Mobile Marketing - Don Roy, Ph.D.

Biz Eye View: The Rise of Mobile Marketing

Photo Credit: “Social Media Apps”– Flickr/Jason Howie CC BY 2.0

Editorial Note: This post is the second installment of Biz Eye View, interviews with experts doing innovative work in their fields.

The future of mobile as a key channel in a firm’s marketing strategy is now; smartphone penetration approached two-thirds of the total US market by the end of 2013 according to comScore. A strong influence on mobile access to the Internet is the availability and use of apps. Data from Nielsen reveals that mobile app use dwarfs time spent on mobile web, with 89% of mobile users’ time spent online occurs engaged with apps. The number of apps available to consumers continues to grow, with the Apple App Store and Google Play each offering more than 850,000 apps for download.

Despite the growth in popularity of apps, developing an app hardly guarantees that users and customers will flock to you. In fact, one estimate of app consumption behavior is that one out of four apps downloaded is used once and never opened again. To get an expert perspective on the current state of mobile marketing and app development, I asked Dave McAllister, president of Metova, a Franklin, Tennessee- based application development shop, to provide his perspective on mobile strategy development and the role of apps in engaging customers. Metova develops custom mobile applications for Android, iOS, BlackBerry, and Windows Phone platforms. McAllister, a 20-year IT professional, began molding Metova’s operations and providing strategic direction when he was hired as vice president in 2008. In 2012, he took over as president and has expanded the company from 30 to 50+ employees.

DR: What is the number one mistake companies make in their mobile marketing efforts?

DM: The biggest marketing mistake companies make is not having a clear message about their application’s purpose. Companies notice a trend in mobile device and app usage and want to be a part of that. It is important to understand what makes your application special. For instance, if you’re developing a social network app, why are people going to use it? What problem does your app solve for users? Why should they switch over from Facebook or Twitter?

Pinterest is a good example: it makes no attempt to replace the more general-purpose social networks. Pinterest identified a problem with existing social networks and focused solely on addressing that problem: it is difficult to discover new ideas. Their web and mobile apps are focused on giving people inspiration for projects. If you lack that level of clarity in your offering, you will have a hard time educating consumers on the benefits of using your app.

DR: In your view, what are essential elements to include in a brand’s mobile strategy?

DM: Once a company has a clear goal. it is important to choose Key Performance Indicators (KPIs) to measure your success on mobile. KPIs are metrics that identify whether you’re getting closer to or farther from your goals. For instance, maybe the most important metric to your social network is the number of users, or the average size of a user’s network of connections. You would likely assume that a decrease in your user population indicates a problem. Once you see that information, you can dig into the data and make a decision on how to turn things around. Without identifying that the number of users is an indicator of project health, however, you may not notice that there is a problem until the opportunity to right the ship has passed.

So what questions should you ask to ensure that you are properly incorporating apps into your overall branding or marketing strategy? How do the apps contribute to your company’s success? Are certain types of users or user behaviors more important to you than others? Why is that? Can you tie metrics back to departmental or company goals? For instance, do you expect your mobile app to have an impact on brand recognition? If so, what does success look like to you (followers on Facebook, new subscriptions, etc.)?

Understanding your target audience is also incredibly important. Knowing user interests, needs, and pain points will help guide your decisions throughout the development process. Imagine you are making an application for grandparents to communicate with their grandchildren. Without considering your users, it may seem like a good idea to put those extra couple of buttons on the screen. It may not occur to you that in order to add more buttons, the buttons will need to be smaller. Will grandparents prefer to have more, smaller, buttons on a screen or have fewer, larger buttons that are easy to read?

DR: When a company is looking to outsource mobile app development, what criteria should be used to evaluate a prospective developer?

DM: Experience is important to consider. Experienced companies can offer valuable consulting and feedback during the development process. Time and money can be saved when the developer knows the quickest way to implement a feature or can suggest a more cost-effective route.

Communication is another factor to keep in mind. Having the proper tools and communication outlets to easily discuss needs, ideas, and problems can make or break a project.

Our most successful projects are those where we spent extra time with customers to flesh out design and discuss expectations and priorities at that start. Meeting once a week to review progress and next steps ensures the team never strays too far from the path. We allow customers direct access to their developers. This reduces the number of people a message needs to pass through, hence lowering the chances of miscommunication.

When there is an absence of clear communication, projects and relationships are stressed. Timelines break down, expectations go undeclared and unmet, and everyone involved becomes frustrated with the lack of clarity and slow progress.

A good mobile app development team is going to have tools in place to allow you to communicate your thoughts and needs effectively. A great team is going to prove they listen by regularly responding to those thoughts and needs, and deliver by having a solid process in place to ensure that your needs are met.

DR: Mobile is a rapidly evolving channel. What trends or developments offer the greatest promise for businesses to engage their audience in meaningful ways using mobile apps?

DM: The greatest leap forward we have from our mobile devices is the contextual information about users beyond traditional analytics. Knowing their location, what they’re doing with your app and when, and the ability to push notifications to them in real-time wherever they are fundamentally changes how we interact with users.

Context-aware computing – changing application behavior based upon actionable information such as location and personal preferences – is well-complemented by the concept of ubiquitous or pervasive computing. We live in a world where there are more Internet-connected devices than there are people. Visual displays have made their ways into every corner of our lives. Every single display is an opportunity to remind people about your business. It extends beyond smartphones: mobile means “any computer smaller than a desktop”, and nowadays that encompasses a lot of things. Wearables like Google Glass or the Samsung Galaxy Gear, Arduino-powered devices built by hobbyists, tablets, in-store and in-flight displays, and likely your living room television are all network-connected and capable of displaying compelling content.

Consider how many mobile applications make sense on a TV screen, either as a primary method of consumption or as a supplement to the core experience. Would you like to show off family photos, or see the latest movie trailers, or see real-time stats and player profiles while you’re watching a game? Or since I brought up the example of Pinterest, how would you like to get inspired via 70 glorious inches of 1080p screen real estate? The second screen experience is another hint of what the future holds: contextual information displayed to inform you while you are entertained.

Quality over quantity is another one of the most noticeable trends in mobile. It is better to have a simple application that does its job expertly than a complex one that works only so-so.

There are applications that have been on the market for long periods of time that are becoming too feature rich. For example, in Facebook, you can play games, post on walls, read articles and blogs, download new apps, etc. etc. There are actually applications trending whose only purpose is to curate, filter, and display this data. People are moving away from “I want an app that does it all” to “I want multiple apps that are specialized to fit each of my needs.”

Let’s go back to the Pinterest example. No one goes to Pinterest to keep up with their family and friends or schedule events or play a game. You go to Pinterest to share and find your inspiration. Pinterest does that beautifully. If it included every feature you found in Facebook, the quality of the core user experience would degrade. No one visits Facebook to get inspired.

The Mobile Future

What is your take on how mobile will change the way marketers reach and engage their customers? How do you avoid becoming part of the 25% of apps that is discarded after one use? What companies or brands are doing mobile well today? Share your thoughts on where mobile is headed.

QR Codes: Novelty or Necessity?

Although quick response (QR) codes have been around for 20 years, their use as a mainstream marketing tactic has yet to take hold in the United States. The idea for QR codes arose from a desire to create an alternative to barcodes that would enable more information to be packed into a code. Widespread use of QR codes has emerged in the past few years due to consumer adoption of smartphones with capabilities to scan codes easily (that is of course if your scanning app works well). Educators, museums, businesses, and anyone else with a QR code can point us toward additional information and deeper engagement opportunities.

New Toy

To this point, QR codes have been less than remarkable as a marketing tool. Why? The answer is no different than why many web sites and social media accounts are lackluster- the creator has not figured out how to strategically use them. Creating QR codes is easy- the image at the top of this post was created in seconds- creating QR codes that are valuable for the target audience apparently is more challenging. Often, a QR code merely points one to a company’s website homepage. Assuming someone takes action and scans the code, what are they supposed to do once they arrive- look at the website in awe and be amazed that they were magically taken there by scanning an image? It is no different than when we get a new toy, one that has cool features but turns out to be more sizzle than steak. For QR codes to be taken seriously as a valuable tool in the IMC toolbox, focus must turn to how to use QR codes in a way that adds value to the consumer while achieving goals of the marketer.

The QR Value Proposition

Should you be using QR codes to enhance your brand’s online marketing efforts? Here are three benefits to consider:

QR codes act as a “fast pass” to your online presence – Just as using FastPass at Walt Disney World is a shortcut to the ultimate goal of experiencing attractions, a QR code is a direct line to where you want to take searchers. Help consumers save time and give them a fast pass.
You can facilitate call to action – Perhaps the last destination you want to take people scanning your QR code is the homepage of your website. You may have an awesome website, but people do not want to be there. They are looking for information or solutions to problems. Meet their needs by steering them to a specific place to sign up for email newsletters, download an e-book, or even buy your product.
Unleash your content – In an environment where content rules and marketers have embraced their role as publishers, your company or brand is likely amassing quite a bit of content- videos, blog posts, case studies, and more. QR codes can point searchers to specific content pieces or larger collections of content such as your YouTube channel.

Apply Old Thinking

QR codes may be an emerging, even unproven marketing technology. If you are evaluating whether to use QR codes in your IMC strategy, a simple but effective approach to take is to consider them from your customer’s perspective. Why should they be compelled to scan your codes? Getting straight to the point- what’s in it for them? It’s the classic marketing question applied to buyer behavior. What are their motivations to scan and process information delivered via a QR code? How will it help them or add value? Once these questions are answered, decisions about how to use QR codes should be easier to make.

Mobile Marketing Can Add Value, Build Loyalty

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It is very exciting to be part of an industry that navigates change regularly. The current growth in mobile marketing bears some resemblance to the evolution of Internet marketing that began in the late 1990s. Firms are trying to figure out: a) should they have a dedicated mobile marketing strategy and b) what the heck to do if they decide to go mobile. Here is some good news for companies weighing their mobile marketing options: Not only can a mobile strategy be used to remain competitive, but it can be used to enhance customer value and increase customer loyalty.

The promise of mobile marketing is particularly powerful for retailers and other B2C marketers that rely on customer transactions to fuel growth. Access to a retailer’s products via a mobile device is one way to add value by making shopping more convenient. But, being an alternative to bricks-and-mortar shopping is not experience is not the only potential payoff of a mobile marketing strategy. Integrating mobile options into the payment or checkout process adds value by increasing the efficiency of serving customers. When shoppers pay via mobile devices, it reduces the amount of time spent completing the transaction (e.g., swiping credit card or making change). Thus, all customers are served faster… even the ones not paying with mobile devices.

An even more exciting potential benefit of implementing a mobile marketing strategy is that it can have a positive impact on customer loyalty. This benefit has been the experience of The Bean, a three-store coffee house in New York City. The Bean implemented a mobile payment system offered by LevelUp. Shoppers with the LevelUp app installed on their mobile devices can pay from their devices and at the same time earn rewards through repeat purchases. The impact on customer loyalty is noticeable as evidenced by:

30% of customers using LevelUp app return in less than two weeks
Most LevelUp users have visited The Bean five or more times.

In a highly competitive B2C environment, mobile marketing can be used to set a brand apart from competition. Customers will value the convenience of technology-assisted transactions and be inclined to be repeat customers because of the relationship facilitated by mobile apps.But, before investing in hardware or software to implement a mobile marketing program a strategy is needed to outline the objectives to achieve and how it meshes with existing marketing programs. The mobile frontier is still relatively unsettled; explore opportunities to build a competitive advantage and customer loyalty through mobile channels.

Mobile Commerce Daily – “The Bean Leverages Mobile Payments to Drive Repeat Visits”

Moe’s Knows Three Key Ingredients of Social Media Marketing

Social media is a potentially powerful marketing tool that can build brands and grow businesses. “Potentially” is the key word – harnessing the capabilities of social media has proven difficult for many brands. Also, dynamics of social media consumption (user-driven, highly interactive communication) differ dramatically from traditional marketing communication conducted via mass media advertising. Applying old-school marketing thinking does not usually turn out well in social media marketing.

One brand that appears to get social media and is working it effectively to build customer relationships and grow sales is Moe’s Southwest Grill. The restaurant chain as deftly integrated social media campaigns and mobile marketing into its existing platform. Moe’s has used a variety of tactics to engage customers and drive sales. Examples include:

A check-in program in which customers posting Facebook or Foursquare check-ins earned “chips” toward earning prizes
A Twitter campaign in support of its annual Free Queso Day promotion
A Facebook contest “Raise the Salsa Bar” in which 700 people submitted salsa recipes, one of which will be offered in Moe’s locations nationwide next year
Mobile advertising in support of Free Queso Day, targeting mobile users within five miles of Moe’s locations on the day of the event
Ordering through Moe’s mobile app

Moe’s social media strategy is effective because the company understands three keys to social media marketing success:

Give people a voice by inviting them to participate – Submitting salsa recipes as well as having Facebook fans vote on the 10 finalists
Reward people for their engagement – The mobile check-in program and spreading the word about Free Queso Day through Twitter hashtags and Facebook posts are ways to give something back to customers and encourage them to bring more business your way
Measure performance using metrics relevant to the business – Likes and followers do not translate into dollars; Design social media campaigns so that their impact is traceable. Moe’s measured activity (e.g., the number of mobile check-ins and number of tweets) and outcomes (an increase of 18% in net profit was realized for the Free Queso Day promotion).

Social media is not a stand-alone activity that is separate from other marketing tactics, nor is it separate from overall business strategy. Evaluate your social media strategy to determine if the elements of invite, reward, and measure are in place.

Marketing Daily – “Moe’s Southwest Grill: Hot on Social, Mobile”

Showrooming: Be Resourceful, not Resistant

E-commerce has represented a threat to brick-and-mortar retailers ever since online sellers began hanging out their virtual shingles in the late 1990s. However, the threat has intensified thanks in large part to smartphone capabilities. Shoppers scan bar codes to do comparison shopping, look up user reviews, and visit retailers’ web sites to gather information. Any of the above actions can come between a potential buyer and a making a sale. But, according to research sponsored by mobile marketing company Vibes, retailers should adopt a different outlook than the fear created by “showrooming” customers going online to make purchases.

Findings of a survey of 1,000 phone users point to mobile marketing being a valuable information resource for shoppers as they make in-store purchases. Highlights from the survey include:

84% said they used their phones to do research while shopping in a store
48% of those who had used their phones to do research in-store said they felt better about their purchase
6% abandoned a potential purchase in-store and bought from a competitor, even though 33% of those who had done research with a mobile device visited a store competitor’s website

The main takeaway from the study is that consumers use mobile devices as a resource to aid in making buying decisions. It is not necessarily a competition to see which seller has the lowest price as much as it is which one delivers the best buying experience. Thus, retailers should embrace the mobile consumption habits of their customers, not loathe them.

The key is to meet customers’ desires for information by creating relevant mobile resources. QR codes, mobile-device-friendly websites, and custom applications are three mobile experiences that can be developed. “Relevant” is the key word – how many times have you scanned a QR code that takes you nowhere in particular, maybe the brand’s website home page? In other words, there is often no strategy behind the technology.

Shoppers want information. Retailers that act more like a friend and become a dependable resource for information via mobile marketing stand to benefit, both online and in their stores. Commit to being resourceful, not resistant, for customers showrooming in your stores.

Data and Targeting Insider – “Showrooming is More about Confidence than Comparison”

Think Beyond Transactions for Mobile Marketing

Creating mobile apps for your business today bears some similarity to developing a website circa 2000. It is still novel, all of the “cool” brands are doing it, and there are potential business benefits… you just may not be sure what they are. Perhaps you have come to the conclusion that the amount of revenue that a mobile app would generate does not justify the time and expense of going mobile. However, findings from a recent study by Deloitte Consulting on mobile shopping may change your thinking.

According to the study’s results, mobile marketing influences 5.1% of all retail sales in the U.S. That means 95% of sales are coming through other channels, so if mobile is not pursued right now that’s OK, right? Nope. You must look beyond direct sales to find the influence of mobile apps. Some of the most interesting findings included:

50% of consumers surveyed owned a smartphone (and penetration will continue to increase over time)
Conversion of shoppers using a retailer’s mobile app is 21% higher than those not using the app
The influence rate is expected to reach 17-21% by 2016, translating to more than $600 billion in retail sales

These figures are impressive, but long-term forecasts of emerging technology adoption often are overstated. So, let’s take a look at the influence mobile apps have on shopping behavior as evidence of their value:

25% of shoppers use a retailer’s mobile app the day before a planned visit to the store
52% use a retailer’s app on their way to the store (let’s hope they are not driving!)
61% use a retailer’s app while in store

These statistics reveal the true influence of mobile apps today – they are a valuable information source before and during a shopping trip. Tech-savvy shoppers that know what they are looking for or prefer not to seek out help from a salesperson are using mobile apps as a resource to assist in making buying decisions. Mobile apps represent an opportunity to persuade buyers at a very critical place – in front of merchandise. And, apps do not call in sick or expect raises like salespeople (coming from the former retail manager in me).

Consider what a mobile app could do for your business. Informing customers, engaging them with your brand, and of course, facilitating transactions are appealing incentives for going mobile.

MediaPost Research Brief – “Mobile Shopping Growing Exponentially”

Dialing Up a Better In-Store Experience

The retailing industry is going through a period of significant change in terms of how customers interact with retailers. The days of the in-store experience being the dominant customer touchpoint are over. The advent of the World Wide Web gave shoppers a virtual shopping option. Despite predictions to the contrary, brick-and-mortar stores have not disappeared due to the emergence of e-commerce. Now, the evolution of mobile communication leads many retailers to again predict a revolution in shopper behavior.

According to a recent study by Motorola Solutions, 74% of retailers surveyed believe creating a more engaging in-store experience will be critical to business success over the next five years. Technology-assisted interactions are expected to play a significant role in shoppers’ behavior. Among key findings pointing to a more significant role for technology in retailing:

56% of all transactions will occur via mobile point of sale, self-service checkout, or a shopper’s mobile device
42% of sales will come from online, mobile, and social commerce sites

Exciting news – shoppers are embracing technology to make purchases… or is it exciting news? These trends should serve as a wake-up call for retailers that have resisted enhancing their interactive experiences for shoppers. It is understandable why retailers might be reluctant to quickly react to the forecasts – we have heard similar proclamations before. The Web did not make traditional stores obsolete, and while smartphone capabilities have definitely changed how we shop, brick-and-mortar stores are not going away anytime soon.

Regardless of whether the forecast for mobile commerce over the next five years comes to fruition, the survey’s findings should serve as a call for retailers to step up their m-commerce game. It is evident that retailers know the stakes are higher to meet shoppers where they are and deliver value by providing information, coupon offers, and transaction convenience. The key for retailers will be make understanding the customer shopping experience a priority – not what they think shoppers will want but committing resources to learn and understand what customers expect from retailers.

Marketing Charts – “3 in 4 Retailers See Improved In-Store Experience as Critical”

The App Store: Fad or Fixture in E-Commerce?

Apple has made the app store a seemingly must have addition to the business model of firms that sell software via online channels. It is believed that Apple has gained more than $1 billion in revenues from its apps store. Now, Amazon will try to replicate Apple’s success by marketing apps for the Kindle e-reader. It is a dream scenario: software with low price points, no physical inventory, and no shipping costs. Do the success of Apple and the launch by Amazon signal a significant shift toward app stores sprouting across the Internet?

According to an article by Farhad Manjoo in February’s Fast Company magazine, software developers and brand marketers should probably refrain from looking to app sales as a prime revenue source in the future. The reason? The history of software development for interactive communications has been based on the idea of open development. That philosophy has clashed with the tight control Apple has exercised over the content created by developers of apps for the iPhone. Apple is obliged to control content associated with its brand, but it comes at a price- creating a disincentive for some programmers to innovate.

Certain brands will likely thrive selling apps. Apple has already proven that it can succeed. Amazon seems to be a good candidate given the success of Kindle. Adding more capability to the product via apps should make it even more attractive to current and prospective users. Otherwise, apps revenue will be a modestly small part of revenues for most firms. But, as the long tail of the Internet has shown, revenues will not always come from “home run” products. Niche markets exist; its is up to software developers to create apps that meet the needs of small customer segments.

Fast Company – “Why App Stores Are Not the Business Model for the 21st Century”

Mobile Marketing Key to Multichannel Strategy

Mobile is where the future is for customer interaction, according to a study by Forrester Research. Evidence cited to support the conclusions of the study include 36% of persons surveyed access the Web daily from their mobile devices, and 25% use their mobile devices to research products. The trend toward increased mobile device usage further challenges marketers that are struggling to keep pace with other trends such as greater broadband access and the explosion of social network participation. According to another Forrester study, only about 1/3 of marketers believe they are capable of delivering a consistent customer experience across all marketing channels.

Unfortunately, it is possible that too many marketers view mobile marketing as a fad used by only a small percentage of the population. The Forrester numbers on Web access via mobile devices suggest otherwise. As smartphones such as the Motorola Droid and Blackberry Storm 2 hit the market, it will likely fuel interest in a category already stoked by the Apple iPhone. Another reason that marketers may be holding back on mobile marketing efforts is that if their scope of operations is a local geographic market, they may feel the impact or ROI of mobile marketing would be too small to matter. This rationale is similar to what many small businesses expressed 10 years ago about web sites and more recently, a branded presence on social networking sites.

Embrace mobile marketing, not because it could lead to incremental sales (although it could), but because it is where more customers are conducting their business! You would not open a store in a location that draws very little traffic- you would locate where the customers are. The approach to channel strategy should be no different.

Online Media Daily – “Forrester: Mobile Will Become the Hub of Multichannel Customer Relationships”

Teens and College Students to Marketers: "Text Me"

E-mails are so old school, at least to many of today’s teens and college students. A recent survey conducted by eROI found that more than 6 out of 10 people in these groups say they hardly ever read e-mail messages sent by marketers. Perhaps the main reason for dismissing e-mail is that many of those surveyed said marketers do not effectively talk with them on a personal level. Text messaging has overtaken e-mail as the preferred communication mode of high school and college students in the U.S., with 37% of students surveyed indicating texting as their preferred communication mode. E-mail is not exactly dead yet as 26% of students surveyed preferring e-mail communications.

This trend poses significant challenges to marketers trying to reach this important but elusive demographic. Mobile marketing is an emerging area, much like e-mail was 10 years ago. Creating permission-based mobile marketing programs that maintain relevance with young people should be the focus. If marketers think only in terms of using mobile marketing to stimulate sales, it is likely that their audience will see through those efforts and grow tired of them quickly. Wireless devices hold great potential as a marketing tool because they provide a 24/7 connection to sustain brand relationships with customers.

Link: eMarketer – “Have Students Graduated from E-Mail?”