THE MARKETING MOBILE REVOLUTION AND THE BIZUM CASE

Technology continues to advance at great speed, and with it, mobile applications are becoming more and more powerful in today's world. In Spain there are more than 26 million operational mobile phones and more than 2,700 new Apps are launched every day. In like manner, more than 4 million downloads of mobile applications are made per day.

According to a Statista study, it is confirmed that approximately 70% of online shoppers in Spain made purchases from their mobile devices during 2020. This figure represented an increase of three percentage points with respect to the proportion registered the previous year and also meant, the highest percentage of the last seven years.

Statista 2 July 2021 Users who made purchases through mobile devices in Spain 2014-2020

 

Due to this phenomenon, we could say that Apps are one of the most important advances in the history of technology, since it is integrated into our lives and its use has completely transformed human relationships. For this reason, more and more brands decide to emerge in this world and grow as a company at a technological level. We also realize that more and more people trust their devices by depositing their bank details there to make purchases and transactions.

With this data, we should analyze one of the cases that have been heard the most in the last years, which is related to one of the most important strategies in digital marketing, called “Marketing Mobile”. 

This is defined as all those actions and marketing strategies designed and directed for mobile devices. The advantages of this type of strategy are mainly proximity (users spend most of their time with the mobile device nearby), immediacy (messages arrive in real time), better loyalty and the ease of measuring and analyzing results.

Mobile marketing is even more important in the Covid-19 era. Though in-store shopping has declined, many shoppers still visit stores. According to Selligent research, 35% of shoppers mix both in-person and online shopping, and 36% still shop more in person than online. So, there’s a great opportunity to reach potential customers with time-based, location-based and personalized messages.

The following example explains how a simple App can make such big changes in society and can make more than 60 companies change completely their business model. 

 

THE BIZUM CASE

If you've ever had to share a dinner or some kind of expense, you've probably heard of the phrase “send me a Bizum”. At least in Spain this sentence has become the day to day for many people and what it is behind it is a project that basically consists of transferring money between people through a mobile application for free.

In just a few years, Bizum has achieved almost 17 million active users and aims to become the digital payment method by excellence in Europe. The question is, how has Bizum managed to convince millions of Spaniards to use its payment method? And, how does this application make money if it is free?

In 2016 something historic happened, for the first time, 95% of the banks operating in Spain agreed to launch a common service. In total, 26 financial entities created the company that owns Bizum.

The value of Bizum increases the more people use it and this is very important when it comes to a free service, because it means that the users themselves are responsible for promoting this service through word of mouth. Imagine that you go to dinner with your friends and you have to pay the bill together, the simplest thing is going to be for one person to pay for dinner and the rest to make Bizum, however, if you are the only person who does not have Bizum, your friends will encourage you to sign up.

The answer to how Bizum makes money if it is completely free is due to its business model. If the end user does not pay for the service, someone will have to do it, and in this case, it is the banks themselves. Bizum charges banks a fee for providing the service and the banks decide whether to charge their customers for using it. Anyway, if Bizum ceases to be free, its value will plummet, since it is based on network economies, monetizing its service without slowing its growth.

In fact, in the case of Bizum, it is the banks themselves who are in charge of promoting it and offering all kinds of incentives for you to use it. For example, Santander bank, on many occasions, has given users 5€ just for registering with Bizum. Surely this strategy sounds familiar to you, because other similar platforms such as PayPal grew like foam thanks to giving away money. It is logical, since if you calculate that the cost of acquiring a new client by paying television, newspapers or Facebook is € 10-15 for acquiring a client, if you give € 5, it is assumed as a marketing cost and therefore is a very good strategy.

And you may wonder, why are banks so interested in you using this service? Why are they willing to lose money? The executive director of Bizum said this "one of our objectives is to displace cash, which is very expensive to manage", since in Spain, almost 50% of payments are in cash, and this is a problem for banks, so they are willing to accelerate digitization at all costs.

According to the official Bizum site, nowadays there are more than 17 million “Bizumers” and there has been more than 370 million operations since their launch. These are some of the data that they have shared with us:

475.000

18M €

4.550

21.900

250M €

32.700M €

38€

648.000.000

Personally, it seems to me that companies in the financial sector have known how to adapt to this new digital era, because they have been aware that smartphones have become one of the most essential elements in everyone's life and banks have decided to be part of Bizum. Moreover, mobile marketing is essential today since all applications let us know information about consumers and thus companies know how to better target their potential or current customers. We must also highlight all the strategies used by Bizum to create this complete and functional App, since they have managed to satisfy the needs not only of customers, but also of the companies that work with them.

 

 

Bibliography:

Anonymous. (May 7th 2019). La revolución de las apps. Multiatlas. https://www.comercios-electronicos.com/2019/05/07/la-revolucion-de-las-apps/

García, P. (March 5th 2021). ¿Qué es el mobile marketing?. FunkyMarketing. https://www.funkymk.com/que-es-el-mobile-marketing/

Orús, A. (July 2 2021). Porcentaje de usuarios que realizaron compras a través de dispositivos móviles en España entre 2014 y 2020. Statista https://es.statista.com/estadisticas/872927/porcentaje-de-usuarios-que-realizaron-compras-por-dispositivos-moviles/

EmprendeAprendiendo. (August 5 2021). ¿Por qué Bizum es gratis? Caso Bizum. YouTube https://www.youtube.com/watch?v=vsnWPjVGItE

Genchur, N. (October 27th, 2020). 5 powerful Mobile Marketing Strategies to drive foot traffic to your store. Groundtruth https://www.groundtruth.com/insight/mobile-marketing-strategies-and-tools/

Datos sobre Bizum. Bizum España Official Site  https://bizum.es/datos/