Mobile SMS Vouchers - Choosing a Mechanic
Promotional Redeemable SMS and MMS Mobile Vouchers - A Retail Incentive
Mobile Vouchers are an exciting new opportunity for push marketing to consumers and increasing footfall in retail establishments. There are a variety of factors that influence the choice of mechanic for delivery and redemption of vouchers at the Point of Sale.
A successful Mobile Voucher scheme must be easily adopted and understood by consumers and sales staff, but at the same time provide Management Information. It is usually required that the scheme avoids consumer fraud and constraints in terms of time to implement and cost must be taken into account, particularly during a proof of concept trial.
Once the broad principle of how a mobile voucher scheme is to operate, X-on can provide further consultancy and Systems Integration support, if needed, and tune the business process and technical requirements.
General Requirements
Consumer Acceptability
All Mobile Voucher schemes must be easily understood by the consumer. They should appreciate the purpose of the SMS or MMS that they are receiving and how they should redeem it.
It is important that the consumer does not believe that they have been charged for the message, given the heightened suspicions in the market raised by unscrupulous premium rate operators.
The content of messages is therefore important, though this is not covered in detail within this document and examples are purely illustrative.
Management at Point of Sale
All Mobile Voucher schemes will involve the introduction of some procedures at the point of sale, and a level of staff training that varies with the chosen mechanic. The retailer must be aware of the scope of these requirements.
Specific Requirements
Fraud / Re-use Prevention
In a limited number of promotions, the retailer may consider the re-use of a discount voucher may not be a commercial risk, since the promotion is still increasing the amount of custom. However, a discount should have a defined end period to be permissible, and should relate to a normal sale price. This could lead to problems where a voucher had no restrictions on circulation.
In most cases, a voucher should have a limited validity and be non-transferable to avoid being devalued. A voucher that can be subject to unlimited viral distribution through forwarding an SMS or MMS, for example, can create serious problems. There are technical solutions that put strong or medium obstacles in the way of voucher distribution.
Management Information / CRM
In nearly all cases, measuring the effectiveness of the promotion will be essential. Multi outlet retailers will need to identify at which store the redemption has taken place.
More sophisticated reporting structures can identify the exact source and content of the most effective call to action, including the time to respond and distance traveled.
The level of data required will have an influence on the technical solution employed.
Time and Cost Constraints
System Integration
System Integration with Electronic Point of Sale (EPOS) systems is a resource intensive task and will often make the practicalities of small scale trials difficult to achieve. The levels of integration required vary from none to intensive, depending on the mechanic used and specific requirements detailed above.
EPOS Hardware
Vouchers that consist of a barcode image on a mobile (MMS) which requires scanning at the POS must be tested in the target environment. Only some scanners are compatible with mobile devices and not necessarily all due to image rescaling during MMS rendering. The technology has currently only been proven effective in closed environments, where at the least the scanner used has been tested.
A solution which uses a mobile at the POS to confirm redemption is described below and this adds to the site cost, while reducing the System Integration and training requirements.
Cost of Messages
The cost of SMS and MMS messages sent to the consumer must be factored in, except in the case where a mobile operator is providing the solution and able to provide zero cost messages.
There is a marginal cost to the consumer in responding to SMS messages where the mechanic requires this. This can also be eliminated by providing a zero MO cost short-code, for example, although in practical terms free bundles of SMS mean there is unlikely to be consumer objection to sending a text at 'standard network rates'.
Device Limitations / Demographics
SMS v MMS v Voice
Taking the UK Market, for example, virtually all devices have the ability to receive and send SMS messages. The proportion of devices that are both capable and enabled to receive MMS is rapidly changing and estimates range from 45 - 70% (36% at January 2005), however MMS still account for less than 1% of the total SMS traffic of 6 billion (UK 2007).
It is likely that the demographic of users comfortable with receiving and acting on MMS is younger (sub 30) but no figures are available to demonstrate this. The corresponding position with SMS is less defined, with many older adopters.
SMS reliability is generally considerably higher than MMS but still short of the reliability of a voice call. X-on's experience with MMS over several years operation has demonstrated relatively long periods of service degradation including delays and non-delivery.
MMS services must be evaluated in each target country. SMS is now generally available globally, however pricing structures and regulatory compliance mean that this must be considered on a per country basis, and particular in the USA where restrictions on commercial use apply.
Device Limitations
Certain mobiles which have the ability to receive MMS messages can not be used to produce barcodes capable of being scanned, due to rescaling of images or other display limitations.
Mobile Voucher Mechanic Options
Mechanic 1: MMS Barcode
Description
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The consumer is sent an MMS message containing a barcode that represents a voucher. This will be unique for each consumer.
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The consumer's phone is scanned at the EPOS and the code represents a free item or discount. An element represents the particular voucher number. |
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The voucher is flagged as 'used' within the EPOS system. |
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Data on voucher redemption is passed from the EPOS system to the Mobile Voucher provider for consolidation. |
Benefits and Overheads
| Basic System | Fraud Prevention | Management Data | |
| Consumer Ease of Use | Easy | ||
| Consumer Penetration | Limitation on mobile device suitability | ||
| POS Ease of Use | Easy - limited training requirement | ||
| POS Hardware Requirement | May require scanner replacement/upgrade | ||
| EPOS System Integration | High | High - synchronization between branches required for redeemed vouchers | High |
Summary
MMS barcodes provide a very convenient mechanism for voucher delivery and redemption, however at a high cost in terms of system integration at the retailer.
There are some limitations in mobile devices that can cause problems.
The cost of MMS is currently considerably higher than SMS which may be an issue.
It is likely that the technology of MMS barcodes will become replaced by NFC (Near Field Communication) mobile devices as these become more widely available.
Mechanic 2: SMS Exchange
Description
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The consumer is sent an SMS message containing a message that tells them they have a voucher.
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The consumer visits the retail outlet where they are instructed to respond to the SMS with a displayed codeword.
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The consumer receives a code that is valid for the codeword and outlet that can be quoted at the POS to receive the discount. The code will have a limited validity.
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Benefits and Overheads
| Basic System | Fraud Prevention | Management Data | |
| Consumer Ease of Use | Moderately easy - needs to follow instructions | ||
| Consumer Penetration | High | ||
| POS Ease of Use | Moderately Easy - limited training requirement to check valid codes | ||
| POS Hardware Requirement | None | ||
| EPOS System Integration | None | None unless separate tracking of redemption required or control over code validity within EPOS | None - provided by Service Provider |
Summary
SMS Exchange removes the requirement to provide any EPOS integration. SMS is a more familiar media to consumers than MMS and cheaper to send.
The retailer has responsibility to display a codeword which is used in identifying the outlet at which the redemption occurred and voiding the voucher.
Potential delays within the SMS network may cause issues in which case an optional voice call can be made (described below) as backup.
SMS Exchange is low cost to implement.
Mechanic 3: SMS Exchange + Retailer Mobile
This works as Mechanic 2 except that the confirmation SMS is delivered to a mobile hosted at the point of sale.
Description
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The consumer is sent an SMS message containing a message that tells them they have a voucher.
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The consumer visits the retail outlet where they are instructed to respond to the SMS with a displayed codeword.
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The retailer receives an SMS (maybe with distinctive audible alarm) confirming the consumer has a discount voucher.
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Benefits and Overheads
| Basic System | Fraud Prevention | Management Data | |
| Consumer Ease of Use | Moderately easy - needs to follow instructions | ||
| Consumer Penetration | High | ||
| POS Ease of Use | Easy | ||
| POS Hardware Requirement | Mobile required at each POS | ||
| EPOS System Integration | None | None unless separate tracking of redemption required or control over code validity within EPOS | None - provided by Service Provider |
Summary
This method puts a device into the retailer to confirm the consumer has a valid voucher. It makes the process of redemption simpler for consumer and retailer. It requires no system integration.
However, it will be more difficult to administer in a retail environment with multiple POS. There are additional costs involved with the hardware and risk of theft. There is also a housekeeping requirement to delete SMS from the mobile 'terminal'.
Mechanic 4: SMS and Voice Call
This works as Mechanic 2 except that the confirmation SMS is delivered to a mobile hosted at the point of sale.
Description
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The consumer is sent an SMS message containing a message that tells them they have a voucher.
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The consumer visits the retail outlet where they are instructed to make a call back to the number from which the SMS originated.
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The IVR answers and asks them to enter a code provided by the retailer or displayed by the till.
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The IVR responds with a valid discount code that confirms that the voucher was valid and voids it.
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Benefits and Overheads
| Basic System | Fraud Prevention | Management Data | |
| Consumer Ease of Use | Moderately easy - needs to follow instructions | ||
| Consumer Penetration | High | ||
| POS Ease of Use | Moderately Easy – limited training requirement to check valid codes | ||
| POS Hardware Requirement | None | ||
| EPOS System Integration | None | None unless separate tracking of redemption required or control over code validity within EPOS | None - provided by Service Provider |
Summary
The use of a voice call at the POS is the most reliable method of confirming the voucher without costly system integration.
There is some requirement for training of the retailer in order for them to provide an outlet code. The combination of outlet code, mobile CLI and (optionally) dial in number can uniquely identify the voucher, consumer and redemption point and time for purposes of management information.
For further information on X-on SMS Voucher please use our Contact Form, or call Sales on 0870 345 5577.
