Marketers target cell phones to ring up sales

Amy Platt, a Syosset mom and founder of a parent resource website, looks forward to the day when all she needs is her cell phone.

"A lot of the time I run out and I don't bring my wallet, but I will grab my phone," said the president and founder of LI Parent Source. "I say I'd rather lose my wallet than lose my phone. If I could, I'd put all my credit cards on my phone."

Platt, 35 and a mother of two, is just the sort of consumer technology companies and retailers are hoping to target with new mobile reward and loyalty programs designed to entice them into their stores and shop.

Many consumers like Platt are open to the idea. About 30 percent of adults who are online at least once a month are interested in receiving discounts or coupons on their mobile phones, according to a 2009 survey from Forrester Research, a Cambridge, Mass.-based technology research company.

Rewards to promotions

These programs, many launched within the past year, range widely - from services that replace the plastic loyalty reward card with cell phone apps to texting potential customers with promotional offers. While retailers often offer these mobile deals for both online and physical store locations, many view them as an efficient way to send customers to their brick-and-mortar outlets and keep them coming back.

Consumers and the businesses developing these programs said spam is not an issue because the consumer decides whether to sign up and can opt out at any point.

"We are using phones for everything from comparing prices to actually being a part of a loyalty program," said Mike Gatti, executive director of the National Retail Federation's marketing division, discussing consumers' expanding use of their cell phones. "It's a completely new way of being able to market to customers."

In the early stages, these new mobile loyalty programs have provided encouraging results, say some businesses.

"It's more direct and more rewarding [than traditional advertising], and the benefits are incredible," said Andrew Zecher, general manager of the Woodbury Country Club.

He has been using WPTY-FM, JVC Broadcasting's "Party 105," to blast mobile texting promotions over the airwaves. He said he has scaled back print advertising and increased his use of mobile marketing as well as social networking sites such as Facebook, Twitter and YouTube.

"There is instant response and instant reservations. It's a way of zeroing in and making our money work better for us."

Marketing on radio, phone

Customers have sent text messages to the radio station in return for a text with codes for discounts, gift certificates or drink specials at Liquid, the country club's outdoor lounge.

"We are increasing customer sales by making radio interactive," said John Caracciolo, chief executive and president of Ronkonkoma-based JVC. "I am communicating on a two-way street for the first time. . . . and I am building a database."

Local chain Love My Shoes also has used text promotions, boosting traffic and sales, said owner Robert Yeganeh. In some cases the marketing has helped lift sales 15 percent on a slow weekday, he said.

"It can generate weekday business, which is normally 30 percent lower than the weekend business," Yeganeh said.

Consumers increasingly want more from their cell phone, and retailers are looking to tap into these new user habits. A National Retail Federation survey this year found that 41.5 percent of adults want a cell phone with Internet access, compared with 32.6 percent in 2008. And 42.6 percent want e-mail on the phones, compared with 22.5 percent in 2006.

And with so much online shopping, cell phone reward programs can be an efficient way to draw customers into the store, said Frank Riso, senior director of Motorola's retail and hospitality industry. Motorola's Enterprise Mobility Solutions division launched a service that can replace plastic loyalty cards and coupons with a cell phone app. As with existing loyalty card programs, retailers can use consumers' shopping information to send coupons and other offers targeted to buying habits, but with Motorola's service they send it directly to a customer's cell phone.

"The percentage of coupons redeemed from newspapers is somewhere between 1 and 3 percent on an annual basis," Riso said. "We are anticipating that offers on mobile phones will be higher."

Paying by phone

Starbucks, which has iPhone and iPod Touch apps that can add money to Starbucks cards, expanded its mobile payment feature so customers can pay by phone at its locations in Target stores.

Retailers are also turning to companies like Loopt, Gowalla and Foursquare that have created mobile apps allowing people to share their locations using their smart phones. Loopt's Loop Star allows retailers to offer rewards depending on how frequently a person checks into retail partners' stores.

"For a long time people have used the 'buy 10 times and get a sandwich free,' and nobody does that anymore," said Sam Altman, Loopt chief executive. "They want it on a cell phone, and they want it instantly."

For consumers like Allen Levy, 44, of East Meadow, it's a chance to get more free stuff.

Levy, a father of two and a computer consultant, receives text messages with promotional codes from the ShopText mobile service and from video retailers Red Box and Blockbuster, to name a few. His list of freebies includes expensive razors, diapers, doughnuts, Starbucks instant coffee, Zantax and toilet paper. He figures he's saved about $100 with these mobile offers over the past six months.

"There's money to be made," Levy said. "It may not be in your pocket, but you don't have to lay it out."

Signing up

Registering for mobile loyalty reward programs varies from company to company and sometimes is limited to certain types of phones.

Text-message codes

Services relying solely upon text-message codes can be used on any cell phone with text features. These programs usually require the consumer to text-message a word to the provider in return for a promotional code.

Bar codes

Programs like Motorola's Loyalty Solution require the customer to sign up online or text-message a short code. Users then receive a cell phone application that comes with a bar code. That bar code is the digital version of the typical plastic reward card. Similar services, like CardStar, also allow customers to download bar codes for their existing loyalty memberships to their smart phones. The consumer controls whether he or she receives messages for offers and can opt out of these programs at any time.

Hang out and shop

Most of the location-sharing applications can only be used on specific smart phones. Loopt Star, for instance, is only accessible right now to iPhone users. Other location-sharing services such as Gowalla and Foursquare can only be used with Apple's iPhone and Android, BlackBerry and Palm devices. Users of these location applications earn badges and titles based on how often they check into a venue. Retailers can offer rewards for checking in.

"Someone who is checking in at that moment in many ways is saying, 'This is where I am,' " said Josh Williams, Gowalla co-founder and chief executive. "Give me a surprise."

On Loopt Star, Gap offers a 25 percent discount for customers who check in twice to their stores.

Universal Music Group also is giving away music downloads for those who check into a bar with two friends on Loopt Star.

Those who check in with Gowalla at any Best Buy store could win one of 500 Eye-Fi cards - wireless memory cards that allow users to upload photos and videos to computers or sharing sites. Even if they don't win, Gowalla users who buy an Eye-Fi card get a code providing them with a year's free access to wireless hot spots.

- Keiko Morris