⚡ Get All Content for 20% Off ⚡

'Mobile Wallets,' the Future of Loyalty Marketing Programs What are the benefits for business? And what lies ahead?

By Tami Cohorst

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock.com

"Mobile wallets" are steadily inching their way into the mainstream. With the technology now readily available -- and affordable -- and the stigma of security issues steadily fading, consumers are finally jumping on board.

Related: The Future of Mobile Payments Awaits Your Fingerprint

In the past year, approximately 28 percent of smartphone users actually made a mobile payment, and that number is only expected to grow.

But what many merchants don't realize is that mobile wallets can also be used as strategic marketing tools to help increase their bottom lines. The solution is in mobile loyalty programs.

After all, customers love loyalty programs. But they don't love carrying around a wad of plastic cards in their wallets. Cards are bulky and easily lost. So, if your business already offers a loyalty program -- or plans to implement one -- there's never been a better time to make the switch to mobile.

Benefits for businesses

The most obvious reason why merchants offer mobile loyalty programs is to give customers incentives to return to their businesses. But there are a number of other perks, too, including:

  • Increased sales -- Customer retention is always good for boosting the bottom line, but studies have shown that a mobile loyalty program can also boost extra sales among loyalty customers. Kohl's loyalty customers, for example, average two additional trips to the store and spend $80 more than nonloyalty customers over the course of a year.
  • Differentiation from the competition -- Loyalty programs are an excellent way to stand out from the crowd. And having a mobile loyalty program gives you an even bigger edge in the marketplace. Consider what your competitors are doing for their loyalty programs and figure out a way to make yours even better.
  • Cost savings – Mobile loyalty programs require less operational management than paper-based programs, and that advantage will ultimately lead to reduced operational costs.
  • Improved customer service – Consumers want their experiences to be enjoyable, and they want to feel valued. Loyalty programs help make both of these goals possible. They open the door for more communication between retailers and customers during checkout. And they give loyal customers rewards for their patronage, making them feel appreciated.

Related: The Future of Mobile Payments Awaits Your Fingerprint

The current landscape

Some merchants, like Starbucks, have already launched successful loyalty programs within their own store apps. The Starbucks app allows customers to load money onto their mobile accounts (like a revolving gift card), keep track of their rewards and make payments and use their rewards directly from their phones at checkout. And this is just the beginning of the integration of mobile wallets with loyalty programs.

Looking forward

Experts predict that the next step in mobile loyalty programs will be to integrate them with the front-runner mobile wallets, such as Apple Pay and Google Wallet. Up until this point, consumers have been forced to use mobile loyalty programs within each store's individual apps. In the near future, we can expect to see these mobile wallets begin to not only implement store loyalty programs, but ultimately become a platform for integrated, real-time marketing.

Related: Why It Might Make Sense to Pay Your Employees in Bitcoin (VIDEO)

Tami Cohorst

VP of Abtek

Tami Cohorst is the vice president of Abtek. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.