December 16, 2011

Coming Your Way: Mobile Gift Cards in the Incentive Mix

They’re hot, hot, hot for holiday shoppers and they’re quickly heating up in the incentives space as well. They’re mobile gift cards and they are the latest entry to products marrying the rapid growth of smartphones with today’s “want it now” mindset. And they have a place in incentives and rewards programs, but need to be added strategically.

First, let’s look at what a mobile gift card (also called an “ecard”) is and where stands today. A mobile gift card (or ecard) can be purchased and delivered to the recipient through their mobile device as an email link, a text message, or social media (such as Facebook). The “card” might be a bar code on the recipient’s smartphone that the merchant would scan directly from the phone, it might be coupon that would need to printed out before use (since many merchants don’t have the technology for scanning those bar codes yet), or it might be a code that is input at the point of sale or on a website. (Source: Fox Business)

Starbucks is an early leader in the use of mobile gift cards. Users simply scan the Starbucks’ ecard bar code from their smartphone into a scanner at the counter. The app has been an immediate hit and Starbucks reported that within the first nine weeks of launch, the mobile “cards” were used more than three million times.  Overall, 84 percent of the U.S. population owns mobile devices, according to SNL Kagan Research. As for the people owning smartphones, Nielsen reports that they are generally young: more than two-thirds of smartphone owners are 25-34 years old, and among the next age cohort (35-54) 54 percent own smartphones. Android is the top operating system overall.

What does this mean for your incentives and rewards programs? Looking at the use of noncash awards, an Incentive Research Foundation (IRF) and Incentive Federation, Inc. (IFI) study of cash versus noncash awards found that 67 percent of companies in the study used gift cards in their noncash awards mix for both channel and employee programs. The Society for Human Resource Management (SHRM) published a story in HR Magazine (September 2010) that places mobile gift cards squarely in the mix of incentive and recognition programs. Delivering incentives via mobile is efficient (no more mailing plastic cards), cost-effective (reduced labor costs for fulfilling and shipping), and immediate (recipients don’t have to wait for their awards and, according to the Mobile Marketing Association, 91 percent of people with mobiles have them within reach 24/7). And there’s a strong reinforce factor: mobile incentives deliver a positive user experience and they tie the reward closer to the act they’re rewarding. Whether the reward is points, funds or certificates, delivering them electronically “means the participant has a virtual wallet on their smartphone,” says First Date VP Jim Contardi in the SHRM article.  Contardi sees mobile rewards as ideal for spot or micro awards.

Another possibility explored by the article, and already in the making, is integrating mobile rewards with social media. For example, companies could send awards from their company Facebook page and incorporate a high degree of personalization with video or text messaging. (Source: Incentive Marketing)

Despite obvious advantages and potential, including mobile gift cards into the incentive mix does have some drawbacks. First of all, you need to consider your recipients’ demographics. A younger age mix is far more likely to welcome mobile gift cards. And, don’t forget: employees will need to “opt in” to receive any rewards on their mobile device. Also consider that many people prefer the tangibility of a plastic card; it’s more “real” to them. Externally, consider the retailer. If the award is for use at a retailer, you may be limited simply because many retailers don’t have the technology in place to accept mobile. On the other hand, the Mobile Marketing Association (MMA) reports that 59 percent of “top retailers” want to enable mobile bar codes within the next year. There are also privacy issues. Be sure that you are operating within rules and regulations around use of employees’ mobile numbers.  The MMA has a complete set of best practices and you will want to work closely with legal counsel before launching a some types of mobile programs or make sure your outside provider is well versed in best practices. Finally, there may be technology issues. Different devices have different technologies and that could affect the execution of your program.

In an increasingly virtual world, and one that places high value on immediacy, mobile gift cards are experiencing explosive growth in the consumer world and are making their way into incentive programs, where they can add real value. As with any new program, think through your use of mobile awards before jumping on the bandwagon: Are they a good fit for recipients? How do they fit into your total program? Where do they fit in terms or who you are as a company and how you want to be perceived by your internal audiences? Do you have the resources—your own or an outside provider—to see that the technology is seamless? How will you measure success?

The possibilities for integrating mobile technology into rewards/recognition/incentives programs extend far beyond egift cards. Contest announcements, progress toward goals, awards notification and training tips can be delivered by mobile. Audio can carry inspiring messages and mobile video can deliver tutorials or product information. Texting is ideal for quick, personalized messages, pop quizzes, or even best practices reminders. Mobile has opened the door to a myriad of People Performance Management (PPM) opportunities. Are you ready to go there?

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