Push or Pull Mobile Coupons?
By David Dorf on Apr 29, 2010
Mobile phones allow consumers to receive coupons in context, which increases their relevance and therefore redemption rates. Using your current location, you can get coupons that can be redeemed nearby for the things you want now. Receiving a coupon for something you wanted last week or something you might buy next month just isn't as valuable.
I previously talked about Placecast and their concept of pushing offers to mobile phones that transgress "geo-fences" around points of interest, like store locations. This push model is an automatic reminder there are good deals just up ahead.
This model works well in dense cities where people walk, but I question how effective it will be in the suburbs where people are driving. McDonald's recently ran a campaign in Finland where they pushed offers to GPS devices when cars neared their restaurants. Amazingly, they achieved a 7% click-through rate.But 8coupons.com sees things differently. They prefer the pull model that requires customers to initiate a search for nearby coupons, and they've done some studies to better understand what "nearby" means. It turns out that there are concentric search circles that emanate from your home and work. From inner to outer, people search for food, drink, shopping, and entertainment. Intuitively, that feels about right.
So the question is, do consumers prefer the push or pull model for offers? No doubt the market is big enough for both.
These days its not good enough to just know who your customers are -- you also need to know where they are so you can catch them in the right moment. According to Borrell Associates, redemption rates of mobile coupons are 10x that of traditional mail and newspaper coupons.
One thing is for sure; assuming 85% of consumers regularly spend money within 5 miles of home and work, location-based coupons make tons of sense.