Stay loyal in a virtual world

Loyalty schemes are a very effective way of helping retailers distinguish their offering and generate repeat business, as well as gaining important information about customers.

Any retailer hoping to be around in five years’ time will need to have some form of scheme in place, but the traditional loyalty scheme – based around costly plastic cards and paper correspondence – is not the answer, warns David Tymm, chief executive of i-movo.

Instead, retailers looking to develop a compelling loyalty proposition need to embrace mobile, using customers’ phones to send and redeem vouchers, and verify transactions are genuine. “You can virtualise the loyalty scheme by removing the single most costly element of it, which is the production and distribution of cards and the use of paper as the way of communicating with members,” says Mr Tymm.

“You don’t need to know someone’s name or where they live to build up a very detailed picture of what they’re like as a shopper. It’s more important to be able to identify that an individual has a certain purchasing pattern.”

i-movo enables retailers to offer various loyalty-based elements to customers, including allowing them to present vouchers on their mobile phones at the point of sale or to verify that a transaction took place by matching the individual with a basket of goods using their mobile phone number.

“Vouchers cannot be used more times than intended by the issuer and may not be used after a promotion has finished or at the wrong location,” says Mr Tymm.

You can virtualise the loyalty scheme by removing the single most costly element of it – the production and distribution of cards and paper

Significantly, i-movo allows retailers to deploy mobile across their existing electronic point of sale (EPoS) systems using the same messaging infrastructure as debit and credit cards.

“This will work across any retail system, whereas every other approach requires some fairly deep-routed changes to either systems or payment terminals,” he explains. The product itself is patented in both the UK and US.

The system has already been successfully implemented with 16 Albanian retailers in the country’s first coalition loyalty scheme, operating across both relatively unsophisticated EPoS and payment-terminal configurations, and fully integrated retail systems at Vodafone.

Scottish and Borders retail chain Keystones has also rolled it out across 170 stores. Here, the retailer had no previous loyalty scheme in place, but has now effectively bypassed plastic cards altogether and developed a market-leading programme.

The business is using three channels – social media via Facebook, location-based marketing using Vouchercloud and SMS text messages to those who have opted to receive them – to deliver offers and vouchers to customers. The social media channel has proved particularly effective, with more than 50 per cent of people downloading vouchers from Facebook going on to redeem them in the store.

“No other company can do what we do, in the way we do,” says Mr Tymm. “Our method is easier to implement than other approaches for most retailers as it is based on standards common to retail and payment systems the world over. Implementing i-movo means a whole range of loyalty propositions can be developed. This is vital as there is no one-size-fits-all solution for customer loyalty.”

To find out more, contact i-movo on 0207 960 2570