Cellphone in New Role: Loyalty Card

I read this article about the new frontier that smart phones are going. Phones and related companies and stores are trying to make virtual loyalty cards in phones. Loyalty cards reward loyal customers for things such as frequent visits and purchases. CardStar and CardBank are some companies that are starting to store loyalty cards on phones such as Motorola. Even several applications are beginning to use this concept. Applications such as Loopt and Foursquare are apps that reveal the users location. Now, Loopt and foursquare are beginning to incorporate rewards for people who frequently check in particular places. Making “checking into” apps and letting one’s friends know who they are have huge implications. First, it bridges the digital world into the real world. “It turns the tasks of everyday life, like buying coffee and running errands, into a game” This new concepts will make people more comfortable about revealing their location. Today, people are still reluctant to use applications that reveal their location. However, with these new additions to applications, people will have more incentive to “check into” certain locations.
Some companies that are involved in this new wave are Starbucks, Gap, and Burger King. Starbucks looks to reward customers that check in 15 times by giving them a free drink. On top of that, in some apps, users who check into facebook can become mayors. Mayors of a certain Starbucks location get one dollar off Frappuccinos. Burger King offers a soda with a sandwich purchase. Gap sends a 25 percent discount coupon after they check into a Gap store twice. This adds a new level of advertisement between the companies and the person. Instead of banners and quick adds on the phone, it allows for one-on-one real time marketing. It is a way to constantly connect a user and an advertisement and business together. These new waves of applications are making existing customers better customers. It also provides competition between the existing applications. Trends have shown that people enjoy the game and incentive aspects of the location revealing applications. Also, they know that sooner or later, the masses are going to pick one application to use. Therefore, the race to win over the public is intensifying. Another very interesting aspect to this new idea of checking in is being use by Stanford University. Stanford is using the reward system to reward graduating students who check into a certain number of school events. The reward is allows alumni to use Loopt to locate other fellow alumni.
I think that this new wave of reward base incentives is revolutionary. It is truly giving people a reason to check into and visit certain locations. Users are becoming better customers and they are bring given even more incentive to use and spend at certain locations. The economical aspect is extraordinary for both the advertising business and businesses that participate in this new application service. Also, I think that how Stanford is using this new idea of checking in and rewards is revolutionary as well. It gives schools a way to increase attendance and gives students who would otherwise not care a reason to attend school functions. If other schools and other institutions begin using this as a tool to increase attendance, it would become very successful. Finally, if this new wave does take off, it would mean so much to phone companies who sell the phones. It would just be another important reason to have smart phone that can “check in.”

http://www.nytimes.com/2010/06/01/technology/01loopt.html?bl

Paul Idos
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