CellFire Gaining Traction With Coupons
Here is a short description about the company: Cellfire provides consumers with convenient discounts directly on their mobile phones. Cellfire is the first nationwide mobile coupon and discount offer service that allows consumers to easily access deals from brand-name merchants nationwide through their cell phone.
Since Cellfire and a few other companies in this space have sprung up, I have been a bit skeptical about coupons on the mobile phone. Some key issues are search and discovery, coupon presentment, and back-end remediation.
The search and discovery aspect is similar most mobile content and services. With such a small screen, finding the coupon you want is not as easy as opening a ValPak mailer or scanning the coupons that come with the Sunday newspaper. Click and scrolling and clicking with T9 can be rather cumbersome in comparison to a keyboard. Two other stumbling blocks include the latency of waiting for coupons to be retrieved and the second being the potential of not finding relevant coupons.
The next issue is coupon presentment. Once you have found the coupon, you need to present it the cashier at the checkout stand. So what do you do? Hand your phone to be scanned? How do you redeem multiple coupons? What if I am on the phone while I am in the check-out line? What if there is a problem? Can the cashier manually punch in the coupon?
The last issue is dealing with the back-end remediation. One of the big problems is trying to link the coupons on your phone with the system that will connect the POS system to discount the items *and* track the coupons back to the CPG company. This last bit seems trivial, but these systems are not exactly the easiest to integrate! Some side issues to combat are coupon fraud and poor tracking results.
In my meeting with Dwight Moore, VP Corporate Marketing at Cellfire, he told me that Cellfire has alleviated most of the issues listed above and has seen fairly impressive results.
Before I go into them, here is how Cellfire works:
1: Sign Up: Consumer can sign up by mobile phone by texting “cf” to 22888 or by going to www.cellfire.com
2. Select: Coupons are stored on your phone. Just pick the coupon you want to use and go to the store or restaurant and press the “Use Now” button
3. Save: Show the coupon code to the cashier for your discount and enjoy!
So how are they linking all the bits together? First off, they are creating a mobile application that sits on the device. Next, they are asking the user to log into the application which then links to a store loyalty card. The loyalty card is linked to the POS system which in turn, links to the retailer’s systems. The mobile app on the device stores the coupons like a shopping cart of discounts to apply upon checkout. Once the store loyalty card is swiped, the coupons are activated, deducted from the purchase total and redeemed and reports sent to the CPG.
What are the benefits? It allows coupon fraud to be virtually eliminated since the coupons can be audited through the system. This is estimated to be at 15% for all coupons for retail. In times of a recession, 67% of people tend to use coupons — but traditionally one of the downsides is remembering to bring them with you and/or having the correct coupon to match the specific item. It also allows for more direct and potentially immediate feedback since the response rates can be tracked all the way down to the consumer and their location.
Lastly, some initial results from Kroger retail grocery chain:
Advertisers have been slow to embrace online coupons due to fraud and security concerns, but with Cellfire mobile coupons, fraud and mal-redemption is less likely because redemption occurs digitally in a closed-loop. Advertisers also have complete control and can quickly present new coupons based on prior offer performance. They also gain unique shopper insight from aggregated redemption data that’s not available via other coupon distribution channels allowing them to better serve consumers.
“Mobile couponing is a winning initiative for us. Cell phones are always with the consumer and association with the grocer savings card makes it simple and convenient,” said Karl Schmidt, director of promotional marketing at General Mills. “Plus, mobile is an exciting new medium that extends our reach and influence to a younger generation of shoppers who are less inclined to clip coupons from newspapers, circulars, or direct mail.”
As food and gas prices continue to rise and the economy experiences slow growth, more consumers are re-discovering the value of coupons. CMS, a leading coupon processing agent for grocery brands, reported that Americans redeemed 2.6 billion manufacturers’ coupons in 2007, which is the first time in 16 years that coupon redemption remained constant instead of continuing it’s year-over-year decline. Mobile coupons now make these savings even more accessible.
Source: Cellfire
Coupons are not going away, if anything it’s only the beginning. Curious how this strategy will work for local business and the potential for just-in-time coupons based on mobile context? Only time will tell.
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