Mobile Promotion

That’s the question that came to mind upon seeing an article today on eMarketer.com titled, “Email Still Driving Shopping over Social.”  The timing of the research reported in the article is interesting given this article we just posted to Technorati.

The business case for investing marketing dollars in social media is a work in progress, with the outcome likely similar to that described in the Technorati article.  Businesses simply need to close the loop on their social community marketing efforts by offering anyone interested the chance to participate in a promotional relationship with a brand or business.

The “viral coupons” cited in the eMarketer.com article don’t help foster closer individual relationships with customers.  A focus on customer service or preventing a public relations disaster certainly have value but long term those are just not meaningful contributors to revenue.

This isn’t to suggest “spamming” fans or followers with irrelevant messages – what it does suggest is that there are customers who express positive views of a business or influence others in positive ways that marketers focused on loyalty should attempt a one to one relationship with.

To do so, you need some identifying information, such as an email address or mobile number along with opt-in permission.  It’s really that simple.  Less simple is the system which monitors the social universe, detects and segments the audience and helps connect the loyalty marketer with those “socially loyal” customers who deserve special treatment.

As we have come to find, agencies are often at the mercy of the whims of their clients when it comes to mobile marketing.  Because of the perception – right or wrong – that a mobile campaign such as one featuring an SMS text message call to action is a single project with a limited life, the ultimate benefits of mobile never have a chance to accrue.  Those benefits include the ability to collect interaction data, often across  both SMS text message interactions as well as email and web, and create essentially a mobile datamart containing a goldmine of customer data that agencies often NEVER have access to.

As I blogged about recently, mobile technology firms have the potential to cut agencies out of the loop as more businesses become comfortable and able to work direct with point solution providers to execute their mobile marketing plans.

Why more agencies don’t adopt the viewpoint of mobile as a means of collecting data about their client’s customers, and use that insight as a basis to pitch new business, is beyond me.  Without much thought, imagine:

• Client wishes to employ a mobile sweepstakes as a novel means of driving interest in their products during a slow period.  Client measures an improvement in sales correlated to the client’s locations by virtue of collecting customer zip codes as part of the process.  This data could be obtained easily via SMS text message interaction or via a web form which feeds the same datamart.
• Result?  Value proven, but apparently many agency clients stop there.  Instead, imagine:
• Agency strategists analyze information captured during the promotion in the datamart and discover distinct segments of customers.  Entry into the promotion required customers to provide some very simple demographic and preference details such as gender, marital status, and product affinity.  The agency’s client is constantly striving to increase same store sales by creating offers and promotions that align with their targeted customer but these tend to be very broad brush efforts which often take the form of a mass media effort.
• Agency strategists pitch the idea to re-target the identifiable segments with “buy one/get one free” offers aligned with insights from the datamart.  Client wonders how redemption will happen at the point of sale, how value will be tracked.  Unable to currently capture these offer codes at the point of sale due to technical and operational limitations, the agency prescribes a novel solution – simply inform store managers to expect the offers to be presented and instruct cashiers to honor them.  Post promotion, month over month sales per location can be analyzed related to the distribution of the offers by zip code.  In this way, an indirect yet very strong correlation between the promotion and sale can be established.
• Result?  Value indirectly proven yet the client must certainly be happy having taken a data driven approach to marketing as opposed to a “pray and spray” mass media method.  The client also now has a good sense for its most engaged customers.  Having seen the power of mobile centric marketing, the client decides next to implement a loyalty rewards program:
• The client, now on board with the notion of mobile marketing, calls the agency team to create a loyalty program that initially targets customers by zip code where sales increased the most during the “buy one/get one free” promotion.  These customers are invited to join via SMS text message, and do so by visiting an online web form on the client’s website where more details about their preferences and interests are captured.  These in turn trigger unique initial offers designed to drive more frequent visits and greater market basket value based on business rules established (e.g. mother with two children gets offered product X, single guy age 25 gets offered product Y).  Wouldn’t you know it, but the client recently upgraded its POS systems and the field operations team is no longer averse to extending the checkout process with mobile offer code redemption.  Now, redemption by these very loyal customers can be tracked directly.
• The client advertises membership into the club on its website for anyone to join at a cost – the free offer was only extended to those who participated in the earlier promotion.  These new customers who pay to join, are similarly presented with offers aligned to their interests.

I could go on, but hopefully agency readers and their clients get the point.  Mobile marketing is not about a one-time campaign – it’s a unique opportunity to reach your customers with their personal devices in ways that drive sales and loyalty.  To take any other approach is wasteful, shortsighted, and spells death for any agency hoping to compete for mobile budgets.

As a follow up to several recent posts about the value of marketing to customers perpetually in the mobile channel, I thought it worth diagramming this value proposition visually to more clearly explain the concept.

The only realistic solution to the “one and done” approach to mobile widely reported, is to help mobile marketers actually learn something useful about their customers to more effectively engage them again in the future.  Having a strategy — prescribed by many in the agency community as key to ongoing usage — is but one piece of the puzzle.  The technology has to be “there” to enable marketers to make use of their initial investments in mobile to reap even greater rewards down the line.

This requires not only capturing data in line with mobile interactions, but providing the means of using such information in the ensuing execution of smarter and higher performing programs.  To that end, the Interactive Mediums Customer Engagement platform features many capabilities marketers might associate with traditional CRM technologies, including profiling, segmentation, personalization, event triggers, and data collection to include any attribute capturable during a text or online interaction.

The diagram included in line with this post illustrates the promotions roller coaster in a way that shows how capturing and re-using interaction data should improve targeted business outcomes over time — generally speaking, either increased sales lift or greater reach.  Nearly every business has revenue generation and increasing the pie of available customers as top line goals, and helping them achieve them is the driving force behind our Customer Engagement platform.

You hear it everywhere, Geofencing is on it’s way. SONIC, North Face, Old Navy, American Eagle & REI are said to be already embracing it.

Companies such as Placecast, Wavemarket, and Xtify are VC backed, and ready to power it in scalable ways.

The statistics make a marketers’ mouth water:

“Placecast has reported consumers reacted positively with 79 % saying these messages increased their likelihood to visit a store and 65% made a purchase as a result of a ShopAlerts message.”

The Starbucks example makes plenty of sense.

“Imagine the message as your walking to work past your favorite Starbucks location on the way to work, “Vanilla Latte half price until 10am!” If you take action on this coupon, it’s a win-win situation; both the customer & Starbucks are happy with the result.

You would think that this new technology would be an instant hit for the real estate industry, retail shopping, government services, & restaurants.  You would think that consumers would be excited about the opportunity to get deals sent to them from their favorite brands when they are already near shopping centers.

However, a very large portion of the feedback on blogs is coming from consumers who say they feel like this is another potential opportunity to be spammed & that it will surely negatively impact their relationship with the brands (see here).

Given the design of LBS mobile services, I would think consumers would only opt-in to brands they are truly interested in, and that those brands would act in a respectful manner.

The relationship should revolve around improve customer satisfaction, offering more relevant deals, & thus increasing sales.

If a brand says, “we can send you more relevant, highly contextual messages about deals, etc. if we know where you are.” Then users will have to decide for themselves whether it is worth participating.

From what I have read I disagree with the skeptics. I don’t cut out coupons, and at the same time I don’t like receiving Target Brand text coupons weeks before I am going to Target.  I know I would find convenience in receiving coffee coupons when I am near a coffee shop, and North-Face coupons when I am near a Northface & I would likely be one to opt-in.

Only time will tell how this extremely young industry develops, and what features are enhanced to ensure customer participation.  One thing is for sure, if companies like Wavemarket and Placecast are raising millions of dollars from VC backers, it might be worth betting on.

For more on this topic I recommend this article: http://www.mobileinc.co.uk/2009/12/why-location-based-couponingadvertising-wont-work-in-its-current-form/

For those interested in how it applies to real estate in more detail: http://www.softwareadvice.com/articles/property-management/searching-for-real-estate-made-easy-geo-fences-plus-mobile-phones-1030410/

As my colleague Ray Krueger likes to say “I loves me some corndogs,” I like to say I enjoy reading good editorial about happenings, trends and innovations in the mobile technology arena (sorry Ray, just popped into my head, I know you loves other things as well).  But when I read something a tad confusing, those examples stand out more so.  Such was the case in today’s MobileMarketer in an article titled, “Location data is helpful for survey-based consumer panels.”

Essentially a back/forth interview between a text messaging provider and MobileMarketer staff, the article attempts to convey the value of blending location-based data with data obtained from panel surveys often conducted by brands and market research firms to understand trends among targeted customers.  If you are not paying close attention, you might say “yep,” but think about this for a second and maybe like me you say “uh, yes,  but, you seem to be co-mingling several different ideas here:”

• First off, survey panel questions can include a request for geo details such as zip code or phone number area code, to connect survey data to location, so where is the mobile value add?
• Secondly, the article describes obtaining opt in permission from survey participants – which alone yields some pretty hard to believe benefits including “Increase the value of their marketing panels by having travel patterns, shopping preferences and lifestyle patterns, Strengthen value of existing customers by knowing proximity to stores and when they are likely to shop, Obtain competitive insights – consumer visits to competitive stores and how often, Use location as a media planning tool – armed with travel and work patterns, advertisers can create an optimal mix media mix.”

The article fails to prescribe exactly how benefits like these flow to brands and researchers.  Readers similarly confused would be wise to view their options as follows:

• Obtaining mobile opt in permission during panel surveys is a great idea but a plan of action for how to use that permission should be a key consideration.  What’s the goal — provide targeted offers or coupons, or pose follow up questions via multi question SMS text message survey capabilities like those offered by Interactive Mediums?  How does the researcher mitigate the risk of inaccurate answers from mobile survey participants?  One best practice is to present a call to action matched to survey response data that yields a relevancy-based offer (such as one based on age or product preference).  What if the client’s channel preference is email rather than mobile?
• Market researchers owe it to themselves to take advantage of mobile-enabled Crowd Sourcing, or the ability to attract an audience on demand to achieve their research goals.  It is becoming commonplace to promote a strong mobile call to action such as a sweepstakes across various media segmented by keyword in an effort to learn more about customers, including their location.  A text messaging survey instrument such as the one architected by Interactive Mediums offers a very flexible way of posing multiple questions in a single session and feeding these into a database for later retrieval and analysis using common tools like Excel.  Survey responses can be instantly segmented by mobile number area code, or to be more accurate, questions can be posed around zip code or home town location.

We’ve heard a lot of fodder that coupons sent directly to mobile devices are going to be the next big opportunity for CPG brands & retailers to ensure loyalty, but we have yet to find out what method of mobile couponing will emerge as the most effective.

Although, paper coupons, FSI’s, e-mailed & web-printed coupons represent the vast majority of coupons used, the transition to mobile is starting to unfold quickly. Currently CPG brands as well as retailers are deploying various types of mobile couponing programs to help fight the private label threat.

We have heard many reports of technologies being deployed that vary from a numeric code delivered via SMS text message through actual digitized bar codes that render on a mobile device for scanning at the point of sale.

Unfortunately these types of mobile coupons are often very laborious, and take too much time in the checkout lane. Delivering coupons via mobile or handheld device should represent a timesaving convenience for consumers, not add more steps to the money saving process.

The purpose of mobile couponing is indeed designed to eliminate the need for clipping and sorting, and help retailers & brands cuts costs on coupons that frequently head straight to the trash bin.

What we see at A&P and a few test market Krogers is different. It is a mobile couponing program that links directly to your loyalty card/account at the retailer.

This means all of those text codes, & screen capture bar codes can be eliminated. A customer can opt-in to receive SMS coupons on their mobile device, or browse a selection via application or mobile web, and when they find one they like, they just click save & it’s automatically saved to their loyalty card. Now when they are in Target this weekend they will get the deal on toilet paper just by scanning their card.

In this scenario, the consumer has received their savings in convenience, the retailer/CPG brand have sold a product through a targeted price-reduction approach, and cut the cost of one paper coupon in the process. Everybody wins.

This is exciting and the analytics & tracking capabilities will definitely make marketers happy. Only time will tell if this will emerge as the best shared practice, and how quickly this could be adopted industry wide.

Today on PromoMagazine.com an article titled, “Consumers Put Price First in Calculating Retail Loyalty: Colloquy” describes results from a wide ranging survey of consumer loyalty factors in retail categories such as grocery, personal care, mass merchandise, department store and specialty retail.  Unlike a year ago when customer service was considered a top element of loyalty, today price leads.  Walmart was thus identified as the loyalty “winner” across many of these categories.

Competing for customer loyalty strictly on price is a losing proposition unless you’re Walmart, who pairs with price the equally powerful message of value.  Both rule the day in a down economic climate:

“Our 2008 index showed that loyalty marketers worked within a significantly diffe5rent retail landscape,” Colloquy partner Kelly Hlavinka said in a release accompanying the latest research. “Customer service, store environment and a wide product selection were the underlying factors for customers’ self-professed loyalty [in the 2008 study.] But our 2010 index proves that the Great Recession became the great equalizer. Low prices have stepped up to become retail’s strongest loyalty lure, according to consumers.”

One of four recommended actions retailers should take is an especially strong fit with mobile engagement strategies such as text message promotions:

“Be data-driven, using loyalty programs to collect information that can make your communications, pricing and inventory more relevant to your best customers. Hlavinka points to the examples of Kroger and CVS as two brands using customer data effectively to win the loyalty contests in their categories and regions this year.”

With price the leading decision factor around loyalty, mobile comparison shopping enabled consumers need incentives to visit and remain in-store long enough to discourage leaving for a better deal elsewhere.  We’ve blogged recently about ways marketers can meet this challenge using mobile: 

• Marketers’ Priorities All Screwed Up with Respect to Loyalty
• Marketers Striving for Loyalty Should Make Mobile Engagement the Target
• Brand Marketers Break through the Engagement Barrier with Mobile Promotions

Just like mobile, investments in social media marketing are growing but quantifying the value of social can be a lot harder given its more subjective nature.  Yet, many forward thinking marketers are taking advantage of the popularity of social networks in line with quantifiable mobile interactions.  Dunkin Donuts is one such example highlighted in this March 26, 2010 post on the Digital CPG Blog.

Dunkin Donuts’ Twitter efforts:

“…include tracking customers that sign up for the company’s rewards programs and sweepstakes offers via Twitter, and assigning a dollar value to those customers that can then be tied to an actual ROI.”

The ease by which this is possible using solutions such as Interactive Mediums’ Customer Engagement Platform across SMS text messaging and the web makes these practices an essential component of any social media strategy.  As shown in the attached recent “Tweet” from the Dunkin Donuts Twitter page, broadcasting a contest to followers which incents them to purchase can also be used to collect valuable information about followers otherwise unavailable to marketers.  The opportunity for engagement encompasses both action (purchase) and knowledge (follower demographics).

In case you doubt the mobile nature of Twitter users or the value of understanding the audience, consider research into the Twitter user base:

“Since Twitter is pushed as a service that can (and should) be used from mobile phones, it also comes as no surprise that Twitter users are more likely (by fairly significant margins) to use their cell phones to go online and send text messages than the overall online population. In fact, Twitter users tend to use and consume all sorts of media more than the rest of the population; they’re more likely to read a newspaper on a smartphone, regular cell phone, and even online than everyone else, while “regular” Internet users are more likely to read a print newspaper. Twitter users are more engaged in blogging and reading other people’s blogs as well.”

Research into Twitter users from mulitple sources is consolidated in a post here, where it’s noted that: “Twitter are notoriously guarded about user information and Twitter usage statistics,” placing the onus on social media pros to develop creative ways of understanding their fans.

All retailers to varying degrees are dabbling in mobile couponing as a means of engaging their customers, driving foot traffic and ultimately selling more product.  The technologies employed vary from a numeric code delivered via SMS text message through actual digitized bar codes that render on a mobile device for scanning at the point of sale.

Each of these options today represents a compromise over traditional printed coupons that most point of sale systems recognize.  Coupon codes requiring manual entry lengthen checkout time and can be error prone while mobile device displays cannot always render codes compatible with POS scanners.

Despite these limitations, retailers are pressing forward to take advantage of the value presented by location-based marketing.  Yet to really unleash the value of mobile couponing, it must be ubiquitous and require a minimal change to retailer operational processes in order to be cost effective.  That’s the thought which came to mind when I read a February 19, 2010 item at DMNews.com, titled “Provision Interactive Technologies teams with Ping Mobile for in-store mobile campaigns.”

The article describes a new offering as follows:

“Marketers can create an out-of-home/mobile campaign in a mall, airport, stadium or other public venue, and consumers can respond to the call to action on the signage by texting in. Coupons, tickets, vouchers and other printed items then become available from Provision’s 3D Media Centers, which consumers can print the coupons at the kiosks and redeem.”

Rather than focus redemption around legacy POS systems, this approach represents a value added intermediary that could be positioned in retail environments in a standalone fashion – the quantity of stations limited only by space and budget.  The solution is described as optimal for “malls, airports and other public locations,” but should have equal or greater value when resident in a single retail environment — especially for large retailers with hundreds or thousands of locations unable to upgrade all POS systems en masse.

This solution also alleviates the need to worry about technology and compatibility issues, and focus instead on creative ways of engaging customers with the most relevant offers.  Interactive Mediums’ Customer Engagement Platform features a variety of pre-packaged engagement actions designed just for this purpose.

The news seems to be increasingly populated with stories about 2D or “quick response” codes used as mobile calls to action.  As this article points out today on MobileMarketer.com, “bar codes offer a shortcut to accessing mobile content, information and mobile commerce.”  Considering the simplistic analogy to a shortcut, it’s rather amazing Neustar is attempting to solve the reach/incompatibility problem of 2D codes and in so doing add a presumably high growth aspect to their business.

The article outlines how Visa used 2D bar code technology as part of a sweepstakes promotion conducted at the recent Mobile World Congress in Spain.  You can read the specifics but as we mentioned recently here and here, 2D bar codes tend to find the greatest success in highly localized and controlled environments where there is some certainty around consumer handsets capable of reading the codes.

What Neustar wishes to do is offer a “clearinghouse” service so marketers can employ 2D codes without restricting their potential audience.  They plan to do this by standardizing previously incompatible codes across devices and operating systems.  It sounds like a lot of work to enable consumers a “short cut” to redeem information on their mobile devices.

2D bar codes appeal to our visual nature and longtime experience with traditional bar codes such as those scanned at the grocery store.  These codes imply ease of use, as well as data — lots of data about who purchased what product and when.

Marketers considering building sweepstakes or other promotions around 2D bar codes like Visa should consider the ease by which consumers today text a keyword to a shortcode to redeem information or be pointed to a mobile website – the exact same use case as with a 2D bar code.  Not only are you assured universal reach but even more data about the consumer can be obtained since a text interaction is bi-directional and can include a question and answer component in real time.

Marketers should focus less on the technology employed to engage their customers, and more on creating a compelling message or incentive which calls their customers to action — and then evaluate options for packaging and delivering the offer.  Right now marketers appear blinded by the “sexiness” of 2D bar codes, and Neustar is betting a new line of business on it.