Mobile marketers stand at start of long journey

24 June 2010 | By Lou Cooper

In association with

MW: What is your biggest challenge in implementing mobile marketing?

PD: First, the practical side of things - getting your mobile app or website running and then choosing the right marketing. When introducing new systems into a business, you’ve always got IT hurdles.

It’s a learning process to understand who your mobile customer is. Are they the same person who’s accessing your standard website and your other touchpoints across the business?

Mobile is exciting from the point of view that it’s a new frontier, but I don’t think anyone out there right now has got all the information or is an expert on this medium yet.

SA: It’s about earning the right to talk to your customers in that environment. You’ve got to be invited in, instead of invading their personal space. Building that engagement, particularly in the financial services sector, you really have to do a lot to get people to reach out to you.

CR: Your mobile is very personal - you carry it with you everywhere. For an organisation, it’s difficult to identify what the objectives of using mobile are - whether it’s revenue making, profit and loss, brand-building or customer service.

RA: There’s a problem with fragmentation from a media owner perspective. We’re having to build products for so many different platforms. If you try to give the best experience on a smartphone, you’re ignoring your customers who don’t have a smartphone. And which platform do you choose? Google Android? Apple iPhone? I think a lot of us are looking around and trying to bet on which platform to go for.

CM: We need to gain customers’ trust. In the early days of mobile marketing, there was a lot of untargeted, unpersonalised SMS marketing and that offended people.

With the explosion of the iPhone and other smartphones, there’s a big rush from the top of organisations to get an app out there. But more than 3 billion apps have been downloaded for Apple’s iPhone. That means it’s quite difficult to get a share of the audience. How do you get a good conversation going with people rather than just marketing to them?

ML: There’s definitely an excitement about this area within brands, but you have to take a step back and ask: what is the application of mobile that’s going to make sense to my customer?

In our case, there’s only 3% smartphone penetration within our largest customer group. So you begin to wonder: how relevant is this? Should weuse it to try and drive the bottom line? At this point, that’s not really going to make sense for us.

There are some great mobile commerce sites out there, but how easy are they to use? It’s great to see other people getting into this space, but I’m not sure how functionally viable it is for us with the current technology.

JF: The biggest challenge is relevance. Mobile is one of the most intrusive media, if you plot people’s reactions to it. It’s considered more intrusive than direct mail. The experts in direct mail have worked out that if you can make it relevant, targeted and something people want, they will live with it and learn to love it. Exactly the same is true of mobile.

MW: How do you know if developing a mobile application is going to have a real commercial benefit to your business?

PD: It’s difficult to judge, but one good guideline is to look at how mobile can support your business - see it as a service medium, rather than just seeking to replicate your existing online catalogue. See how the mobile channel can offer something different.

Then you’re not just producing a mobile app because you feel you should, but because it’s actually offering your customers an extra service. Don’t just think about the amount of money it directly generates for your business, but how it might add value to your existing offer. If you start like that, you can get a better idea of what type of person might be your business’ mobile customer.

JF: A really simple idea is to test it on your customer before you launch. There’s this idea in the digital world that you don’t test things like you used to test advertising. But if it’s not good, you might die out there. It’s very simple to go back to the basics and expose people that are going to use it to it before you go live.

JM: The app store is unlike any other kind of platform we’ve ever experienced - you live or die on the basis of user recommendation. A product manager has no control over what’s said about your brand.

The commercial model doesn’t matter. Failure and success are incredibly visible. There is a huge need to truly consider what your objectives are because you will get heavily criticised in a very public, global arena if you produce something that your customers don’t like.

MW: If you are creating a non-transactional app, what should it do?

UA: At Procter & Gamble, we look at apps in two ways. There are entertainment and utility apps, both of which need to be rewarding and relevant for their target group.

You always need to ask: what is the role of that app within the consumer’s path to purchase? Once you’ve established that, you can develop the right type of app. We recently launched a Pringles app for the summer football season and it’s purely for entertainment - that’s its role in the path to purchase, within an integrated marketing plan.

If you look at mobile in isolation, you’re really cutting off your nose to spite your face. You need to understand how it fits with everything else you’re doing.

JA: A great example for us is Axe [Lynx in the UK]. We found this interesting consumer insight that young guys use their mobile phone as their alarm clock. We sprinkled a bit of “the Axe effect” on an iPhone alarm clock and created an app called Axe Wake Up Service, where young guys get woken up by their favourite Axe angel every morning. It’s about moving away from interruption to engagement.

Guys are using the Wake Up app on a daily basis. They are having a regular interaction with our brand. The app is designed to become more engaging as you use it, as well as more risqué as it goes on - or the girl gets upset if you don’t use it, which is just like real life.

For us, this fulfilled both our objectives in terms of entertainment and utility, so we see it as a huge success.

JF: I think a big opportunity for FMCG businesses outside of pure brand communication is sales promotion. Imagine that you’re going into Sainsbury’s and the app reminds you that something is three-for-two at the very moment you’re entering the store. FMCG brands can make the most of apps by using location and time-specific reminders.

MW: Speaking of sales promotions, how is mobile changing the way consumers use vouchers?

CM: Just 1% of all paper coupons are actually redeemed, whereas if you look at some retention-based campaigns that we’ve got running with digital coupons, redemption is up to 50%.

Mobile has an advantage over a typical paper coupon because it’s precisely relevant. If someone is a Nectar customer, you know what they’re buying and when. So on a Saturday, when that person normally does their shopping, you can ping them a message saying: “Two for one on Olay today”. That coupon is specific to them.

UA: Mobile vouchers are great as long as you can redeem them - there are still far too few retailers on board who recognise the opportunity that targeted mobile vouchers can bring to their stores.

JF: It’s not just the complexity of having three mobile platforms to build on, but every retailer’s got different scanners too. Getting them to work in all the places that the consumer wants them is a massive technological challenge.

MW: How are location-based services changing the way we use mobile?

SA: Barclaycard Freedom has an augmented reality app which is location-based. If a customer has the app turned on and is walking down the street, it recognises where they are and shows, through the use of icons, where they can take advantage of special offers with our retail partners.

JF: If you’re talking about receiving marketing the moment you’re going in store, I think that’s pretty good location-based communication. If you’re talking about walking down the high street and every time you walk past a shop, you get an SMS saying: “Money off here”, then that’s going to get intrusive pretty quickly. We need to be quite careful with what we mean by location. It has to be about micro-location, not just the high street.

CM: What we did with [property service] Rightmove is interesting. You can walk down your road and see a For Sale sign. You press one button, it locates you and you can see inside that house. It’s a really nice user experience and the customer has clearly opted in.

CR: Location is probably one of the best ways to service a customer. From the insurance side of things, all the apps out there are accident-based. You have a crash, you take a picture, your location is signposted and you can send the claim form off straight away.

MW: So how do you pick the right location or time-based technology for your brand?

RA: I’m still working on that. For SMS, you’ve got to have the data in the first place. And we can’t spam all of our UK channel subscribers, texting them when there’s a Premier League game on. If I’m a Manchester United fan, I might not care that Chelsea vs Manchester City is on. In fact, I’ll probably have a negative reaction.

SMS, MMS and Bluetooth are all interesting technologies for big sports events. For example, we might be looking to market to fans in a football stadium. When you go to that stadium, the mobile network is awful and you can’t connect. So then you look at Bluetooth, but not a lot of people use it or leave it switched on. So we need to first put pressure on the networks to improve their coverage generally.

JF: It’s not just sports stadiums. The irony is, some of our supermarkets are giant metal boxes and mobile phone reception is not good inside.

MW: How do you price mobile services? For example, how much should a branded app cost?

JM: We did some customer research into our Apple iPhone app and the variety of pricing figures that came back were ridiculous. We had to think very carefully. We felt a small charge was viable considering the investment that The Guardian had put into it.

It was always going to be somewhere between £1 and £4.99. But you are valuing the brand. Had we launched at 79p, it would have been wrong on three levels - the investment that we put into the app itself; the quality of the app experience; and the quality of the brand itself. We wanted to go midway at £2.50, but £2.39 was the closest we could get given the pricing structure that Apple uses.

MW: How do you decide whether to make it a one-off charge or a subscription?

JM: In the UK, we don’t have a subscription model - 95% of newspaper sales are daily copy sales. We always said we would look at all commercial models and that includes advertising and sponsorship. But moving straight to a subscription model would have been too much for the customer; they would have rejected it outright.

RA: There’s a lot of talk about News International and what it is doing [charging for its Apple iPad app]. Most people using it will already have an account with Apple, so for them it’s just a case of typing in their name and password.

MW: Is there a case for retailers to create paying apps offering special deals via mobile?

ML: Not for value fashion retail at the moment. We’re all about offering incredible value and new products drive our customers. They have this huge appetite for new, exciting fashion - that’s how we drive loyalty through our communications.

The appetite is for the product itself and I don’t want to put any barriers such as a paywall between a customer or a potential consumer interacting with our product or content. I want to make things as open as possible. We are a value retailer. At the other end of the retail spectrum, that could be different.

UA: Consumers already expect branded apps to be free. The market is established. The early adopters were there a few years ago and we are now seeing much higher smartphone penetration. That is now the rule of the road.

JF: From a consumer’s perspective, there is so much trust in the Apple brand that I wouldn’t rule out people paying for branded apps in future.
If a company offers a product or discount that is just right for a certain demographic for a price of 99p a month, I don’t see why that wouldn’t work. Say I spend £50 a month with a brand and it says: “If you subscribe for £1 a month, we’ll save you 20% off your next three purchases”.

Why wouldn’t I do that?

CR: It’s the power of the brand as well. Do you want that branded app on your iPhone? Apps are a badge of honour.

JA: It’s a value exchange and we’re all trying to figure out the right model. In Brazil, we have a partnership with Nokia where we’re creating branded phones and within those handsets come branded apps. Indirectly, we’re charging a bit more [because of those].

We’ve done that with our Seda hair brand and with Knorr. We’re trying to find out what the value exchange is for consumers. In the world of Seda, it’s beauty tips and hair regimes and in the world of Knorr, it’s recipe finders.

MW: Do you think mobile commerce is set to take off?

CR: I know mobile banks are coming up with PayPal-style services where the trust and security worries are removed. You walk into a store, get the barcode and go to the PayPal on mobile account and it’s done for you. That is business aligning with technology.

SA: I can’t say too much about Barclaycard in that area, but I think it is fair to say that there are a lot of people out there who are actively lookingin this space and working to get rid of any trust or security barriers. We believe that there will be mobile payment opportunities in the not so distant future.

UA: But if your phone has a whole load of apps and each of them links to a [bank] account with all your money in it, the value of your phone if you lose it is magnified.

MW: So which brands are getting mobile marketing right?

PD: In UK retail, there’s a lot left to be desired. Beyond mobile websites and token apps, there’s not a huge amount out there.

RA: The Rightmove application is so simple and it’s the kind of thing that a lot of people download, even if they’re not particularly interested in buying a house. People are curious about that kind of thing - they want to have a poke around and see how much it costs. Lots of their competitors are moving to do similar things.

SA: In the loyalty space, Vouchercloud has been very impressive in terms of what it’s built up and its ability to reach people in a location-based way that’s relevant.

MW: And what should you not do with mobile marketing?

JM: We are still at the start of this journey. There is nothing worse than being preached at by an “expert” because we can’t yet lay claim to that status. Perhaps in 50 or 100 years, we’ll be able to talk with some maturity about this, but we can’t at the moment.

However, I am amazed that the banking sector hasn’t got more involved in the iPhone. There’s an opportunity to achieve a compelling user experience on mobile that isn’t there elsewhere.

JF: Marketing has always been about sacrifice. How can you get the message across in the minimum number of words? Part of the challenge here is that digital technology specialists are often running the show and it’s really important that marketers put ourselves back as the filter and ask: does this work? Is it simple? Is the person using it getting what they want?

CR: I sit on the fence between marketing and IT and there aren’t really that many financial companies out there who’ve really gone deep into their back-end systems with mobile. Particularly in the UK, most of the banks and the financial services didn’t pop up yesterday. They’re a couple of hundred years old, so opening those systems up for mobile is not that easy. All the apps you see are quite fluffy, front end, smoke and mirrors.

SA: The banking sector is working on it. With trust and security, it has to be faultless.

MW: What are the future trends that will be important for mobile?

PD: We’ve got 4G coming up. We’ve got the iPad, and we’re now talking about mobile as a separate channel from the web. However, you can imagine in 12 or 18 months time we’ll just be talking about “computers” in general.

CM: It’s going to be difficult soon not to buy a smartphone. I think a big moment is going to be Boxing Day this year when most people will have opened up an Android-enabled mobile on the previous day. Bam! They’re online.

CR: We’ll start seeing massive change when there is a single mobile operating system that can bridge the gap. At the moment, it’s really hard.

Do you go for an Apple iPhone or for Android? It’s going to have to change eventually.

We’ve also been talking about business-to-consumer marketing quite a lot. I think the trend is going to be business-to-business and even more business-to-employee, as most staff have mobile phones so companies can do more internally. That’s probably the next big thing, particularly for us from a customer service point of view.

JF: There will be a convergence of mobile, web and the app so these won’t seem like three different things; they’ll seem like three points on a continuum.

SA: Device-neutral solutions are where we will hopefully end up. There needs to be a seamless transition between different channels. People now want to access their whole life from a variety of places and you need to give them the tools to choose where, when and on what device.