How your mobile payment app can cost you customers and ding your reputation

How your mobile payment app can cost you customers and ding your reputation

Without a thoughtful approach to user experience, staff training and enticing loyalty incentives, brand apps are doomed to failure.

By Ronald Herman, CEO and founder of Sionic Mobile

A popular restaurant chain grabbed headlines earlier this year with the launch of its mobile payments application. It happens to be a chain that I visit on occasion, so I decided to download the app and try paying with my phone on my next visit. Once I downloaded the correct app (this particular chain has more than one app in the app store), I followed the steps to create an account, linked a credit card and loaded the minimum $25.00 in the app – at least I thought I loaded $25.00, but the sliding keypad feature caused me to accidentally load $75.00.  I’ll save the experience of requesting and eventually receiving the $50.00 refund for another time.

Now with the correct amount, $25.00, in my account, I visited the nearest location, ordered a meal and notified the cashier I would be paying with their new mobile app.  I expected to encounter some issues as the technology was new (for this chain.). What I didn’t expect was the front-line employee to be completely unaware of the new payment option and even more disturbing, share her frustration with me as the customer.

By the time the manager was located and informed I was paying with my phone, the process was easy and my purchase completed with just a few taps. From download to first payment, the process was frustrating and anything but convenient. I explored the app further and realized that in addition to the cumbersome load and use process, the only other incentive or value offered was to inform me the featured item of the week contained 940 calories.  Needless to say, I deleted the app that evening.  After multiple phone call attempts to customer service to refund my account balance (could never get an answer on the 24-hour customer service hotline), I now have $20.00 floating in cyberspace.

Mobile payment/loyalty apps have been heralded as the future of retail promising consumers a faster, more convenient and secure checkout experience. The intense competitive pressures have heightened the sense of urgency for restaurant chains to quickly launch a mobile app, and the result is hundreds of standalone apps that are lackluster at best, less convenient than traditional payment methods and are often vulnerable to security breaches and fraudulent activity.

The amount of resources and money required to develop, deploy and maintain a standalone app is a staggering investment for most restaurant operators, and the majority yield very little if any return.  To date, there are literally thousands of mobile apps claiming to have a payment or loyalty component. This number continues to rise, so cutting through the noise and actually reaching the target audience is extremely difficult. Even with success in gaining downloads, research indicates that 95 percent of apps are deleted within the first 30 days. With more than 75 percent of Americans now using a smartphone, the mobile channel is a vital customer touchpoint, but the current standalone strategy is proving ineffective at building brand loyalty or increasing customer acquisition numbers.

An alternative approach, a singular, consolidated mobile platform, is quickly emerging as a preferred strategy both by consumers and merchants alike. The key to success is ensuring the platform is built around customer engagement, combining robust loyalty offerings with mobile payment options. Having the ability to send relevant/tailored promotions, rewarding  users with instant incentives and finally, providing industry-proven security thresholds to protect both the user and restaurant from fraudulent activity are critical components of a successful shared platform. Leveraging a consolidated platform enables operators to focus on what they do best, running restaurants, yet still connect with customers and guests via the mobile channel.


Today’s consumer demands a seamless mobile experience, and failing to meet those expectations can be devastating to a brand. Experts agree mobile-driven loyalty will be critical in garnering consumer adoption of mobile apps. The QSR chain I described above recently announced it had completely re-designed and re-launched its mobile payments app due to the overwhelmingly negative feedback and response it received from its customers. Unfortunately, the chain faces an uphill battle to re-gain the confidence of consumers. Fortunately, the rest of the industry has the unique opportunity to learn from their growing pains, and avoid making the same costly mistakes. At the end of the day I may have lost $20.00, but it cost the QSR chain much more. They missed the opportunity to convert an occasional diner into a loyal customer.

Ronald Herman is CEO and founder of Atlanta-based Sionic Mobile, the maker and provider of ION Rewards and ION Loyalty applications. Herman has more than 25 years of experience (ranging from early-stage start-ups to Fortune 500 companies) in developing and deploying consumer-facing technology solutions.

Image courtesy of magic_quote via Flickr. See license.

Topics: Marketing / Branding / Promotion, Mobile Payments, Online / Mobile / Social, Staffing & Training

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