The wireless industry is putting its customers on commission.
In an effort to retain customers and drive uptake, content providers and software developers are employing customer-retention programs designed to encourage users to recommend games, music or other content to friends. Recommendations resulting in sales bring points that can be “cashed in” toward purchases of other content.
Think of it as viral marketing with incentives, said John Barron, product marketing manager for Irish developer NewBay Software. NewBay is targeting carriers with FoneShare, a Web-based content sharing application that allows members to create clubs of like-minded users.
After a subscriber plays a game, for instance, he could be prompted to recommend it to fellow members of the club. The original subscriber earns points for every friend who buys the game. In a wireless twist on the multi-level marketing concept, each one of those members would then be prompted to recommend the game to other friends.
“The whole idea behind the product is the power of personal recommendations,” Barron said. “If you get a recommendation from a friend, you’re much more likely to buy. If you buy based on that recommendation, (the recommending user) receives points.”
What’s more, a recommended title from a trusted friend eliminates the hassles of dealing with carriers’ game decks. Decks grow increasingly cumbersome with each new gaming title, often requiring a dozen “clicks” or more from users to access a desired piece of content. A recommended title, meanwhile, can be had with a simple click or two.
“One thing end users were telling us is that they found it difficult to find content, because there’s so much of it on carriers’ decks,” said Barron. With FoneShare, it makes it easy for the user to find the content they want through clubs-through personalized and systematic recommendations.
M7 Networks added a similar feature to its mobile gaming community earlier this year. The Game Lobby, a forum for users with Sprint PCS, allows gamers to chat, post high scores and play in tournaments. The loyalty program rewards revenue-generating gamers who are active in the community by maintaining buddy lists, posting game reviews and recommendations, and downloading titles.
The frequent-player program doesn’t just help drive sales, according to M7 Chief Executive Officer William Erickson, it gives insights as to who’s playing and what games are generating interest, providing “very focused and granular” information. The key, said Erickson, is getting hardcore gamers to become active in creating the communities.
“That is a golden customer,” Erickson said of the most active mobile players, “and (with a loyalty program) I can find them very easily.”
Others are embracing the idea, as well. Sennari, a Los Angeles-based mobile marketing company, recently raised more than $2 million in funding from investors due to its plan to use loyalty programs to create mobile communities and reduce churn.
Publisher InfoSpace is also eyeing the concept to drive players to its tournament-based games. An upcoming program will reward active gamers regardless of ability as well as those who get other players involved.
“You don’t have to win (to get points); it’s not game-specific,” said Andy Reid, vice president of game production of InfoSpace. “The more you play, the more you win.”
While the industry continues to grapple with ways to market content to users, though, the effectiveness of loyalty campaigns is far from clear. A 2000 study of 1,200 online consumers from Jupiter Communications found that such efforts were largely ineffectual. Only 22 percent of shoppers viewed such programs as incentives to purchase, according to the study-substantially fewer than those citing factors like customer service, product selection and simple return policies.
But while affinity programs may have yet to gain traction among consumers, they’ve certainly caught the attention of the wireless industry. And as digital rights management issues allow for “super-distribution”-the protected transfer of files from one user to another-such efforts will likely be expanded to include ringtones, video clips and other content.
For loyalty programs to succeed in the mobile space, NewBay’s Barron said, carriers and content providers will have to make clear to customers what they are and how to take advantage of them.
“What we’re seeing is that it’s different for different people,” Barron said. “What we’re finding is that there’s a little education required in terms of explaining to customers how to use this site.”
