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 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.

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.

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/

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.

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.

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

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.

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 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.

Those benefits include ease of interaction; simply point your camera-equipped device at a code to have information immediately presented and/or be pointed to a website.  In localized programs outside the U.S. 2D bar codes have proven successful.  However, as pointed out in this very good post, standardization among devices and software (or more accurately, a lack of it) is a gating factor to widespread accessibility by consumers in the U.S.

“…2D barcodes…are pretty cool solutions for specific applications, such as mobile airline boarding passes or advanced inventory management, but not exactly the best of what’s out there for mobile consumer marketing in today’s rapidly changing world of mobile media and brand interaction.  The name of the game is to get as many high-quality customer interactions and conversation engagements as possible with your targeted demographic.  Severely limiting the potential response pool by applying restrictions will simply decrease the success of the campaign.”

Articles like this on ChiefMarketer.com present a different picture that marketers would be wise to balance against the facts on the ground.

The universal nature of SMS text messaging has created an impression that mobile marketing can access anyone, anytime and anywhere but until technologies like 2D bar codes and augmented reality are as “standardized” as SMS, text messaging will remain the defacto method of reaching as many of your target demographic as possible.

In the meantime, hybrid services requiring a consumer to snap a photo and send it via MMS are emerging that ultimately lack the instant gratification of real 2D codes and the universal nature of SMS.  Marketers be warned.

With competition for mobile consumer mindshare reaching a fever pitch, marketers will increasingly face an engagement barrier, even around SMS text message programs.  To break through and achieve their objectives, marketers should evaluate offerings such as Interactive Mediums’ multi-channel mobile customer engagement platform.

“…a pilot SMS reminder solution…ended with unprecedented results – saving Kaiser nearly $150 per appointment and over $275,000 at a single clinic.”

Efficiencies and costs savings were at the heart of the value in this example, which is apparently driving consumer acceptance of text message alerts – the post’s title is after all, “Survey: Consumers Want SMS Alerts.”  The study was conducted in the U.K., but you can expect similar attitudes prevail in the U.S.

While these numbers are impressive, I would argue that marketers need to keep their eyes on the top line/revenue growth “yin” to the cost savings/efficiencies “yang” offered by text messaging.  That’s the theme behind the diagram included in line with this post.

As marketers in any segment – healthcare or otherwise – approach the mobile channel, they have a variety of options for getting started, as we have previously discussed around mapping strategy to the mobile channel.

Many organizations will approach text messaging from a non-marketing perspective, which can yield impressive cost savings and efficiencies among an entire customer base – which tends to be dominated by customers served at a loss or break-even.  Thus the utility of text messaging as a cost saver.

Those companies that leverage mobile marketing techniques in a parallel fashion to target the revenue side of business should experience even greater results by increasing the pool of highest value customers – the 20 or so percent which generate the greatest value, be it profits or revenue.  The key to unlocking that added value is employing mobile engagement techniques such as promotions and others that call consumers to action.

The article doesn’t call this out per se, but does strongly imply that engaging in-store strategies such as SMS text message promotions are an absolute necessity to address the potential threat to retailers offered by comparison enabled mobile shoppers:

“…when it comes to consumers, nearly 65% acquired information about the programs in retail environments at the point of sale, compared to only 2.8% who did so on social media networks.”

The article is based on results of a study released today by the Chief Marketing Officer Council and conducted by IBM and Ricoh.  Its key finding is that although marketers are focusing spend on social networks to communicate loyalty programs, consumers are unreceptive to this channel as opposed to strong calls to action in and around the point of sale.

A similar focus on email marketing is also cited as a disconnect between marketer priories and consumer preferences.  Speaking of preferences, relevancy is found to be at the core of effective loyalty programs regardless of how an offer is delivered.  Certainly, data is crucial to developing targeted offers, the kind of which can be efficiently collected also via text message programs such as customer surveys.

Marketers need to as well be aware that even relevant offers may struggle against the tide of comparison shopping enabled consumers expected to change the retail landscape this year and beyond.  Successful retailers will build relevancy into their loyalty programs, but also recognize that engagement strategies such as SMS text message promotions advertised in store can prevent customers from leaving for better deals, addressing key challenges threatening to make loyalty a mythical concept.

The survey finds product recommendations accessible via mobile devices as a huge opportunity for retailers, with 65 percent of those surveyed saying they would make purchases were it easier to find products of interest.  Retailers heeding this advice will implement mobile-accessible product reviews and recommendations based on factors such as real time inputs by a consumer (looking for a plasma screen TV, what are my options?) and historical transaction data if available (purchased TV in the past, suggest a DVD player).

A potential battleground retailers need to keep eyes on is the mobile product reviews/recommendations/comparison space.  On one hand, retailers can develop branded mobile experiences for their customers that are essentially “closed” environments by virtue of product selection limited to that one retailer.  Combined with clever engagement strategies such as mobile promotions, this can effectively combat third parties that aggregate product information, prices and reviews across retailers.

These services could render retail store environments as mere “pick up” spots for products browsed, reviewed, and compared by mobile shoppers.  The retail sector may be in store for a complete shift in power unless mobile engagement strategies rise to the top of marketing plans and priorities.

Both attendees and exhibitors alike were apparently personally armed with the devices and reportedly had either iPhone apps already in the market or were preparing them.  Large technology vendors in attendance also had iPhone apps to talk about, from Oracle and Sterling Commerce to Intel.  Funny that Apple itself was absent.

The observations reported in the article highlight just how powerful a marketing platform the iPhone has become yet retailers should not forget about text messaging as an effective mobile marketing method that can reach almost any mobile phone user.  Although applications are popular, engagement via text messaging is being used by retailers to overcome challenges around loyalty and comparison shopping behavior.

The best strategy is a balanced one considering the impact but lower reach of a rich smartphone application as opposed to the almost universal reach offered by SMS text messaging, especially those facilitating promotions such as sweepstakes and contests.  Targeting the mobile customer experience first, then determining the blend of approaches to achieve your goals is becoming the standard of excellence for successful mobile marketers.

This January 7, 2009 post on MobileMarketingWatch.com describes an offering by a new company called JagTag that offers a very similar service to SnapTag (which we blogged about here back in October of 2009).

These services appeal to marketer’s fears about the limited reach of smartphones capable of reading bar codes.  This is due to the somewhat real issue of handsets often needing special software to interpret the codes.  When marketers think about bar codes on mobile devices, they should break down the options as follows:

• As a coupon delivery and redeeming method.
• As a replacement for plastic cards (like your grocery store loyalty or video store cards).
• As a means of communicating information and/or pointing consumers to rich mobile interactions.

What Jag and Snap Tags do is imply that by using relatively ubiquitous MMS-enabled camera phones, consumers can be called to action as follows: take a picture of a code, send it via MMS, then receive of something of value – pointers to websites, a text message, offer, coupon code, etc.

I fail to see how this adds value to an interaction in the mobile channel versus even more common SMS text messaging.  The only case I can identify is when a brand wants to create an arguably fun activity for a consumer whereby they have a chance to use the camera feature/MMS sending capability of their phone.  That is a very weak scenario in my view.

Although it doesn’t say so, this post yesterday on eMarketer.com suggests that providing incentives designed to keep your mobile savvy customers in store is closely tied to ensuring they don’t bail and visit another store for a better deal:

“The threat comes from in-store shoppers using their phones to check sales prices at other retailers.  Compete found that 41% of iPhone users and 43% of Android users do just that.”

“You could argue that every retailer on the planet is an off-balance-sheet showroom for Amazon.  So if you go into a retailer’s store and you see something you like—type in that manufacturer’s SKU number and check the price on Amazon. You’ve looked at it, you’ve touched it, felt it, and now you’re getting the benefit of potentially getting the best price on it too.”

To meet this challenge, the post recommends “A retailer’s best defense for maintaining customer loyalty is to develop a mobile offering that allows in-store shoppers access to customer reviews and other product information on its Website.   This is where the opportunity lies for retailers.  By providing mobile access to their extensive online product information, they help customers feel more comfortable about making a purchase.”

This is a logical recommendation, yet it will not prevent price sensitive, mobile enabled customers from comparison shopping and potentially leaving the store.  It also ignores reseach suggesting that loyalty not be the target, but rather engagement.

To keep customers in-store and increase the probability of purchase, retailers should build engagement strategies into their mobile plans such as text message promotions like sweepstakes and other contests.

Consumers value their time as much as their money, which is why many are excited at the prospect of instantly performing a price comparison quickly then moving onto another store.  Retailers who create engaging mobile programs that keep customers in-store such as promotions lessen the likelihood that they will take the time to visit another store.

The pace of innovation in mobile and urgency to begin engaging customers in mobile interactions demands we pay attention to news of the day.  More importantly is that we have a relevant point of view.  Hello Mobile! is our forum for communicating these views.  Others are listening as well, such as MobileMarketer.com which today recognized our article “9 Steps for SMS Marketing” among the “Top 15 industry-expert columns of 2009.”

As 2010 begins, look for further insights, commentaries and directives from our blog.  Before we look forward though, here are the top 10 most popular posts of 2009 – I wonder what this list will look like next year, the key trends and topics?  Stay tuned.

• Is Apple the Mobile Walmart?
• The Key to Mobile Customer Data
• Acxiom Clients Seeking a Differentiated Mobile Offering Should Look Elsewhere
• Advice to Marketers: Don’t Confuse Mobile Advertising with Mobile Marketing (or Active Customer Engagement)
• Establishment Converges on Active Customer Engagement
• Lessons From Less Than Successful Mobile Apps
• Thankfully, More about Active Customer Engagement
• Vendor Lines Blurring but One Thing is Clear: Active Customer Engagement
• Insight into Apple’s App Store approval process
• Best in Class Marketers to Focus on Customer Engagement in 2010

The article concludes with this statement, making it sound as if retailers attempting to create engaging shopping experiences raise their hands in surrender:

“Consumers will care less about where they shop and more about satisfying their purchase requirements.”

I bet you could find similar statements made about 10 years ago around how e-commerce websites would put brick and mortar stores out of business.  Yet that didn’t really happen, as brick and mortar stores such as BestBuy and others created complementary online stores.  Late to game retailers like Toys R Us paid a heavy price, however.  Why would it be any different if consumers can research and compare products while “on the go?”

One way the article suggests is that retailers will be forced to match lower prices if consumers can prove it by showing their mobile device to a cashier, or worse lose the sale as the customer leaves for another store.  Loyalty, already so hard to engender among customers, is literally out the door as a means of creating a steady flow of business.

In reality, I don’t think the situation will be this dire, but retail marketers have a new mandate to create engaging shopper environments to encourage customers to remain in store and make purchases.  Especially for considered purchases versus impulse buys, consumers will likely perform online research in advance of venturing out to stores.  Items such as plasma screen TVs or washing machines, for example.  In these instances it’s highly improbable a consumer will even perform a comparison price lookup in store because they did so already.

There will be exceptions, but I just don’t see retailers hurt too much by this trend, especially if they work hard toward creating highly engaging – and branded – mobile experiences for their customers.  Those who do will be more akin to the BestBuys of the mobile realm as opposed to the Toys R Us’.

While that sounds like a terrific step or opportunity for consulting firms, as I point out in a comment on the post I don’t see many marketers taking advantage of APIs to this end.  Instead, I see:

• Marketers partaking in mobile advertising across multiple networks without any expectation at resolving the metrics across them, at least not at first.  All forecasts predict that mobile advertising will explode in the next few years, suggesting marketers are either unconcerned or unaware of the issues described in the blog post.
• Because marketers generally are drawn to mobile because it is among the most trackable and accountable channels, they soon may bump into the metrics integration issue.  Those marketers who do will fall into two camps: those who lack the resources or business case for integration regardless of API availability and those who will integrate because mobile advertising directly supports sales.

Let me explain: Many businesses utilize mobile advertising for awareness, branding and demand generation.  If resolving metrics across networks becomes an issue, I expect many marketers to narrow their network partners to one or two that offer access to the most targeted group of potential customers – to undertake an integration exercise is simply not worth the effort.  Other businesses that can drive sales via mobile transactions, however, will find it imperative to integrate metrics and tie these back to sales since the advertising directly supports the business.

With awareness/branding and demand generation representing arguably the largest mobile ad market opportunity, it suggests that mobile networks as a segment will narrow to 1-3 leaders with others either acquired or rendered irrelevant.  Thus, pretty quickly a consistent view of mobile ad metrics should happen almost automatically.

When it comes to engaging customers in the mobile channel, there is a strong analogy.  A single system which allows marketing objectives to be tailored to the mobile channel, executed and tracked, should be high on marketers’ priority lists in 2010.

Technology-wise, I am talking about SMS text messaging, mobile optimized websites, mobile applications, mobile email and social media.  In practice, marketers enabled with a solution that stitches each of these together will have a significant advantage over those who don’t.

For example, imagine engaging your customers via SMS text messaging, let them forward the invitation response to their Twitter followers, send text responders a thank you email, point them to a mobile website to redeem a coupon or to download a mobile application designed for their handset to enhance the shopping experience.  And, track this activity across all these mobile channels in a single system that easily integrates with the only system that matters — the one registering sales.

Instead, marketers need to consider ways of driving consumption of their products across all kinds of customers, be they classified loyal or not, in the most efficient manner available. SMS text message sweepstakes contests promoted at and around the point of sale, and offering many rewards versus one, are a proven tactic that could be packaged and presented to customers as a loyalty program.

Such promotions can be executed quickly and largely in “hands off” mode for the marketer when using a mobile campaign management system like that offered by Interactive Mediums. That benefit came to mind as I came across additional research into customer loyalty that underscores the importance of an effective engagement strategy, more so than one designed to create “loyal” customers, who many in fact be a mythical concept. Consider the following from an article titled, “The 30 major factors behind a successful customer loyalty programme,” from TheWiseMarketer.com (registration required):

Focus on data value, not just repeat business: “The smarter operators used loyalty programmes not to buy repeat visits but to garner information from their customers in order to learn more about them: who their most profitable and least profitable customers were, what they wanted, and what changes or offerings would be most likely to make them truly loyal.”

Spend more time on engagement strategy, less on selling to customers you don’t want: “In Philip Kotler’s version of a Pareto Principle chart, the top 20% of customers generate 80% of the profits, while the bottom 30% of customers eat up 50% of the profits that the others produce.”

Paradoxically, attempting to sell to past customers is a distracting exercise: “Customer win-back expert Michael Lowenstein (of Harris Interactive) says that the success rate in approaching ‘lost’ customers can be three to four times as high as it is when prospecting for new customers. For example, the rate for converting prospects might typically be 5%, while that for reactivating inactive customers might be as high as 15% – 20%.”

These are just three of 30 different points, but were especially notable given the fit with mobile marketing tactics such as sweepstakes promotions. Interactive Mediums’ Customer Engagement Platform has powered effective promotions for many marketers who didn’t likely approach the project with the facts in hand regarding loyalty.

Marketers yet to embrace mobile marketing tactics such as sweepstakes as part of a broader engagement strategy need to get started now; because if you don’t your competition will, making it that much harder to break through the engagement barrier.

In 2006, Budweiser partnered with Interactive Mediums to power a similar SMS text message sweepstakes at the point of sale.  As both established and smaller brands alike take their initial steps into mobile marketing, sweepstakes are a proven approach to engaging customers in the mobile channel to drive sales, improve loyalty or build a brand.  As 2010 is about to open, marketers and promotional services providers in any discipline – branding, demand creation, or loyalty – owe it to their companies and clients to investigate this powerful promotional tactic as part of their plans.

Budweiser’s news is especially timely given recent posts about why mobile sweepstakes and contests are an absolute necessity for brand engagement and best practices for executing winning promotions.

• Half of your loyal buyers this year will not be loyal to you next year (Catalina Marketing’s analysis of tens of millions of shoppers).
• The 20% of buyers who account for 80% of sales includes super-heavy category users who might even prefer another brand and purchase that brand more.
• On average, 30% of loyal buyers do not have attitudes about your brand that support their loyalty and are the ones who are most likely to defect.
• For most brands, only a single-digit fraction of your customers connect to you via social media.

So despite so much emphasis on developing loyalty programs and the hype surrounding social media’s influence on consumer behavior, the facts suggest brand marketers are struggling against a tide they cannot overcome.  The article also raises interesting statistical research showing that successful brands connect not only with frequent, loyal customers, but all potential consumers:

“…you must find more people to become loyal, but you also must increase your share of purchases among those who buy your brand less than half the time.”

To achieve this, the author suggest marketers focus on “activating” their brands with consumers, which entails “imaginative shopper marketing, visibility, packaging (which is your ‘ad’ that every buyer sees), the right configuration of features, the right price, findability as people search and pre-shop digitally, and buying ads in special-interest magazines… just to mention a few ideas.”

I suggest that marketers identifying with these challenges look to mobile marketing tactics such as interactive text message promotions and sweepstakes that can pull consumers into perpetual dialogs with brands.  Promoting such programs at and around the point of sale is one approach brand marketers can use to influence less loyal consumers to consume their products.

The statistics and statements like the following suggest it’s imperative for marketers to look for ways of engaging as many consumers as possible with their brands.

“The marketing approach that calls for building brand engagement isn’t wrong, but it’s incomplete.  It doesn’t help you figure out how to grow the half of your sales that comes from less-loyal buyers who find multiple competing brands are acceptable.”

Given the reach offered by text message-enabled consumers and proven response rates in the 20-30 percent range, mobile promotions are a logical solution to this challenge.  Engagement platforms such as that offered by Interactive Mediums provide marketers a multitude of approaches to suit any promotional requirement.

We have previously written about this capability here in a recent Point of View and here in a Success Story, but I came across a great article on PromoMagazine.com that outlines some best practices which marketers should heed as they look to engage their customers in revenue producing and brand enhancing ways in 2010.

Titled, “Offer Multiple Prizes Instead of Just One,” the article describes the use of many individual prizes as incentives in a contest promotion, versus one large one.  The advantages include:

• Higher probably of engagement since consumers perceive a greater chance of winning.
• The opportunity to create a positive brand experience with more than a single winner.
• Consumers simply are drawn to the opportunity to win something of value and given the current state of the economy, more consumers are looking for such chances.
• A focus on many individual prices allows marketers to brand those awards with logos and messages.  That is harder to do with a car or other large hard goods prize.

Executing promotions in this manner ensures greater participation and a higher return, or as stated in the article:

“The hundreds of thousands of contacts…garnered can now be used for future, cost-effective, one-to-one, brand-to-consumer dialogue — which is typically the end-goal of any sweepstakes.”

Marketers or the companies who develop promotions for them should align themselves with technology solutions that allow such multi-dimensional contests to be designed, deployed and measured quickly and cost effectively.

A partner such as Interactive Mediums stands ready with an easy to use offering that will not box you into a single type of contest or one isolated to a single channel.

This article today on eMarketer.com cites research into mobile coupon redemption (chart pictured in this post) suggesting real “hockey stick” growth after 2011.  The article also mentions consumers tend to be less interested in couponing than in using their mobile devices for product research “on the go” – such as “scanning images or bar codes with their mobile phone to get more information or coupons for a product.”

That quote is interesting in light of another article, this one about Google again making a move into QR, or Quick Response codes.  QR codes are two dimensional bar codes that when scanned with the camera function of a Smartphone present a variety of information about the code – the company or store it represents, links to a website or any number of details helpful to a consumer, including special offers or coupons.  Google’s strategy is to place 100,000 QR code stickers in businesses across the U.S., all of which do not require specialized software – a limiting factor in prior trials of QR codes which often required proprietary reader software.

Google’s efforts are well aligned with trends suggesting consumers are more interested in product research than coupons – even if QR codes can serve both purposes.  Widespread QR adoption may be just what retailers are seeking, based on this article today from Retailwire.com.  Although coupons are a logical mobile application, this viewpoint reveals the “necessary evil” aspect to couponing:

“The downside of mobile coupons is the back-end cost of redemption, which makes a successful promotion increasingly expensive.  Coupons are also the most basic of triggers for shopper engagement, with little long-term loyalty benefit.”

The article poses the question, “what’s next?” and goes on to suggest retailers build mobile strategies geared around an enhanced shopping experience, in and outside the store.  It’s apparent that retailers will benefit most from strategies geared around creating positive mobile customer experiences for their customers.

Widespread QR codes are just one element that will help connect consumers with retailers in value added ways – including couponing – but the greatest value will stem from targeting customers at the point of device to drive sales, cultivate loyalty or increase brand affinity – otherwise called Active Customer Engagement.

“42% of 18-to-34-year-olds and 33% of 35-to-44-year-olds are at least somewhat interested in receiving opt-in mobile alerts from their favorite places.”

“Among respondents who would opt in to location-based alerts on their mobile phones, more than one-half were interested in messages from restaurants, followed by movie and event tickets, weather, and clearance sales.”

Just like any business strategy, however, it isn’t just a question of attitude toward mobile communications; it is as much about actual consumer behavior “on the go.”  Mobile can be a powerful tactic, but its ultimate value derives from programmatic use as part of a broader strategy targeting the mobile customer experience – in this case competing for consumer dollars in a down economy.  The research supports use of mobile as an ongoing customer relationship management strategy which takes advantage of natural shopping behavior:

“90% of consumers have made impulse purchases while out shopping because of a sale, and 22% of mobile users did so weekly. Marketers that let consumers know about local offers at the right place and time might take advantage of such behaviors.”

The fact consumers will make impulse purchases independent of mobile interactions represents a major untapped source of business for retailers.

To take advantage of this quickly, retailers need to partner with firms like Interactive Mediums who will help shape the best path toward meeting business objectives.  Starting by developing a mobile marketing strategy map is a logical first step.

When attempting to use this with my Jewel/Osco grocery preferred card, it failed to work, leading me to conclude that widespread adoption was far from certain.  This evening I had a chance to try the application again, this time with my Blockbuster account.  And it actually worked.

Perhaps Blockbuster stores have more advanced scanning equipment.  No matter why it worked in this case, the experience would have been enhanced further by connecting my debit or credit account so I would not have to separately pay for my DVD rentals.

Assuming other cards may work as well as this example, you could say the application is redeemed.  Just like like mobile codes at the point of sale should.

The article describes a technology called SnapTag which is a unique coded circle intended for placement around a company’s logo, then printed in magazine advertisements and presumably posters as well.  This coded circle corresponds to a pre-defined mobile interaction which is instantiated when a consumer takes a photograph of the logo with their device then sends it via MMS or email to a number or address posted alongside the logo.  Read the story quickly and you envision a ubiquitous bar code-like technology which does not require special software on the mobile device, as is the case with Quick Response 2D bar codes.

Step back a moment though, look more closely and in fact what SnapTags actually do is make a mobile interaction more complicated than it needs to be.  The encoded circle serves the same function as an SMS keyword.  In the case of SnapTag, a photo must be sent via MMS to some phone number or mobile email address.  In the case of a traditional text message communication, a consumer instead texts a keyword to some shortcode number.  In both cases, the action causes a response to be sent back to the consumer, potentially driving a visit to the mobile web or triggering an email.

Where I can see SnapTags being useful is in connecting a brand to mobile by virtue of combining the two in a single image a consumer must capture with their camera in order to engage in the interaction.  However, given the greater ubiquity of SMS text and the added steps involved for the consumer with SnapTags, I think the same is possible simply by placing a keyword and shortcode alongside a logo.  Real bar codes encapsulate data which is interpreted on a device and potentially contains information, pointers to mobile web or text communications — all independent of the transmission of data over the network.

Setup was a snap.  I simply keyed in the numbers on my cards and the application generated visual bar codes that presumably serve the same function as the code or magnetic strip on the cards.  I had visions of being pushed discounts and special offers to enhance my shopping experience.  So it was with this excited point of view I stopped at Jewel last night to pick up a few things and try out my new mobile loyalty card.  I handed my iPhone to the cashier, they hovered the device’s brightly lit screen over the scanner, and…

Nothing.  It didn’t work, so I had to fish the plastic card from my wallet for the cashier to scan as usual.  If Jewel needs to replace its scanners and point of sale systems for this to work, we are a long ways away from replacing plastic with mobile devices.  My hope is that there was just some kind of glitch, but if not, then it suggests ubiquitous SMS text message-based loyalty programs and coupons have a strong future in enhancing the shopping experience.

If retail marketing leaders are as fixated as described in the following quotation, I strongly suggest they tap into knowledge bases like Hello Mobile to see how retail and other industries are moving beyond the novelty factor to leveraging mobile strategically:

“The retail CMO is looking for some new-fangled, high-tech way of engaging with this itinerate shopper.  The sage truth is that the marketing department is chasing shadows…Instead of focusing on the consumer and how they are leveraging mobile in their stores, they are investigating widgets and apps that have little to no reach or frequency in their consumer base.”

The author lumps retailers and packaged goods firms together in making two recommendations to their marketing leaders:

• Learn from history: We blogged about this idea in a slightly different context here, but the gist is that the desktop computer/Internet/email drama is again playing itself out in the mobile space and leaders unable to see the similarities are missing the boat:  “I-want-one-too CEOs are running to their agencies and IT department and developing application that only five percent of consumers are returning to after a lonely month on the phonetop.”
• Learn from your consumer: We talk about a focus on the Mobile Customer Experience, and the author wisely recommends observing your customers in the store environment to see how they use a mobile device while shopping.  “They are doing two things in your aisles: using their phones to browse and text. Is the consumer opening the browser to find tips and information to help with their shopping experience? Are they messaging home for the shopping list? Possibly. But the shopper is certainly not scanning 2D codes with their phones. They are not opening the security on their Bluetooth settings for inbound offers. They are not all downloading your app to their phone.”

The greatest challenge marketing leaders have is knowing how to start and who to partner with to realize their mobile aspirations.  There are numerous technology, consulting and agency resources ready with capabilities and proven successes to share best practices and prescribe the best way for retailers and packaged goods companies to begin using mobile strategically to develop and improve customer relationships.

Positive results for programs like this are increasingly commonplace, but if this is true, then it goes without saying that return on investment based on a 32 percent increase in sales is phenomenal.  What is most interesting is how Hooters approached the project with an eye on confidently determining its effectiveness.  For example:

• Business Objective: “..the overall strategy was to increase Hooters’ store traffic.”
• Targeted Mobile Experience: “The aim of the promotion was to make it more convenient for viewers to learn how to join the Hooters Mobile Text Club.”
• Measurability: “..Hooters wanted a way to track the number of responses to the VOD (video on demand) and the number of people choosing to opt-in to the program.”

This is an approach similar to our view of targeting the Mobile Customer Experince based on business objectives.  In this case Demand Generation was the marketing initiative.  We also prescibe a focus on data collection and reuse via a Mobile Customer Data Asset.  While the article doesn’t state as such, you might imagine Hooters interested in understanding the quanity and velocity of customers going through the process, not unlike how salespeople gauge the movement of prospects through a sales cycle.  Like this:

• (Suspects) Top of funnel: “…the number of customers clicking the remote to see the longer Hooters VOD, as well as the time spent watching it.”
• (Prospects) Middle of funnel: “…the increase in the number of people added to the mobile database. State of Text provided tracking consistent with TV day-parts.”
• (Sales) Bottom of funnel: “State of Text compared the data with the TV schedule to determine the effectiveness of individual programs. Hooters tracked redemption rates at the store.”

This is yet another great example of a retail/restaurant taking a strategic view of mobile and leveraging it to achieve real business value.  It suggests that should Hooters at some point utilize reality augmentation you can be sure it targets a business problem and isn’t just a clever novelty associated with its somewhat offbeat brand.

Another term I would add is “involvement.”  Creating mobile experiences that involve consumers in the buyer/seller relationship in a value added way itself has the ability to render cards worthless, static and forgotten – as the article points out is happening already:

“The use of many loyalty cards has become almost automatic and mundane, and that there is little consumer engagement with many of their offers. One study found that over 30% of consumers never remember to carry their loyalty cards, or have lost them, and almost 20% of active loyalty point collectors never actually redeem them.”

The fact mobile devices are always on hand instantly creates a much larger base of potentially more loyal customers.  The key is implementation and target audience; broad reach using an SMS text messaging approach, or potentially less reach but a targeted demographic via Smartphone application?  The answer is probably some blend of the two, raising again the importance of the Mobile Customer Experience in leveraging mobile most effectively.  As marketers discover every day, the mobile channel’s high engagement factor transforms traditional static marketing methods like loyalty cards into high-po strategic relationship enablers:

“Already, test campaigns and live promotions in the field have shown that mobile voucher redemption is dramatically different to paper-based promotions (for example, Heineken achieved a redemption rate of over 80% in one campaign).”

Retailers as much as any type of business focus on creating a positive shopping experience, including the layout of stores and product mix.  Many are turning to mobile as a means of connecting with their customers in and outside the store environment as part of loyalty programs and also to extend the relationship beyond the confines of a storefront.

So I was curious to what extent mobile might be represented in an October 2, 2009 Brandweek.com article titled, “Retailers Focus on Customer Service, Personalization.”  I thought the article was a bit alarming due to a seemingly casual attitude about the challenges facing retailers in the current recession; it concludes saying, essentially, that retail success is no longer about designer’s egos and that it’s a business that has to be taken seriously.  Hopefully retail marketers as a whole are out ahead of advice like this, if not, they won’t be working much longer.

Thankfully, there is a positive reference consistent with mobile marketing best practices.  Although mobile isn’t called out specifically, the following quote shows retailers are focused on the right business problem, now they need to start mapping approaches to getting the job done.

“If any good comes out of the recession, it may be retailers’ renewed focus on the customer experience…”

“For mobile marketers, focusing on marketing for impulse purchases would be a better hook than a considered purchase,” she said. “Offers that have an instant impact appear to resonate with smartphone owners.”

Yesterday I blogged about an article on DM News, featuring an interview with a retail executive who strongly suggested that considered purchases be the focus of mobile efforts within the retail and other sectors:

“…every purchase is now a considered purchase. Across all economic strata, people are far more conscious of what they’re buying.”

While this makes for great blogging material, for marketers the situation is less good. What marketers need is not contradictory or confusing directions from supposed experts, instead they crave proven prescriptions for using mobile to achieve their goals, be it increased sales, customer loyalty, or brand affinity.

To me it’s a question of relevance to the many lesser known brands that may be interested in exploring how mobile can help maintain and grow their businesses. Firstly, Coke adopted mobile after experiencing quite a bit of success with its loyalty program via web, email and other media, and so had a ready-base of registered participants to rather easily obtain mobile opt-in status. Secondly, as arguably the world’s strongest brand, you would expect Coke to achieve this level of mobile success with a product geared toward youthful consumers.

I think the lesson for brands competing for mindshare with large established players is that mobile is a tactic – albeit an important one – that should be considered part of a broader program to engage with consumers on the go. In other words, let the goal (customer loyalty) dictate the tactics (mobile), not the other way around.

There is an element of “guerilla marketing” involved with mobile today, given the low cost of entry and ease by which marketers can get started. I would suggest lesser-known brands avoid this low value approach and consider how best to develop an interaction strategy around customers, and use knowledge capture as the foundation for evolving such a strategy.

Consider these forward looking statements from the interview, consistent with our point of view here at Interactive Mediums:

“We want to look at how we take the device in the customer’s hand beyond the mobile marketing paradigm of sending them e-mails and texts to create a true mobile shopping experience.”

“The whole idea is not to say, ‘OK, it’s the Web, only smaller,’ but rather, ‘What’s unique about being real-time in the store?’”

As I have written about here before, the upcoming holiday shopping season will likely be a brutal one, placing an even greater emphasis on clever marketing to drive foot traffic and sales.  This interview reminded me of several recent posts that retail marketers should review as the most important part of their year approaches:

• Simple, yet effective real world example of using mobile to drive sales in a service business.
• For “land locked” retail businesses inside malls, remember to look beyond the immediate environment when developing mobile marketing plans.
• Be sure to use email alongside mobile tactics appropriately; retailers appear to find email less useful than other industries.
• Don’t fixate on any one or group of mobile technologies, but be aware of them and how they can collectively power profit making marketing efforts.

I won’t repeat all the recommendations, but needless to say the author focuses on the mobile customer experience in describing how device appropriate websites facilitate reservations much better than sites not optimized for the small screen.   Also covered are the strategic use of opt in text marketing interactions and clever uses for mobile applications.

While the author mentions CRM, the paper does not delve into the customer knowledge to be captured as part of these interactions, and how it can be repurposed to drive more relevant higher value mobile dialogues with customers.  So in addition to recommending this paper to any hotel marketer, I would add that focusing on customer knowledge objectives at the onset of any mobile marketing plan be top of mind.

The article is designed to drive sales of a possibly interesting report on the topic, but it also cites publicly available research about factors affecting uptake of mobile commerce and the types of purchases consumers are willing to make via mobile.

The chief constraint cited by a large margin in one survey was capital which makes sense given current economic conditions.  The article notes that one factor unaccounted for in the survey is the lack of technology standards which makes offering a singular mobile commerce transaction very difficult.

The article goes on to cite other research focusing on the types of purchases consumers are willing to make via mobile, and these tend to not surprisingly be low cost items, not typical retail products.

Given the aforementioned lack of standards and existing capital constraints, I suggest businesses focus on using ubiquitous text messaging as a platform for engaging in “virtual mobile commerce” right now.  Even with constraints lifted, I think the nature of consumer shopping behavior makes mobile more likely a complementary tool as opposed to a transaction means unto itself.

Adopting this attitude should help businesses get comfortable with the mobile channel, engage their customers in profitable mobile dialogues before their competitors do, and also realize the benefits of taking a customer relationship management view to using mobile.  As I described in this recent blog post, using mobile strategically to engender greater customer loyalty can simultaneously serve as a foray into “virtual mobile commerce” which drives transactions and is measurable.

“Not only is the scanning equipment and point of sale integration a black hole of challenges and issues, the consumer usability issues are numerous.”

He is referring to a number of variables in this statement, including low adoption of mobile devices capable of displaying digital bar codes, limited scanning capabilities at the point of sale (POS), to say nothing of the integration between the couponing campaign and sales transactions necessary to determine ROI.  Perhaps most importantly for any such program to succeed is the customer experience, which is not enhanced by customers fumbling with their devices at the POS, a point also raised.

In this recent blog post , I raise the concept of the “integrated customer” to facilitate effective and measurable customer engagement programs such as coupons or loyalty.  The approach I describe gets to the very heart of the author’s prescription:

• Focus on SMS text because it’s most widely used, as opposed to iPhone which has a loyal but currently smaller following.
• Make the goal engagement, so that customers remain “opted in” to your program over time.
• Focus on closing the loop to understand effectiveness and ROI:   “A well developed mobile solution should provide information on member growth, redemption rates, purchasing behaviors, predictive purchasing patterns and ROI – down to the store location and individual member level.“

The author notes as well that “the devil is in the details.”  To that end, it isn’t readily apparent how a marketer could implement a measurable program in the absence of POS/transaction integration.  That is why I proposed creating an “integrated customer” to serve as that glue, by incenting them to play this role and by doing so remaining engaged in an ongoing dialogue with the marketer’s firm. In this way, marketers can accelerate the deployment of effective loyalty and couponing programs which are measurable and long lived.

With many marketers just beginning to dip their toes into the mobile arena, and many sitting on the fence waiting to see how things shake out, anything which helps draw the critical connection between mobile marketing activity and business results should accelerate adoption of the underlying technologies.

Short of developing their own solution tightly integrated with internal systems, or purchasing potentially costly third party software and similarly stitching it into transactional systems, marketers would seem to have little choice but to rely on channel centric metrics, such as reach, open rates, and click throughs to measure and justify mobile marketing efforts.

Leveraging the Integrated Customer

This led me to imagine using customers as the glue between mobile marketing activities and logging business results.  What I call the “Integrated Customer.”

For example, many businesses rely on frequent and repeat purchases by their customers.  Be it a product with a limited lifespan that requires replenishment or a routine service, many businesses continuously market to their customers to maintain demand and stay top of mind.

I don’t think it’s any coincidence that these businesses may find mobile more appealing than email given the Epsilon survey’s email response data I referred to yesterday on the blog.  Mobile has the capacity to connect in a more relevant and timely fashion than email to influence consumers to purchase.

I see two keys to creating an Integrated Customer to enable the tracking of mobile marketing activity from message delivery through purchase:

• Provide incentive to customers to notify you upon redeeming an offer at the point of sale, ideally within a short time window, via text messaging.
• Assigning some dollar value to that transaction, like an expected average price or average market basket value, that can later be matched to inbound purchase notifications, to derive value and return on investment calculations.

First I will tackle the incentive part.  For example, a multi-site retailer could promote a loyalty program in its catalogs, on billboards and on its website, whereby customers opt in to receive limited life offers for redemption in their stores (such as a discount on certain items or a coupon).  These offers are periodically broadcast to opted-in customer mobile devices, containing unique codes which each store knows are associated with the discount program.

This retailer is really smart, and so has identified segments of its customers by lifetime value, allowing it to tier its loyalty program so that highly valued customer receive greater incentives than those of lesser value.  The discount codes are similarly aligned.

The retailer is also smart when it comes to having a strategy behind its loyalty program.  It knows the average value of a typical market basket, the purchase migration behaviors of customers among different lines of products, and has designed its incentive offers to grow basket size and encourage logical product bundle purchases.  There is a planned sequence of offers to be delivered to each segment, essentially a “best next action” the retailer is proposing to its customers.

Customers are told upon signing up for the program that this is not a one-time affair; it is part of the retailer’s ongoing efforts to serve its customers better.  To that end, customers are incented to text in their discount codes to a short code, along with the keyword RewardMe when making an eligible purchase.  Why would customers do this?  Not out of the kindness of their hearts.  Because it pays.

The loyalty program’s offers have a limited shelf life, say two weeks, and expire only to be replenished when a discount code is submitted as part of the above process.  A customer always wants to be sure to have an eligible reward handy to make a purchase and therefore will have just one reason to redeem their discount codes for “fresh” ones – when transacting at the point of sale.  There may be outliers, but the majority are likely to behave in this fashion.

The transaction is registered by the mobile marketing services provider when redeemed, then aligned with the expected value of the interaction, which was configured by the marketer at the onset of the program.  The marketer knows what offers were redeemed successfully, by product and customer segment, and can draw instant value and return on investment calculations.  The utility of the proposed “best next action” can also be assessed and refined based on the results.

Sounds like an application will killer potential value, and it didn’t require integration between mobile channel marketing execution and internal transactional systems.

“…a recent Universal McCann study which indicates that 81% of smart-phone users interact with mobile media while shopping. The study also revealed that 53% of smart-phone users click on ads and 35% request more information or a coupon.”

It’s hard to ignore those statistics and some malls and shopping centers with the foresight to see the effectiveness of engaging shoppers via mobile are clearly taking advantage of the situation.

The post notes that it’s great to see mobile marketing services so focused on a niche and serving its requirements very specifically.  I agree that’s often a winning play, but I can’t help but see a bigger picture that shows consumers living outside malls and shopping centers, and that shops locked into storefronts need to engage customers beyond that environment, even before they ever come shopping with open wallets.

To that end, I would suggest taking a multichannel view that extends beyond the confines of the shopping space to begin engaging potential customers in mobile dialogues.  I think the malls and shopping centers that take this view stand to earn the lion’s share of dollars spent during the upcoming holiday season.

For many reasons, mobile marketing may see its most widespread application ever during the upcoming holiday shopping season.  A low cost of entry along with the potential for a big pay back makes mobile a good fit with the current economic climate.  Regardless of what forecasters say of holiday spending levels relative to last year, consumers WILL spend.  Marketers have a great chance of capturing those dollars with the help of mobile campaigns.  Consider this quote from the article:

“Recent studies from Universal McCann have shown that 80 percent of mobile Internet users browse the mobile Web while shopping.”

This means marketers have a chance to engage with and influence consumers when in close proximity to their stores.  It also means smart marketers will start RIGHT NOW developing ways of ensuring customers end up spending money in their stores by building lists of opt in customers, thus establishing a Mobile Customer Data Asset that captures preferences and other information to direct relevant offers and communications aimed at shopper wallets.

Personally, I am excited to read post-Holiday season about all the creative and effective ways marketers used mobile to engage their customers.  Good luck!

• Consider mobile in combination with other channels (like is mentioned in this blog post).
• Use SMS to understand the reach of your multichannel efforts (also like is mentioned here).
• Remember that not all potential customers have iPhones or even a smart phone, and develop content accordingly.
• Base your message on the audience’s behavioral traits, not the type of phone they use (sort of contradicts the above point but you get the idea).
• Leverage the know-how of third parties who research consumer behavior with mobile devices to use in crafting more effective programs – a terrific idea I think.

One tip I would add is to view mobile as another channel of your business, not just an advertising medium.  Businesses don’t use their websites, call centers, points of sale or other interaction points to simply promote a message – they transact with their customers, gathering data that becomes the foundation of CRM and other marketing strategies.

Marketers should consider each mobile interaction similarly, and be collecting information about their customers in a Mobile Customer Data Asset.  This rich source of data can then be used to inform successive projects aimed at driving greater purchases, loyalty or whatever metrics are important to growing the business.

A California quick oil change business posted billboards near their service centers prompting passers buy to text in to receive a discount and be entered into a sweepstakes.  The ingenuity of this program spans the connection between a traditionally offline marketing channel and mobile, as well as the proximity and visibility of the message to a fulfillment center for customers to transact.

While mobile commerce is in its infancy relative to broader advertising applications, developing a multichannel approach like this is an easy way to connect mobile marketing investments to a dollar return.  For that reason alone, marketers should consider mobile as part of their broader perspective when developing plans and budgets, not an afterthought as the article warns.

“I mean, the data’s there…it’s just a matter of digging through it.”

Leading up to this quote are other interesting comments from panel members at the event, such as:

“They’re (clients) looking to understand what is the ultimate ROI, the ultimate link to sales…these are hard things to measure in mobile.”

And also comments about the challenges involved:

“Each (mobile) channel has a lot of different metrics about that one channel, but it’s hard to tie it across…yes, there’s a problem here but it doesn’t mean you don’t do it.”

While it truly is challenging to get a handle on the right marketing metrics for various mobile channels like SMS, mobile web and mobile applications (in isolation and in combination), the first step must be collecting the right data and making it available in the right form for marketers to make smarter decisions.  Marketers should set their sights on providers with this level of focus.

Brand marketing has thus focused on panel or other research and development of product attributes to be communicated en masse to an audience as targeted as media allows. What’s fascinating about the mobile channel, among many things, is how it can help brand marketers move closer to their customers than ever before, develop relationships with them, learn about their behavior and use this insight to drive increased consumption of the brand’s product.

This Customer Relationship Management (CRM) capability enjoyed by B2B marketers almost exclusively to date can now be extended to Business to Consumer (B2C) marketers. Unlike media that relies on consumers to observe advertisements on billboards or flyers, or even digital media like email and web which requires access to a computer, mobile media allows brand marketers to initiate contact with and develop an ongoing dialog with their customers directly.

The “on the go” consumer, with their mobile device or phone turned on and ready to submit and receive messages or other content, has been shown responsive to incentives and messages designed to drive interaction with brands. The first step, ironically, is for the marketer to utilize traditional media to communicate a short code and keyword that enables consumers to opt into receiving communications from the brand. Thus begins a relationship which creates a data asset that builds over time, providing previously impossible actionable insight into a brand’s customers.

As I begin thinking about the application of mobile marketing techniques to foundational marketing processes such as customer acquisition and retention, it makes me wonder how mobile is different than other approaches such as direct email/snail mail or multi media advertising.

Within a competitive context, I see mobile as highly unique in that it provides an avenue to customers in near real-time, wherever they may be.  For example, a new brand entering the market could utilize a mobile marketing campaign to more quickly gain marketshare in a space usually coveted by a few gorilla brands.  Advertising a short code on billboards or during sporting events to register for coupons or product samples, for example.

Not to be outdone by more nimble new entrants, established brands may also use mobile to nurture relationships with existing customers, preventing newcomers from gaining ground.  This might take the form of a loyalty program geared around driving consumption of the brand’s product via a points rewards system.  Like the new brand, traditional media might be used to encourage registration via mobile means.

What’s interesting is when both happen simultaneously and there is competition for the customer’s mindshare.  In this case, the medium truly becomes the message.

The way a customer perceives the delivery of a message via mobile medium, as well as the contents of the message itself, work in concert to achieve a desired outcome.  For this reason, I think it’s key for marketers to remember that when considering mobile as a marketing channel they also plan the message accordingly, for both its content and form.