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Broadway Café: M-Coupons Usage

Introduction

The need for direct and targeted market communications has led to the increasing use of mobile phones to relay marketing messages. Due to its personal nature, the mobile phone provides an effective way of reaching customers (Dickinger & Kleijnen, 2008). The most common means of mobile marketing involves the distribution of mobile coupons (m-coupons) in the form of text messages (through short message service; SMS) and/or picture messages (through multimedia message service; MMS) (Bacile, 2010). As more consumers integrate mobile phones into their daily activities, marketers get the opportunity to reach a high number of customers in a personalized one-to-one manner. This essay evaluates how Broadway café can benefit from the use of m-coupons and the inherent risks in using such coupons.

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Advantages of m-coupons over traditional paper coupons

By adopting m-coupons, Broadway Café can benefit from a higher redemption rate that mobile coupons enjoy compared to traditional paper coupons. Such a higher redemption rate arise the advantages of m-coupons over paper coupons. Firstly, customers can easily store and retrieve m-coupons for redemption. Once customers download m-coupons into their phones, they can store them in their memory cards and carry them with their phones thus allowing redemption whenever the customers go to the café (Banerjee & Yancey, 2010). This would not be possible for paper coupons, which may be lost or forgotten when the customer goes to the café.

M-coupons also allow for location-specific targeting of coupons, which is not achievable through paper coupons. Such targeting of customers within a specific geographical zone is ensured by targeting customers’ cell phones that are receiving their signals from a specific communication tower (Banerjee & Yancey, 2010). By targeting phones receiving signals from towers near its establishments, Broadway café will enhance the redemption of coupons since customers will not have to travel for long distances to redeem the coupons (Banerjee & Yancey, 2010; Bacile, 2010).

Thirdly, m-coupons allow time-specific sending of coupons. For beverages such as those that the Broadway café offers, the time that the customers receive the coupons influences their willingness to redeem such coupons (Banerjee & Yancey, 2010). Accordingly, the café can send them-coupons during the peak time for redemption.

The café can determine such peak time from the spending patterns revealed by the CRM systems or the information gathered from analyzing prior response rates for coupons. Finally, m-coupons allow for the transmission of personalized messages. Through customer information revealed via CRM systems, Broadway café can match the coupons sent to customers with their preferences thus enhancing the relevance of the coupons to the customers (Banerjee & Yancey, 2010). Such relevance facilitates the redemption of the coupons.

Risks involved in mobile marketing and m-coupons

Despite its potential in enhancing marketing outcomes, mobile marketing presents various risks to an entity. The marketing messages disseminated through mobile platforms could lead to legal liability based on a violation of the Telephone Consumer Protection Act (TCPA) or state consumer-protection laws (Bryan & Blaine, 2010). Typically, claims based on such laws relate to spam messages and unauthorized charges levied on premium content (Bryan & Blaine, 2010). With regard to m-coupons, the unauthorized charge would rarely apply since entities do not charge customers for coupons. However, such coupons could attract claims based on spam messages where the entity sends unauthorized and irrelevant messages to the customers (Bryan & Blaine, 2010).

The second risk of mobile marketing and m-coupons concerns about privacy issues. Disclosure of customers’ phone numbers leads to loss of trust in the ability of the entity to maintain the confidentiality of customers’ private information (Vatanparast & Asil, 2007). Since the entity may involve third parties in conducting promotion activities, the risk of disclosure of customers’ mobile numbers to unauthorized customers is enhanced. When such disclosure occurs, parties unknown to the customer could use the information to conduct other promotion activities leading to customers losing their trust in the entity. The loss of trust would influence customers’ attitudes towards the café’s activities negatively.

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Benefits of collecting and tracking customers’ response rates for m-coupons

Collecting and tracking response rates for m-coupons is important in assessing the effectiveness of m-coupon strategies. By collecting and tracking such responses, the café can analyze the responses to determine factors that facilitate redemption (Dickinger & Kleijnen, 2008; Banerjee & Yancey, 2010; Bacile 2010). For instance, the response rates would identify whether customers redeem coupons based on the amount of discount or the timing of them-coupons. Accordingly, such analysis would enable the entity to use strategies that are more effective in facilitating redemption.

Analyzing response rates also enable the entity to organize its customers into clusters based on response habits. Such clusters would help the café to enhance future communications. For instance, the café could use the response rates to reward customers with higher redemption rates thus enhancing their loyalty to the café.

Benefits of tracking m-coupons forwarded to another cell phone

Tracking m-coupons forwarded to other cell phones would help the café in targeting the users of these other phones to increase its customer base. When customers forward them-coupons to their friends or family, it indicates that such friends share the customers’ interests hence are potential customers for the café. Based on the forwarded coupons, the café can entice the users of the phones who received forwarded m-coupons to sample its menu by offering special treats. For instance, the entity could provide discounts or free treats to every new customer who produces forwarded m-coupons.

Tracking the forwarded m-coupons also enables the entity to reward customers who engage in promotion activities. When customers forward the coupons to their friends, they are promoting the entity’s products to such friends. The café could thus reward such customers to enhance their loyalty to its services. For instance, the café could provide special treats to customers who forward them-coupons to friends. Rewarding such customers encourages them to continue promoting the entity’s products through word-of-mouth thus boost the entity’s sales.

Conclusion

Increased integration of mobile phones into people’s daily activities presents entities with opportunities to provide targeted market communications. One such opportunity is the use of m-coupons. This paper identifies the benefits that Broadway café can derive from the use of m-coupons and the risks that such use presents.

Broadway way café can achieve better redemption rates by using m-coupons due to the advantages of m-coupons over paper coupons. Such advantages include easier storage, location-based targeting, time-specific targeting and personalization of the coupons. Risks inherent in the use of m-coupons include legal liability due to spam messages.

By analyzing the response rates in m-coupons to identify customers’ redemption habits, the entity can identify customer habits thus enable it to send relevant coupons. This would help the entity to reduce the number of spam messages. Further benefits of m-coupons arise from tracking forwarded coupons. Such tracking allows the entity to reward customers who engage in promotion activities (forwarding the coupons) and target the individuals who receive the forwarded coupons for new business.

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References

Bacile, T. J. (2010). Mobile coupons: Is a picture worth a thousand words? Society for Marketing advances, 2010, 104-105.

Banerjee, S. & Yancey, S. (2010). Enhancing mobile coupon redemption in fast food campaigns. Journal of Research in Interactive Marketing, 4(2), 97-110, Web.

Bryan, C. & Blaine. K. (2010). Litigating mobile marketing claims. Communications Lawyer, 27(2), 4-15.

Dickinger, A. & Kleijnen, M. (2008). Coupons going wireless: determinants of consumer intentions to redeem mobile coupons. Journal of Interactive Marketing, 22(3), 23-39, Web.

Vatanparast, R. & Asil, M. (2007). Factors affecting the use of mobile advertising. International Journal of Mobile Marketing, 2(2), 21-34.

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