The Benefits of Mobile Wallets for Parking, Part III
In part 1 and part 2 of the mobile wallet series we touched on the direct financial benefits to the operator and the user of the wallet, including the merchant processing savings and the interest on the carry held in the wallet accounts. We also touched on the types of wallet designs - namely the operator wallet (closed loop) versus the provider wallet (open loop). If you missed those articles, I recommend you check them out in the links provided as they explain the most important benefits to using mobile wallets.
In the final part of this series I’d like to talk about the use of the wallet as a loyalty rewards conduit and as a ‘hook’. Both ideas focus on retaining customers by increasing the costs of leaving your platform. (Note: As an aside and a complementary topic, I’ve been reading the book ‘Hooked’ by Nir Eyal. Much of what he discusses in this consumer psychology book would apply to what we will be covering here. I highly recommend it.)
While creating a customer loyalty program does not require a wallet based payment system, I would argue that the wallet based system makes creating a loyalty program easier. For one, the wallet saves the operator money which creates an unallocated funding source that can be used to fund a new loyalty program. In addition to monetary reasons, the wallet also pairs nicely with loyalty programs by supplying a conduit for awarding loyalty points. “Park with us 20 times and we’ll add $10 to your wallet account!”. Or “Refer a friend and you’ll both get $20 in your parking wallets.”
Easy enough, right? Let’s work through an example to show how this would work in practice.
Parking with Roger and George
Let’s take the second loyalty example above where participants in a referral program both receive $20 in their parking wallets for their participation and apply it to two users: Roger and George. Roger is a regular parker with ACME parking. He signed up for their loyalty program and their wallet because he loves that he gets discounted parking by being a regular parker with them. Plus, the lot is close to his work. George works with Roger and parks with a different operator near their offices. This morning Roger parked with his Passport Mobile Pay app and received the alert outlined above: “Refer a friend and you’ll both get $20 in your parking wallets.” Boom! Roger just figured out how to grow that wallet of his by getting George to join. By convincing George to join, Roger not only saved them both money on parking but also increased ACME’s parking customer base by one.
As time goes by, both Roger and George deplete their wallets to $4. But, low and behold, it takes $8 to park for the day with ACME. They are left with the choice of whether or not to refresh their wallets or likely throw away their remaining $4 (they can actually force ACME to refund that $4 in nearly every instance according to government regulation, but these two are like most of us and they won’t bother). They both decide to add $20 to their accounts and continue on as they go.
They both also bypass parking with other operators in the area because they don’t want to lose the rest of their wallet after their switch. In the end, this creates two long-term customers for ACME and, on a broader scale, locks out incoming operators - proving that wallets are a great business tool for keeping your parking customers ‘hooked’.
It should also be noted that outside of the monetary reason for the parker’s decisions there are also habit effects in place. George and Roger park in the same lot each and every day and walk the same streets. They probably also dip into the same coffee shop every day on their way to work too. George and Roger like their routines and they don’t want to change them. Like George and Roger, other users of the wallet develop routines that are hard to change. The effect of habit development creates a powerful psychological benefit in addition to the obvious monetary benefits of continued use of the wallet.
There are many other benefits to the wallet, but the goal of this series was to outline the major reasons to provide a wallet to your parking customers. I believe that by implementing wallets for your parking operations you will save money and increase customer adoption and loyalty. If you have any questions about wallets or you want to start providing them at your facility, please contact me and I’d be glad to discuss the concept further and help you get your wallet program set up.
Thank you all for reading about wallets. I hope the articles were of some use to you.
I’d also like to give special thanks to Ben Winokur, who played a significant role in the building of this series.