How Apple Passbook affects your Loyalty Program

When Apple announced its new Passbook feature with the new iPhone5 and iOS6, it was obvious that it was going to have an unprecedented impact on the way loyalty programs and mobile phones play together, especially considering the sheer scale of the Apple iPhone/iOS universe.

The One Passbook To Rule Them All: Apple has created a central repository where all of a customer’s loyalty cards, tickets, and boarding passes can reside, and make it very easy to find them, and use them at the cash registers. The Passbook is not a stored value card – and Apple has not followed Google and others on the NFC Bandwagon. This could be due to security flaws found in most NFC implementations, but also for the additional complexity of hardware that can read NFC. Basic information is available on the front of the passbook, but more information can be seen on the back by tapping the information button. Terms and Conditions can also be maintained and accessed easily.

Loyalty Cards: Your Customers can now download your own loyalty cards from a link they receive from any mode of communication (Email, Text, Social) right onto their iPhone. The layout of the card can be customized based on Apple’s specifications, including the pictures, colors, and the fields that are shown on the front and the back.

Coupons and Offers: Individual Passbook cards can also be created for Coupons and Special Offers/Gift Cards apart from Loyalty Points. The same can be downloaded from a link, and redeemed through a barcode or QR Code.

Push Notifications: Once downloaded, points and other details can be updated through push notifications enabling far greater engagement – the moment a customer gets more points, they will get a notification, and they even view updated information about their program, or get a notification when there’s an offer for them etc.

Geo-Fencing: Passbook automatically maintains a set of locations most relevant to a particular card, and it surfaces up when you cross one of those locations. This virtual location awareness is called “geo-fencing” – and is become quite popular as a way to excite customers to come into the stores with special offers when they are around. Due to the prevalence of iPhone, it is expected that Passbook could easily be the most common geo-fencing application.

Unprecedented Engagement: Most retail mobile applications see far less engagement than we would like – and Passbook will change that. It is automatically available for all iOS 6 (iPhone 3GS and above). The fact that there are an estimated 7 Million iPhone devices active in the U.S. alone will have a tremendous impact on its adoption and engagement.

The obvious implications for retailers is that, the now quintessential iPhone will evolve into a key component of their loyalty/customer engagement strategy. This strategy will be driven by ‘Social’, ‘Local’ and with the last mile delivery, over ‘Mobile’ – and the prevalence of the iPhone will mean that this will happen at a scale not seen before.

Apple Passbook integration is already available with Capillary at no additional cost.

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Kapil Raj has been writing about consumer behaviour, consumer businesses and technology in the fintech and IT space.