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The Mobile Marketing Imperative

  • Posted On: 1st November 2013
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By: Babar Khan

In 1983, Motorolla launched the Dyna TAC 8000X which took ten years to reach the market and over 100 million dollars in R&D. It cost the consumer a whopping 4,000 dollars with a battery life that managed an hour of talk time. In 1989, the same company came out with the in car phone called Micro Tac at 3,000 dollars and gained well over five million cell phone subscribers. Most of the tech around this phone model was embedded physically in the consumer’s car. In 1992 the first text message was sent, 1996 the USA had 38 million cell phones, 50 million by 1997 and the introduction of 2Generation, in 1998 the average phone usage time was 2 hours per month and in 2000 Japan introduced … the camera phone.

TodayMobile penetration exceeds 100% of the population with 55 million phones in the hands of 29 million citizens in Saudi Arabia, 15 million phones with 7 million citizens of HK and 20 million phones with 17 million citizens of the Netherlands. This is cell and smart phones as well.

The world’s largest mobile markets are the Asia Pacific, Africa and Latin America, the last one has experienced 130% mobile penetration in the last 4 years (not accommodating missing data on second hand sales or discards) and has over half a billion connections. Like in many underdeveloped countries, users are getting access to services because of mobile for e.g. despite not having access to physical banks, they are banking via mobile thanks to the internet infrastructures.

The top six countries with over 50% smart phone penetration are – South Korea, USA, Norway, Sweden, Australia and the UK. One of the largest consumer behavioral impacts this has had would be the shift in shopping stages and purchasing journeys. In the mobile era, brands prefer banking on mobile with M-Commerce and deriving strategies for a new path to purchase. Shopping in these markets is more iterative and less serial.

Consumers don’t need to be in a physical location to shop; they are always at it and are influenced by peers recommendations or backlashes. At this rate there will be more web connected devices than people on earth. In the past, the purchase journey started with awareness, an interest raised with campaigns, a desire pushed with sales strategies on the ground, consideration in store further pushed with shopper marketing and finally consummating at the purchase itself.

Today however, the M- powered customer drives the process. It starts with the consumer looking at things at home – checking for sales, looking at competitive pricing at Amazon, looking up store info, browsing the online store and checking inventory of interest. Just stop reading right here and consider what this fully means. This means that if your brand strategy has not accommodated this behavior and has not given itself the necessary presence in the consideration stage, then your products have no chance of being browsed (let alone purchased) once the consumer is in store. Secondly, if the consumer opts to buy online instead of pacing through the offline experience, you have no way of knowing whether your product was even considered in the first place. Your brand is not even on the shopping list!

Understand that smart phone users have a wide array of distractions and conveniences at their fingertips; they text more, play casual games, use more apps, listen to music and 2011 research from Google/Ipsos OTX MediaCT titled “The Mobile Movement Study” suggests that 80% smart phone users use their devices to assist in the shopping experience.

Cisco estimates that by 2016, mobile video traffic will account for 70% of all mobile data and this will be the same year of the largest mobile ad spend – marketing apps, coupons, steaming video and search. 66% of tablet owners download and view short videos. Nielsen reports that 45 million of US smartphone owners watch videos via mobile (faster than alternatives) with over a billion mobile broadband subscriptions worldwide and a staggering 51% mobile broadband penetration rate in developed economies.

When potential customers have completed the pre-buy phase, they leave homes in two types of behaviors. Seekers will enter the post purchase phase with mind made up on what will be purchased. They have one sole destination and may have shared intent – sharing something like “going to Aghas to buy Pakola” on Facebook, Twitter and other casual networks. The cruiser may still be conducting his or her research on the go, is willing to explore other locations, they can be influenced in store to buy something else or more and just like seekers, they have shared intent. Studies vary, but the seeker is usually male with the cruiser being female.

Before mobile, wired many gas stations with direct data feeds with six million volunteers in NA with people entering information on local gas prices, so users can find cheaper gas alternatives in their location. earns of the geographic advertising potential whereby location based marketing prompts users to check out related stores enroute. Same thing with MapQuest (Apple) or Google Navigation (Android) – users search for locations and based on the area of interest, ads appear at the bottom of the screen. Travel app “OnTheFly” shows every trip by any airline, date and cost.

When a potential customer is physically at the retail outcome of determined or potential interest, the retailer needs to adapt quickly to gain more. Location in mobile is the key to almost everything because in the past we could measure supply & demand, with mobile time & location can be added. The implications to the value chain – logistics, what to make in real time – as people are essentially walking the aisle. The purchase is based on two influences – location based marketing or services. LBM is when the company markets to the individual based on what is being searched for. LBS when like in Foursquare, the user is interacting with other users, because of the proximity based marketing potential and relevant marketing messages received.

So marketers need to participate in these discussions and have their mobile strategy ever present. Location takes us to the age of situational relevance meaning marketing based on the situation the potential customer is in. For example, someone in a jeweler store gets messages from a local or nearby florist, so it’s based on the situation or occasion and not so much just the location. According to Nielsen, in 2007 1.8 trillion text messages were sent online, in 2011 it was 7 trillion and it’s expected to hit 9 trillion in 2016. In the US, teens send 3,300 texts every month with subscribers sending nearly 700 monthly messages. This is happening at physical outlets of stores with customer’s texting to earn additional information. Wal-Mart bought a mobile start-up in California and renamed it Wal-Mart Labs to give the consumer a better experience on location. At present, the majority of consumers on location would rather get info from their store than an in-store sales person.

One of the things retailers need to be careful of is keeping a balance between being on target and being off target, to the point of being associated with being a cool accurate brand marketer as opposed to a random spamming creep when approaching a potential customer on location. Customers are cool with perfectly targeted info from a trusted brand that demonstrates a clear and highly relevant value proposition. What a brand shouldn’t do is be random or pushy with potential customers that might make them feel uneasy (a feeling no brand wants to be associated with) and wonder if they are being monitored.

When the customer is in the physical shop and in the selection process, the brand needs to look at influence points for triggers. In the new iPhone, “bump” allows the transfer of videos and images between phones that bump into each other. The way brands and stores are using this tech is triggering an activity. It used to be the QR code for quick response would send the user to a website (no one liked it), but now the trend is to trigger experiences. An app called “ShopSavvy” allows the user to scan an items’ barcode and with one tap they essential buy the item, a great opportunity for looking at products in the selection process. At the point of purchase with the selected items, the influence triggers come at the checkout stage. So at the point of purchase with Starbucks, an app allows users & buyers to gain more value from the sale from next sale discounts or extra items. As a transaction mode, mobile payments are really scattered. Square and Payfirma help facilitate payments between the user and a store with confirmations being sent to the store system. LevelUp is a payphone app with a one tap option that allows no credit card or cash transactions with minimal hassle.

After the purchase, the customer is in post purchase mode and what that means for brands is encouraging reviews and endorsements to cash out on coupons for the future purchases. Mobilization goes end to end, it’s not serial and is iterative. So customers will buy brands and get on “Groupme” to talk about their purchases and share the items checked off. The other users or connections in that group will recommend follow-up products to augment or compliment the buying experience, so endorsements apps are a place a brand wants to be to maximize its usability proposition and gain brand evangelists in the process.

The world of brands are playing this game in a big and small way, the mobile disconnect comes from the gap between corporate resources allocated towards mobile and the customers use of it. Most brands only spend 1% on mobile, while highly digitally integrated firms like Mondellez (ex-Kraft Foods) is investing 10% of resources on mobile. So a common conversation we have with CMO’s is getting to the point that while they agree that 90-99% of their customers use mobile to make purchases or browse options, the supplier brand is spending hardly 1% of its MarCom budget on the platform that has immediate ROI value (if and when done right). This huge disconnect needs to be corrected.

Brands need to start looking at ways to exert mobile influence by adding value to the customer experience, use proximity marketing, leveraging SMS, communicating over mobile, testing & learning new tactics, measuring and analyzing the new tactics and tapping into mobile apps, videos and web.

How will you influence your mobile customers?

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