NFC Near Field Communication and Loyalty … a beautiful friendship

 

 

Loyalty: it’s devotion, duty, or attachment to somebody or something. It’s also the relationship that we, as consumers, have with the things we buy and the people we buy them from. Loyalty has been part of the marketing lexicon since the earliest stages of trade — finding ways to not only attract customers, but to keep them devoted or attached to the brand, product or service, to build a relationship with the customer. Loyalty is also one of the key criteria in creating competitive advantage and is often an integral part of a company’s business strategy. Numerous loyalty programs and systems have been implemented in the marketplace: coupons, giveaways, points programs, and more. But more important is the way technology has enhanced the loyalty program and its evolution over the past few years.

As technology — and specifically mobile-enabled technology — has crept into every facet of our society, consumers demand convenience and access on-the-go more than ever before.  That being said, loyalty programs have had to evolve and adapt. While coupon clipping and physical loyalty cards still serve as a viable option in some market segments, the days of overstuffed wallets filled with customer reward cards and envelopes full of clipped coupons (does anyone remember when The Entertainment® Book membership was strictly in hard copy?) are drawing to an end. The consumer relationships built with paper and plastic are now bonded by bits and bytes. 

Enter near field communication. I titled this blog, NFC and Loyalty … a beautiful friendship; that’s because NFC enables so many possibilities within loyalty programs, allowing brands to communicate and interact with consumers (and retailers) on many different levels. The content delivery is limitless, whether video, images, games, surveys and questionnaires, discounts, and more.

With NFC, incorporating a mobile marketing strategy plays a much larger role in loyalty programs. NFC allows consumers  to interact with anything, anywhere, anytime — with just the tap of a smart device. The ability of consumers to redeem a coupon electronically, with a tap, facilitates ease of use and increases redemption rates.  Its analytical benefits for the brand are two-fold:

  • The brand gains information and insight on the retailer collecting the coupon, providing information on your most profitable outlets, redemption times and trends, market segment; and
  • The brand gains consumer-specific information on redemption, buying preferences, and other potential products within the brand umbrella purchased at the retail site.

The retailer also benefits from these analytics. In addition, retailers offering VIP programs (points-based loyalty cards, for example), have the ability to offer special promotions on-the-spot, based on points balances, current purchases or other criteria.  The consumer has everything delivered, tracked and tallied via their smart device, eliminating the need for balance statements, paper-based tracking, or delayed opt-in processes —with the retailer, or brand, gaining near real-time insight into buying habits and preferences.

Arthur Beavis, social media expert and CEO of RTB Social, said in one of his blogs, NFC Changing the loyalty landscape, “Thanks to innovative NFC technology, retailers, restaurateurs and other establishment operators can bring loyalty programs online in a more expedited and efficient manner.” He further elaborated, “Rather than use the old-fashioned punch cards, NFC ‘touch points’ can be adhered to cash registers, tables, and signs, then accessed in an easy, paperless manner, whether it’s to electronically track how many drinks before receiving a free one, sign-up for e-newsletters, or more. Aside from consumer benefits, NFC offers businesses a new and efficient method of keeping track of an emerging customer base.”

And we are already seeing great strides in NFC-enabled loyalty programs.

In 2012, quick service restaurant Dairy Queen showed promising results with an NFC-enabled loyalty program promotion. This pilot of a mobile loyalty rewards program, netted nearly 1,000 customers as loyalty members, which was pretty stellar within a 12,000-resident strong community in Rochester, Indiana, with redemption rates spiking during the program.

Just in the past few weeks, Loftus in South Africa, is piloting NFC within its turnstiles for the stadium.  The NFC cards offer more than just access to a live event, but also extend to parking, VIP access, in-stadium purchases, promotions, competitions, and loyalty rewards.  So with the simple additional of extra perks to the ticketing process, the stadium’s pilot program could ultimately encourage event patrons to spend money within the venue, and be able to customize rewards based on those patrons buying habits and preferences. World Wide Worx’s Arthur Goldstuck notes while the Loftus pilot looks like a great proof of concept, the real take-off of NFC will happen when it becomes pervasive in smartphones, and people begin using it naturally as part of everyday activities. “At that point, financial and payment solutions can be built on top of such everyday use, rather than using payments as the foundation for NFC.”

In conclusion, integrating NFC into a mobile marketing strategy, and specifically leveraging the popularity of loyalty programs, can benefit both consumers and brands.

[Editor’s note:  For more information on loyalty programs and mobile marketing, register to download our On-Demand Webinar: Next Generation Digital Receipts and Mobile Marketing Platform.]


About the Author:

Robert P. Sabella brings over 20 years of legal and entrepreneurial experience to OTA Ventures and is considered one of the most innovative leaders in developing and bringing new technologies to market. OTA Ventures is a combination companies that are synergistic in their focus and that leverage common infrastructure, both physical and intellectual. Mr. Sabella is also founder and CEO of OTA Training, LLC, the producer of the NFC Bootcamp™ training series, and has recently co-founded the AccelerateNFC incubator program, dedicated to fostering start-ups in bringing NFC technology to the market.

Robert Sabella

Robert P. Sabella has 20+ years of legal and entrepreneurial experience and is considered one of the most innovative leaders in developing and bringing new technologies to market. He is the founder of the NFC Bootcamp™ training series and has recently co-founded the AccelerateNFC incubator program, dedicated to fostering start-ups in bringing NFC technology to the market. He is co-author of RFID+™ and a prolific writer and speaker on NFC and RFID.

2 Comments:

  1. Robert, is OTA Ventures involved in funding next generation loyalty programs?

    • Hi, Steve. Thanks for your inquiry. OTA Ventures and NFC Bootcamp are sponsors of the new AccelerateNFC program, a mentor-driven, mentor-funded program focused on start-up companies in the NFC space. Using NFC as part of a mobile marketing strategy absolutely plays a role in loyalth program. I invite you to check the program out.

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