Mobile payments aren’t just a cost-efficient tool that allows customers to pay with a debit or credit card. They empower small and mid-size businesses to offer meaningful benefits that customers value — many of which were historically available only to large corporations with significant infrastructures and financial resources. Here’s a look at why and how mobile payments can serve as a customer acquisition and retention tool that directly impacts the bottom line.
Mobile is a technology consumers trust.
Americans have adopted mobile devices into their lives at an astonishing rate. In 2011, the Pew Research Internet Project revealed that 35 percent of Americans had a smartphone. Today, nearly 61 percent of Americans are smartphone owners. Aside from ownership, consumers have formed an astounding reliance on mobile devices. An IDC Research report based on more than 7,000 responses revealed that nearly 80 percent of smartphone users carry their mobile device on their person for “all but up to 2 hours of their waking day.”
In essence, smartphones aren’t phones, but miniature traveling computers that facilitate daily life, acting as alarm clocks, personal organizers, workout buddies, communication tools and research devices that consumers trust to find information, gather public feedback — and make purchases. Supporting that notion, a separate survey by IDC Financial Insights revealed that 40 percent of respondents have used some form of mobile payment in the past year. As that trend continues, businesses that incorporate mobile payments into their operations demonstrate that they understand their customers, and value the customer relationship by adapting their payment technology to accommodate changing mobile preferences and behaviors.
Recognize and reward repeat customers.
Studies repeatedly indicate that customers like to be rewarded and recognized for their patronage. That sentiment was echoed in the IDC Financial Insights study by nearly three-quarters of respondents, who said that the ability to earn rewards plays a key role in the type of payment method they choose. Mobile payments provide a complimentary transition any size of business can leverage to establish and nurture customer loyalty. For example, rewards programs can easily be linked to an identifying email address customers may use to complete a mobile payment transaction. Additionally, businesses may choose to deliver special loyalty-based offers via the customer’s mobile device, or at the point of mobile checkout.
Consumers want instant gratification.
An increasing reliance on mobile devices and instant connectivity tends to extend to heightened consumer expectations for immediate results from the businesses with which they interact. Regardless of the amount of money a business invests into attracting customers and building relationships, a long checkout line or delayed online experience can result abandoned sales, and the potential total loss of a customer relationship.
In an online sales environment, it’s estimated that nearly half of all consumers expect a page to load in two seconds or less. The expectation is no less stringent in a physical storefront or face-to-face transaction, particularly in regards to customer perception. For example, Duke University researchers have found that consumers are likely to abandon a purchase when they see a checkout line they consider to be too long — even if the actual checkout process is quite efficient.
Mobile payments allow businesses to create the perception of “on-demand” service. By arming floor sales staff with mobile devices, every member of the team has the capability to complete customer purchases, at the exact time and place the customer wishes to check out. (Similarly, mobile point-of-sale devices affixed in a place of business can empower the customer to check out with the help of a salesperson.) In addition to increasing the return on investment a business achieves from the fact that every employee is equipped to make sales with a mobile device, there may indeed be a measurable impact on revenue: When Nordstrom introduced a mobile POS system in its operations in 2011, Forbes reported that its quarterly sales (year over year) increased more than 15 percent.
Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm, and also serves on its Board of Directors. She has years of experience within the mobile payment industry, working with CEOs and other executives to see if mobile payments would work properly in their businesses.