Today’s consumers are smarter, more empowered and better connected than ever before. With competitors only a few clicks away, few businesses are actually the “only game in town,” making it increasingly important — and challenging — for merchants to attract and retain customers.
The businesses that will come out on top are the ones that learn how to harness the power of mobile technology to attract and retain customers. Here are five tips, identified by Henry Helgeson, CEO of Merchant Warehouse, to get those customers coming through the door.
Click through for five tips to help attract and retain customers using mobile technology, as identified by Henry Helgeson, CEO of Merchant Warehouse.
In a world that is already moving rapidly toward mobile payment acceptance, it may come as a big surprise that 55 percent of the 15 million businesses in the U.S. still don’t take credit cards. The lack of credit card acceptance introduces significant friction to the sales process because it’s not easy for customers to pay with cash; most don’t even carry cash with them anymore. Not accepting credit results in approximately $100 billion in lost revenue each year. Businesses need to start accepting cash, credit and debit. While it’s true the credit card fees are a deterrent, the amount of business lost justifies shouldering this cost in order to provide customers with a better experience.
Another way to make it easy for customers to pay is to jump on board with mobile payment acceptance. In the second half of 2012, 95 percent of smartphones released were NFC-enabled. In real numbers, that means that 100 million handsets were shipped with NFC capabilities. This year, 285 million NFC handsets are expected to ship. While it will take some time for these capabilities to be put to full use in the market, other payment methods like QR codes allow for mobile-to-mobile acceptance that simplifies the hardware situation and gives merchants the option to start accepting mobile payments now with little upfront investment.
By removing friction from the sales process, merchants increase the likelihood of consumers completing the transaction. Whether this means incorporating credit cards or turning to mobile payment capabilities, your chance of moving consumers down the path to purchase increases.
Though attracting new customers is a big part of the success of any business, don’t overlook the loyal customers that keep coming back, because if you don’t treat them right, you make it very easy for competitors to steal them away. Retention of existing customers is crucial to continued success. It’s also more cost-effective to retain customers than to constantly be searching for new ones. According to Flowtown, acquiring a new customer is six times more costly than retaining a current one. Use mobile technologies to enhance your loyalty efforts and keep your current customers coming back.
Right now, there are approximately 18 different loyalty program memberships per household in the U.S., but only eight are actually used each year.
Let’s look at this from another perspective. In 2011, loyalty programs generated $300 million in revenue. This number is expected to reach $1.7 billion by 2017.
There is an incredible opportunity for businesses to boost profits while retaining existing customers through loyalty programs. Mobile technologies have made this even easier for merchants today as a result of the convergence of payments and marketing. This convergence gives merchants deeper insight into the purchasing behaviors of their customers, so they can deliver more targeted discounts, coupons and loyalty programs. Mobile capabilities also offer merchants the opportunity to push out mobile loyalty offers to drive new customers through the door.
Mobile payment acceptance is without a doubt a key asset for businesses since it is an easy option for consumers. In addition to using their phones to pay in-store, many consumers are buying items online, either via a browser or app, using their mobile devices. According to eMarketer, purchases made this way are expected to exceed $1 trillion by 2017. Businesses need to be prepared to accept payment both in-person and via their websites or apps to handle this method of payment. It’s the best way to ensure that customers don’t give their business to the competition instead.
Mobile has rapidly evolved into the next big marketing channel. In 2012, more than 821 million smartphones and tablets were purchased globally; more than one billion are expected to sell this year. eMarketer projects that, as a result of the significant upswing in mobile device ownership, mobile marketing will skyrocket by more than 400 percent in the next four years, estimating a $37 billion market by 2016.