This interview was written and first published by Roger Ström, Visiting Lecturer, Marketing Halmstad University, Sweden.
With a thoughtful approach and consistent implementation, mobile marketing holds a huge potential for retailers. The pitfalls are many, however.
The mobile phone has still not made a substantial impact as a new marketing channel. There are many examples of more or less successful attempts, but these have largely been individual campaigns, not as a permanent channel of communication. “Technology providers and mobile operators have long been pointing to the area’s potential for marketing, but still the majority do not use the phone for other things than normal phone calls and text messages, “says Martin Vendel, independent consultant and former Head of Product Management of mobile services at the largest Nordic and Baltic operator TeliaSonera. However, the market is gradually maturing constantly giving more favourable conditions. The vast majority of phones are now able to connect to the Internet and data transfer is not a problem anymore, thanks to 3G. Operators plan to or are implementing the next generation of mobile networks, “4G”, with the potential of reaching download speeds of 100 megabits per second. All phones sold today have a good high resolution colour screen. Pricing for data traffic is reasonable and close to understandable for customers. “Since the launch of iPhone, we see an increased focus on usability by all stakeholders. All these positive trends make mobile marketing even more interesting as a new channel of communication for both customers and retailers. Now the time is right to evaluate what mobile marketing can do for each player in the retail sector, “continues Martin Vendel.
Retail mobile campaigns have historically been primarily SMS-based. Retail clothing chains, such as H&M, have achieved good response on campaigns designed to drive traffic into their stores. According to the U.S. research firm Forrester more and more companies are still planning new marketing campaigns based on SMS, e.g. large one-off promotions or special offers. But is this trend sustainable? “The situation can be compared to the development of e-mail marketing in the middle of the last decade. Tolerance to increasing amounts of unwanted messages in your inbox is not likely to be greater today than fifteen years ago, “says Martin Vendel. The problem with spam to mobile phones was early identified and resolved in markets such as Japan. There are few examples where legal fines are imposed to companies spamming users with sms. The problem may be considered to be limited but with the expected increase of campaigns, the issue may arise again.
Mobile marketing can be seen as an extension of the web. Anything that can be done online can also be done using a mobile phone connected to the Internet. “Modern mobile phones are becoming more and more like small computers. But do not make the mistake to regard the mobile as a normal computer. The services must be adapted to the mobile’s tiny window and the phone usually lacks a proper keyboard,” says Martin Vendel. Furthermore, data capacity is still significantly lower compared to fixed broadband. This leads to further constraints on capacity-demanding services such as moving images.
The computer screen size, image and sound quality is well suited for large, multi-sensory, brand communications, while keyboard and mouse facilitate more extensive search, comparison and evaluation of information for purchasing decisions. The limitations of the mobile phone make it more suitable for simple messages in a simpler format, with less extensive search patterns.
The mobile phone is personal and almost always directly available to the user. It holds the potential to become the perfect media for communication close to and at the time of the purchasing decision, as a tool to support customers in their purchases in store. “I think customers shortly expect all retail chains to have a mobile service where the most basic functionality is available,” says Martin Vendel.
Features such as find the nearest store, goods in stores, expanded information about goods, other customers and “expert’s” opinions on products, other channels of supply and prices simplifies customers’ search process and decision. Shop capacity and sales can be increased by an increased degree of customers self service and by an increased conversion rate of buying customers not leaving the store because of lack of information, suggestions or not finding the right goods.
Loyalty programs may increase their value to customers through increased accessibility utilising the mobile phone. Enabling access through the mobile phone of features such as shopping lists, personalized tips and advice, bonus balance, account balance, discount and bonus offers and coupons, and club cards, will increase their relevance and value as being used in store and during a purchase. Coupons and club cards are for instamce often forgotten at home, especially within the consumer discretionary sectors.
You should have a realistic expectation on the mobile channel and it´s contributions. It is not realistic to expect that it will solve all the challenges and replace existing channels immediately. “It is more realistic to expect that only a few percent of the customer base migrate over to the mobile channel initially. Then it is up to the company to train and reward their customers so that they migrate to the channel most valuable to both parties, “according to Martin Vendel.
In the choice of technical infrastructure, it is important to select solutions that can be used by as large fractions of the customer base as possible. In this perspective, SMS has up until now been superior to more advanced services. There have been numbers of barriers for an easy access to Internet based mobile services such as incompatible mobile operating systems and operator phone settings. More advanced applications giving a superior user experience are available for smartphones such as the iPhone or phones built on the Android operating system. These applications do, on the other hand, only work and may be accessed through specific phone models, and cannot yet be seen as general solutions. Today there are good alternatives, such as the service Squace, which can reach the majority of customers independently of operating system and with all the functionality needed.
Companies that are evaluating and planning implementation of mobile marketing should according to Martin Vendel, consider the following:
- Revise and clarify your online strategy carefully. Build mobile extensions to existing web functionality, where it makes sense and brings value.
- Mobile marketing will not replace existing channels, but should initially be seen as complementary. Attention must also given to clarifying the benefits and role of mobile marketing compared to other channels. Mobile marketing has to be an integrated part of the overall marketing, including other channels, to maximize synergies.
- Start with features that have high value for the customer and which are relatively simple and inexpensive to implement.
- Each company’s needs are unique. The solution should be based on existing systems and aspirations of digital marketing as a whole.
- The mobile channel will initially attract only a small but growing share of the customer base.
- The content of a mobile site must be constantly renewed so that it is not perceived as dead, this is even more important on a mobile site compared with online services.
- Encourage and educate the customer base to gradually incentivise them to move to more efficient and profitable channels.
- Mobile and the existing online services should interact and be based on the same technical infrastructure to achieve efficiency.
- Choose a rather simple and straightforward system that will not be expensive nor inflexible.
- The mobile service should be possible to be directly managed by the marketing department, so that marketers do not become dependent on suppliers or internal IT bottlenecks.
When done right, companies will find solutions that meet their unique needs while maintaining a good flexibility. Furthermore, these investments will create substantial value within a short time period.
In summary, the time is right to learn more about mobile marketing and what it may bring to each individual business. The potential is huge. Unfortunately, it is very easy to make mistakes in this area, which can be costly and could harm customers’ trust in the specific brand.
Most retail chains and brand owners today investigate mobile marketing as a new way to improve customer interaction. A number of players offer different platforms for different elements of mobile marketing. It is not easy to understand pros and cons of the different options and what’s best for one company may be quite wrong for the other. There are some key questions to be answered before it’s possible to know what may be the best solution in a specific case. These questions are:
- What do we want to achieve on the market?
- Where are we now and what’s missing to be able to reach the marketing targets?
- How mature is my company and the targeted customer segment regarding digital marketing and mobile devices?
- How glossy and rich does the mobile experience need to be?
- How much can I allow this to cost per impression/interaction etc?
- How flexible should the chosen solution be, would I like to add new features and services?
The table compares different solutions for Internet based mobile market communication. The solutions compared are: web – just let customers brows the existing web site over the mobile; WAP – mobile format site based on WAP; own client – separate java client to be downloaded as any java client; app – application for an app store; UMI – integration of existing web services to a UMI platform. The properties listed are: user experience; no need for a client to be down loaded; look and feel; own development needed; initial cost; operational cost; flexible and can easily be upgraded with new functionality; time to market; addressable market; distribution efficiency – how easy is it to get customer to get started using the service.
As can be seen in the table there are some key considerations to make depending on the ambition level and the expected value of mobile marketing. My key point is of course to illustrate the strength of UMI compared to other alternatives. Whether UMI is the best option does however depend on what you would like to achieve. I feel that many companies rush into exploring the possibilities with mobile marketing without first really analysing what it is there to accomplish and how it supports the overall marketing strategy. I strongly recommend all to view mobile marketing as one out of many components in the marketing communication mix and also that all options are carefully considered to avoid unnecessary costs and getting stuck in a solution that is impossible develop further to meet future needs.