very slow for us, like when it rains or in the middle of the week.” Now, on Tuesday mornings, he sends out a promotion to the 100 people who have signed up. To get customers to register to receive the M-coupons, Desai put out fliers in each of his stores and sends direct mail to local residents, urging them to send a text message to the company’s short code to receive special offers. The result—he gets about a 10% redemption rate per coupon. The initiative has generated extra sales, he says. In fact, such were the results that Desai stopped paying to place coupons in local newspaper.

Although a useful tool, the M-coupon concept is still in its infancy in India. Consumers are not as aware of text-message coupons, resulting in “redemption rates of 10%, or less typically,” according to Raj Bhatia of UCP Direct.

Language is another inhibiting factor in the spread of M-coupons. Not many mobile mediums support regional languages in India. This makes it difficult to plan promotions for the non-English speaking population.

Also, “reliability of mobile telecom networks is another problem. You need seamless connectivity inside a mall to ensure that messages are received promptly,” adds MoneySaver’s Bahl.

The best way to ensure a higher response rate is to keep the campaign simple. Says Ankur Dubey, project manager – mobility, Make-MyTrip: “We avoided spamming, and kept our promotional offers simple. We offered uncomplicated terms and conditions. This guaranteed increased effectiveness and success rate.”

The database also has to be targeted. For instance, for the campaign to work for MakeMyTrip, the M-coupon has to be received by the flier, who may not have booked the ticket himself.

Moreover, the receiver has to know the sender. “If credibility is low, response will also be low,” says Bhatia. Bombarding consumers with messages is definitely not the way to go. As with most things in life, balance is the key to getting the most out of M-coupons.

—Sunaina Sehgal with inputs from the US edition

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