April 15, 2014, 4:05 PM

A new mobile messaging app combines communication with commerce

In addition to enabling users to communicate for free (and in secret code) via instant messages, the Cyfr app targets users with deals based on keywords in their chats and their GPS locations. But watch out: That message might self-destruct in 5…4…3…

Lead Photo

A screenshot of the Cyfr app

Standard mobile shopping apps are already passé for many younger consumers, says Chicago mobile technology company iLyngo LLC. Rather than lose the youth vote, it built an app called Cyfr that combines fun instant messaging features—the app allows users to create secret codes that only their friends can translate—with mobile commerce by displaying personalized deals to its users based on the keywords in their chats and their GPS locations. For example, if a consumer is on the bus and replies to a friend’s Cyfr message about going to the beach with, “Yes, but I need a beach towel,” the app could show her a deal for 15% off a beach towel at a nearby store.

By pairing mobile commerce with mobile messaging, iLyngo expects to ride the rising wave of popularity among consumers ages 15-27 for such instant messaging apps as WhatsApp—recently acquired by Facebook for $19 billion—and Snapchat, says iLyngo chief marketing officer Robert Medinger. “Instant messaging is a hot market,” he says, and one he expects will grow rapidly over the next three to five years.

Given the commercial possibilities, e-commerce companies also are getting in on the action. Rakuten Inc., the Japanese company that owns online marketplaces in several countries, for instance, purchased mobile chat and app platform provider Viber Media Inc. for $900 million in February.

Cyfr’s name, shorthand for “decipher,” reflects its main chatting feature. A consumer can create her own set of shorthand words, a language of saved meanings that only her Cyfr contacts can translate, which they do by tapping on the message. Cyfr also offers features similar to other popular mobile messaging apps, such as the ability for messages to “self-destruct”—a la Snapchat, or, for older folks, the TV show “Mission: Impossible”—or for users to attach multiple photos to a message or chat in groups. These are capabilities of several mobile messaging apps, including Facebook’s WhatsApp.

Consumers also earn points for every action they take in Cyfr, such as creating a new code word or sending a hidden message, Medinger says. Today, that’s just for fun, but eventually consumers will be able to redeem those points to access discounts from retailers through the app, he says. For now, Cyfr displays offers only from mobile deal aggregator Spotzot. The deals appear in a special section of the app, where they are arranged top to bottom in order of relevancy to a consumer, based on the keywords in her chats. When a consumer clicks on a deal, she is taken out of the app and to Spotzot’s mobile web site.

Later the app will also enable a retailer to send push notifications to offer her more timely deals, for instance, as she walks by a store selling something she just said she needs, Medinger says. The retailer will be able to decide where to direct a shopper after she taps Redeem, perhaps to download a coupon she must present in a store, or to a mobile product page to buy an item right away.

Cyfr is signing up retailers to offer deals through the app now, aiming for a big public debut this summer. Parent company iLyngo will earn money by taking a commission for each offer redeemed through Cyfr, Medinger he says. Today, it receives payments from Spotzot for each click it generates for the deal aggregator, he says. Once many retailers are using the app, Medinger says he envisions allowing them to bid on offer placements, perhaps by proximity to consumers or by the keywords used to target them.

Although the company hasn’t mounted a big marketing push, a few thousand curious consumers have come across the app and downloaded it on their own in the last several weeks, he says. They are clicking on the deals without any prompting, he adds, without giving details.

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