How Mobile Can Deliver Better CRM

Mobile is the most personal, direct and emotional of all channels. Whilst many brands integrate mobile as another vertical channel, there is an opportunity to create a deeper, richer engagement by taking a more horizontal approach across all channels. What happens if consumers see an ad on TV, or use their device in-store?

Numbers show that brands in the UK are so far struggling to grasp this opportunity. For example, Experian’s ‘Global Data Quality Research Report’ in 2012 surveyed 300 UK organisations, and found that 40% of UK companies currently fail to collect any mobile data at all.

Consumers today are connected to the world 24/7, and this constant use of mobile devices provides brands with pervasive customer data, all of which can help them understand the changing consumer behaviour. Using the example of a consumer that performs a mobile search after seeing a TV advert, what if you could pick up where the TV advert left off and continue to tell the brand’s story on mobile ?

With insight and an understanding of consumers’ contextual behaviour, brands can actually adapt and tailor their approach so that they can be more relevant, timely and useful to consumers than ever before, thus building stronger customer relationships.

BrandEmotivity’s whitepaper on marketing to situations and contexts (below) explores the problem with mobile as a vertical channel, the advantages and challenges brands are faced with in integrating mobile horizontally, and how mobile and mobile data can work to improve brand’s CRM strategies. Or you can download it from here 0n SlideShare.

 

Barclaycard PayTag: it’s mobile NFC, but not as we know it

The UK credit card company, Barclaycard are rolling out their PayTag NFC stickers to millions of customers in the hope they will attach them to their phones. The company has already been sending them to a selected few, but the recent announcement will see that scaled up to significantly more customers.

But is this a good thing for mobile NFC? This could certainly be a good way to introduce users to tapping their phone in to an NFC terminal to make a payment. However, unlike mobile embedded NFC the PayTags are essentially dumb chips that do not link to the the phone and have limited capabilities. Currently that capability is a £15 payment (rising to £20 in June). Native NFC is capable of doing so much more. It can link to a website, launch a video, add loyalty points, be used for event or transport ticketing.

In the UK the major supermarkets are rolling out NFC terminals as well as commitments from Transport for London to include mobile ticketing in their contactless system. The danger with PayTags is that it does not benefit the user significantly enough to encourage mass adoption of NFC.

Google Wallet: what’s right and what’s wrong with it

Last week, Google launched their contactless payment system, Google Wallet. They are initially trialling it in two US cities, New York and San Francisco. Besides a simple touch to pay wallet, it will also include the facility to hold and redeem vouchers on the phone. There has been a mixed reaction to Google’s Wallet though. Here is a run-down of the good and bad points about their NFC offering:

What’s right with it

  1. Google has the traction to make NFC payments happen. Whilst there are many companies in the mCommerce space, it takes a Google (well, Google) to get it into the mainstream. Given the number of providers getting into the sector, Google will help consolidate the market.
  2. Low cost of transaction. From a merchant perspective this could be the killer app. Google are not interested in making money from this but rather, using it to develop their search marketing base. They are therefore only charging the standard card-holder present fee. Compare that to the transaction costs of Premium SMS (35% or more), and Google Wallet become a bit of a no brainer. What’s more, for launch they are giving away the terminals and $100 worth of free transactions.
  3. Vouchering and discounts. Wallet ties in very neatly to Google Offers. In fact there are some that believe that Offers isn’t about beating Groupon, but rather connecting it to NFC. The idea is that Google Wallet users will receive offers that can be redeemed by touching in to a contactless terminal. As one commentator put it, it will ‘close the loop’ in the offers/payment system for merchants, and reduces the effort of having to print out or show vouchers for customers (http://searchenginewatch.com/article/2075862/Google-Offers-and-Payments-Its-all-about-Search).
  4. It goes well beyond payments and vouchers. Google wallet isn’t just a payment card, or an offers network. It will also be a ticketing mechanism, travel card and could even replace your house keys and let you into your home. Worried about losing your phone (and ergo your wallet and your house keys)? Google point out that people take more care of their phone than their keys or wallet. We know where our phone is most of the time, but do we know where the other items are? And the advantage of it being held electronically is that you can both quicky ‘cancel’ your keys and get a replacement. Much cheaper than a locksmith.

What’s wrong with it

  1. Getting sued by PayPal. OK, tech companies are always getting litigious with each other (just look at Apple and Samsung), but the legal threat from such a major payment competitor will make roll-out more complicated (http://www.webpronews.com/paypal-sues-google-2011-05).
  2. Lack of terminals. Obviously for NFC to work, there needs to be enough terminals in retail outlets. Google are intending to use Mastercard’s  PayPass as the reader. There are already 120,000 of the devices in the US – that sounds good, but in terms of retail coverage that’s a pretty tiny percentage of outlets. Some commentators believe that terminals will need to become ubiquitous to achieve mass adoption.
  3. Fragmentation. The market is already becoming divided. First off there is the operating vs operating system wars. RIM have already launched an NFC handset in the states, Orange and Barclaycard in the UK. And everyone knows that Apple is developing their offering in that space. Outside NFC, Square is making great gains and recently launched their CardCase which allows users to easily make payments through their phones. It is far from a given that Google will own the contactless space .
  4. Issues with Privacy. As one commentator said, it will be the end of anonymous shopping. That isn’t simply about being able to hide embarrassing purchases. It will be about freedom from being followed round by advertising. Google’s revenue model is all about advertising, so the primary reason for getting into NFC is to use the data to further ad revenue, particularly behavioural targeting. Google will know everything about your purchasing habits both on and off line.
  5. Concerns over security. It’s the question almost everyone asks when first told about NFC. What about security? Google have certainly addressed the issue by keeping the credentials separate to the OS along with a robust encryption.
    That’s still doesn’t detract from user concerns. Most people wonder if it’s possible to snatch a payment just by walking past someone. The answer is of course ‘no’. Both the proximity (4cm) and the encryption makes that hard (Google would say impossible). However there are some industry experts who also think that many hackers will try to compromise the system (http://www.eweek.com/c/a/Security/Google-Wallet-Security-Solid-Until-its-Hacked-566798/). After all, Android was hacked just a few months ago.
  6. Developer unfriendly. Fair enough, it’s a mobile wallet so you can’t exactly open up the data to everyone and their dog. However, that also means that Google is looking to succeed without the support of a developer community (http://www.i-programmer.info/news/81-web-general/2519-google-wallet-developer-unfriendly.html). That will make the whole thing much harder to realise. Surely there must be some kind of API that allows developers to interact with the wallet but raise security problems?

Linking the Wallet to their search and offers is a shrewd move by Google. Search is what they know. In the end, the success of Google Wallet comes down to one thing – consumer adoption. If the public believe that it makes life easier, is genuinely secure and that they won’t get endless offers they don’t want, then it may well be a success.

mCommerce can bring £billions to the UK … if only we had the data connections

A new study from eBay, suggests that the UK could be seeing if £4.5bn in mCommerce by 2016. The only thing holding it back are the poor mobile data connections. In a survey conducted for the online auction site by retail specialist Verdict, they estimate that 16% of the UK lacks the coverage for mobile broadband with a further 20% below average. That could result in a loss of over £1bn per year in revenues. In a study of 1500 UK consumers they found that lack of coverage, low speeds and reliability were the major barriers for mobile shopping. The costs of data is also an issue for many customers. The DMA/Empirix study published last week also found that consumers were ready to shop, but the brands were not providing the service.

eBay has sent the results of Ofcom and are pushing to speed up the delivery of 4g which will provide much faster broadband. Although 4G networks are rolling out in the US and elsewhere, the UK has yet to agree the terms on which it will be auctioned off. The operators claim they have not seen their return on the £30bn + cost of the 3G licences. Mobile is the fastest growing channel for eBay who expect to see over $4bn in sales this year. More on the report here.

M&S mobile site sees 1m+ uniques per day

Proof that mobile retail is the next big thing, M&S have announced that their mobile site saw over 1m unique visitors per day in December. Whilst high street retail sales were decimated in the last month of 2010, it looks like those brands with mobile sites were doing very nicely thank you. Sienne Veit, M&S’s head of mobile said: ‘We’re delighted, as this is confirmation that our customers are ready to shop in this way’. Whilst they haven’t released any sales figures the indication is that shoppers are ready to buy through their mobile. Increasingly the mobile site is the one that customers choose to visit at home, using their smartphones in preference to their PCs.

Starbucks offers Mobile Payments to Customers

In a very interesting move, Starbucks has introduced a mobile phone payment system to over 6,000 of their US stores. Customers with a Starbucks card can use a mobile app to make a payment on the card. They simply show a barcode at the till and the payment is taken. They can top up their card via PayPal.

With the world of mobile retail hotting up, there will be greater demand from consumers to make payments through their phones. However, there is a battle going on between various providers. In the UK the operators put their energy into PSMS and the web-based system PayForIt. However these payment methods have a limited future. It limits the kinds of things that can be paid for (mobile or web content only) and the high operator charges make it prohibitive for many brands. Looking ahead the future is likely to be in contactless or NFC payments, however outside Japan and Korea it has not taken off yet. Even in NFC there is likely to be a battle between operators, handset manufacturers and credit card companies for control of the channel.

So in the meantime brands are using their own payment methods. The iPhone appstore demonstrated how registered users could quickly make a payment against an existing credit card, which has extended into retail with the likes of Amazon’s one click payment system. Various providers have played with their own mobile payment systems, but few of them had the reach for it to take off. The move by Starbucks is significant though: 20% of their US transactions are made on the card. Given the large number of outlets from Starbucks their mobile payment system has a good chance of taking off.

Review of Mobile for 2010

Last year (and the year before) I made a number of predictions about mobile and mobile marketing for the year ahead. 2010 was a good one for mobile marketing. Mobile advertising came of age with AdMob and Apple’s IAd. Many retailers got into mCommerce. And Foursquare showed the potential of location-based marketing with their check-in offer. That’s just a few examples. Looking at last year’s predictions is also a chance to review the year as a whole. So how did the predictions fare? See below – I’ve marked myself out of 10 for accuracy.

Predictions from 2010

2010 will be the year of mobile advertising
8/10 a number of things happened to make mobile advertising a significant channel this year. At the end of 2009 Google acquired AdMob. Big. In June, Apple announced IAd. Very Big. OK, you may say, IAd has a tiny reach, but Apple announced that they had secured a number of brands, and significantly 21% of the mobile advertising market. Add to that the operator DM channels such as O2 More and Orange shots, and you can see that there was significant marketing activity. However, there’s still a long way to go – so I drop two points for that.

Mobile payments will become more common place
8/10 this was a pretty good prediction. I’ve taken off a couple of points as in-app payments haven’t taken off as expected, although the ‘freemium’ model has taken hold. Significantly, the number of mobile retail sites grew rapidly throughout the year. At the start of 2010 no high street UK retailer had a transactional mobile site. By the end, M&S, John Lewis, Tesco Direct and Debenhams all had full mCommerce sites (not to mention Barney’s in the US), with other brands such as Argos to follow very soon. Tesco’s did a study which showed that 10% of people will use their mobile for their Xmas shopping this year. In the world of apps, the likes of Ocado established themselves fully. At the start of the year they took 5% of their orders through their mobile app. By the end of the year it was 10%. Ebay and Amazon expect mobile commerce to overtake the fixed internet within the next few years.

More commercial and branded apps
9/10 with a few notable exceptions, they’re all at it. It seemed like every brand launched an app whether their customers needed it or not!

Behavioural targeting will be on the rise
5/10 it all depends on what you count as behavioural targeting. If you look at the mobile operators, there is very little targetting going on. The direct channels are opt-in to selected sectors, rather than targeted at consumer behaviour. That’s probably a good thing, as the public are very wary of this type of advertising. Still, I drop 5 points for getting it slightly wrong. However, it is strong and growing strong in other ways. Facebook is the ultimate behavioural targeting, and their ad revenue rose significantly. IAd is also a form of targeting, although it is through the apps they use rather than their actual behaviour online.

Privacy
10/10 it’s an issue that won’t go away. Facebook came into major conflict with their users over changes in their privacy policies. There was the Openbook controversy, which showed how much people allow the world to see, and not forgetting the Foursquare inspired, Pleaserobme.com. Although Facebook seem to have placated most of their users for now, it will run and run. Then there was Google’s legal problems over their storing of personal WiFi data … I could go on! When it comes to mobile in particular, the personal-ness of the device will always require careful consideration on the part of brands.

Android will become a major player in mobile OS
10/10 Easy! It’s strange to think that 12 months ago Android was nowhere. By Q3 it had overtaken the iPhone and BlackBerry to become the second biggest mobile OS. Much of that came not from Google’s phone, but a couple of excellent handsets from the likes of HTC and Samsung.

Mobile content and social media aggregation
7/10 I was correct in the intent – we want our social media and our content in one place. However the results weren’t quite as expected (hence the 3 point drop). For example, Vodafone’s 360 was poorly executed and even more poorly advertised. By the end of the year they had quietly dropped it. What happened was that the aggregation went on in the places that the users were already in. The main place is Facebook. With the addition of their email, Facebook are telling people ‘why go anywhere else?’

Apps will still grow – the mobile web cannot replace them
9/10 apps have grown massively this year in large part through Nokia’s OviStore, Blackberry World and Android Market. The mobile web has not replaced apps at that level. What has happened is that the mobile web offers a different user and brand experience. Many brands are developing both web and apps.

Augmented Reality and Image Recognition will not significantly take off
8/10 arguably it’s easy to predict things that won’t happen, but there was a lot of talk about these two in 2009. We’ve seen some great stuff with Layar on the AR side and Google Goggles on the IR side (hence the two points I’ve taken off). However, they are far from mass market. Most mobile AR apps are little more than location services. There were a couple of exceptions, such as the excellent Berlin Wall project. These show the direction it could go to make AR more exciting. Google’s Goggles is a great concept – image based search – but have you tried it? It simply doesn’t work very well. Whilst the possibilities are there, Forrester predicted that it would be some years before AR takes off on mobile.

Mobile social networks will not go it alone
10/10 yes we saw Foursquare and Gowalla, as(almost) pure mobile social networks, but Facebook is THE place for mobile. In the UK 50% of status updates come from mobile phones, and over 150 million of their users update via mobile. Foursquare, on the other hand has a tiny number of users, not only that but it has had to allow status updates straight into Facebook. And anyway, Foursquare isn’t social media, it’s a game. So yes, 10 out of 10 for the prediction!