Mobile And Consumer Data Tracking: 6 Reasons Why It Will Shape The Future Of Business

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By guest writerKristen Gramigna

Businesses have been tracking consumer behavior in many ways in hopes of customizing their shopping experience for future transactions. Aided by the proliferation of smart devices and payment apps, businesses and their customers are embracing mobile payments as a convenient alternative to traditional point-of-sale (POS) systems. For businesses, this is an opportunity to generate a lot of revenues. The following paragraphs will explain why.

The Facebook-WhatsApp deal: A prime example

For a prevalent example, look no further than the world of social media. The social media app WhatsApp was recently purchased by a company with a name that you may recognize — Facebook. What’s the big deal? For one, the price tag was a hefty $19 billion, making it Facebook’s largest acquisition. Even more staggering, the Facebook-WhatsApp deal is bigger than any deal ever made by Microsoft, Apple or Google.

Why did Facebook deem WhatsApp, an app that simply lets users send messages and photos for free (at least for the first year), worth that much? WhatsApp currently boasts 450 million monthly active users in five years, about three times as many Facebook had in its first five years. Of those users, 70 percent send messages daily. This represents a huge pool of customers and a huge source of useful trend-tracking data. As it turns out, a large amount of messages are more valuable in tracking than just status updates. So then, why is a wealth of mobile data-tracking resources worth so much to companies like Facebook? The following paragraphs will explain why.

1. Consumer tracking enhances Marketing Strategy

The ability to read the market, understand consumer behavior and predict trends ahead of the competition are the cornerstones of successful marketing efforts. Technology has provided new and better ways to conduct market research. Marketers are keen on using whatever technology is at their fingertips to track consumer behavior, and in the process, define their ideal customer profile. By tracking consumer behavior, sales and marketing resources can be optimized to improve promotional efforts and boost business viability.

2. Traditional POS Systems are limited when tracking behavior

Traditional payment systems attempt to track consumer behavior to a limited extent. For instance, ZIP codes and phone numbers are often requested as customers complete their transactions at checkout registers. Tracking ZIP codes allows businesses to target their advertising and promotional efforts to certain geographic areas. Beyond that, however, businesses are unable to tap into the wealth of consumer data generated as customers finalize their transactions.

3. Mobile Payments Are Data Rich

Consumer data generated through mobile payments is much more detailed, timely and relevant. With the use of analytics, this information becomes a gold mine that can yield patterns such as specific business hours when particular product lines appear to be popular. Knowing minute details of purchasing patterns will allow businesses to tailor their marketing efforts more closely to customer needs.

4. Customer Experience is improved

Digitized information available from mobile payments is more easily analyzed, interpreted and turned into useful metrics for improving the customer’s shopping experience. Sophisticated analytics can track shopping patterns in brick-and-mortar and online stores. Visitor totals at any given time, browsing patterns and buying triggers can be gleaned from information linked to mobile devices.

5. Mobile Payments Can Be Geocoded

Global positioning systems (GPS) are typically embedded in mobile devices. Device-based geocoding is an opt-in feature. However, certain apps, if downloaded and allowed by the device user, will identify the location of the customer, making it possible for businesses to target their promotional efforts in real time and to a specific demographic who are more likely to respond positively.

6. Subtler Profiling

Aggressively tracking customers can backfire. Using methods such as Wi-Fi fingerprinting or using the microelectronic chips embedded in mobile devices can be viewed as overstepping the boundary between businesses and customers. Privacy and security concerns may cause customers to flee when they realize that their information is being tracked, even if they routinely announce their plans and activities on social media. Behavior tracking through mobile payment data is more subtle and less intrusive, considering that consumers have voluntarily provided the information as part of the business transaction.

The Outlook for Mobile Payments

There is a lot of excitement as mobile payment methods gain traction among consumers and businesses. Mobile devices and applications create a seamless shopping experience. Plus, the millennial generation is twice more likely than older shoppers to embrace mobile payments, which is good news for businesses targeting this demographic. Worldwide, mobile payment solutions will continue to ramp up, sustaining the 55 percent year-over-year growth recorded between 2012 and 2013.

Kristen Gramigna is Chief Marketing Officer for BluePay, a payment processer that helps all types of businesses accept payments with Ipads and other mobile devices. She brings more than 15 years of experience in the bankcard industry in direct sales, sales management, and marketing to the company and also serves on its Board of Directors.

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