Using mobiles to build customer loyalty

As urban Indians, ideal targets for consumer product sellers, are getting hooked on to mobile telephony, smart companies are creating customer loyalty programmes for retailers using mobiles.

As  new customer acquisition is expensive, it costs between Rs 400 to Rs 600 per customer, retailers are finding that making existing customers come back for repeat purchases is much cheaper and rewarding.

Retailers are also finding that when 80 per cent of the customers do not like to fill up forms for the traditional card-based loyalty programmes, instant mobile loyalty solutions created by two companies: Bangalore-based Capillary and Noida-based MobiQuest, are better alternatives. These companies have created software products than can capture 100 per cent of the customer data at the point of sale and offer loyalty incentives using mobile phones.

Their sales pitch: it is time to interact directly with customers with tailor-made messages at the right time with a specific purpose. “Our customer relationship solutions allow brands and retailers to build a database of customers, capture information from each customer bill to identify, track and measure customer behaviour,” says Capillary co-founder and CEO Aneesh Reddy who sells two products, ‘In Touch’ and ‘True Touch’. “Using the database, a retailer can make various types of offers to customers like discount coupons and promotional ads, directly onto his mobile.” Capillary claims that it now works with 6,000 stores in India completing 3 million transactions in a month.


Mobile loyalty works in the following manner: A software is loaded onto each billing machine in a store once a retailer agrees, all customer data (name, age, product purchased and mobile number) is captured, stored, secured and uploaded to a server on the cloud and, depending on the marketing plan, offers can be sent instantly to customers’ mobile. If a customer buys two trousers, for example, a 10 per cent discount on each shirt can be offered instantly after the billing when the buyer is still in the store. Sharing his experience using Capillary’s product, Odyssey India Managing Director Ashwin T S says, “Instant gratification is a big benefit from the programme as the customer need not wait till his next visit to redeem the offer.”

Odyssey, a book and leisure store chain in Bangalore, has used mobile loyalty programmes from all its stores and in various forms. “We found that response from such programmes is good and hit rates, at times, go up to 5 per cent. This is possible because the promotions are used for targeted customers and with a specific purpose,” Ashwin said.

Another big player in mobile loyalty space is MobiQuest’s m’loyal which claims to have six mobile automation products, over 50 industry specific mobile solutions and already engaged 5 million customers in India. m’loyal has recently introduced mobile loyalty card, which, depending on the capability of the handset, provides immense information on accrued loyalty benefits to a customer through his mobile phone.

Says MobiQuest CEO Vineet Narang: “By using our software brands, one can track consumer purchase, repeat purchase, frequency of visit, items purchased and much more.” He claims that by using m’loyal, stores have seen discount coupon redemption going up to between 9 and 11 per cent from between 2 and 3 per cent under the conventional initiatives. Capillary is also seeing around 8 to 10 per cent customers redeem their discount offers, resulting in 4 to 5 per cent extra sales for the retailer.

Even shopping malls are using mobile loyalty as Delhi’s ‘Select Citywalk’ mall is using m’loyal to offer cash vouchers worth 10 per cent of the total spend a customer does inside the mall with any brand. The big advantage of mobile loyalty is that a retailer can precisely measure the benefit accrued and thereby, the return on investments after buying the solution. Also, by using business analytics a retailer can analyse customer purchase pattern, store performance, frequency of purchase etc, to create result-oriented marketing campaigns.

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