Why is Mobile different for Push Contact Loyalty Programs?

I have been getting really upset lately (who me?) about this ridiculous view that Mobile is different when it comes to Loyalty programs. That all the same people who signed up for email contact (opt in) and agreed to accept contact later (push advertising) will behave differently with mobile? In fact I think it will be the opposite.

I lifted this from a Mobile Loyalty Program Provider:

Specifically, consumers engaging Mobile CRM programs are giving the brand 24/7 open-door access to their mobile device by telling brands, "I'm interested...here's my cell number...send me anything you want, that you think I might be interested in receiving."

Yes when you join a few SMS or 2-D Bar Code type loyalty programs you will at first engage. Then you will add a Geo-Fence or 2 where as you drive by somewhere a deal is sent to your phone. Then you will have 50 then 100 etc. And then presto just like email....EXCEPT.....with email its in my email. My phone isn't buzzing every time I am contacted. And the day my phone starts buzzing every time I am contacted I will eventually hate my phone or the Brand that is harassing me.

So how do you fix this? Obviously making all the contact email style brings back the same email problems! Lack of response, apathy, delete unopened. Is the in box on my phone different than on my laptop? No it isn't.

I tell clients to be respectful. Condition your fans who love your products, your brand etc to connect on their terms. Let them know that they can access/contact you via a mobile APP or website or send a SMS or 2-D bar code that allows them to see what your offering. For non-fans you need to contact them outside of mobile and use the right reason for them to Opt-In for a call to action campaign.

And for Loyalty programs see my old post on them:
LINK

I suggest tying rewards to purchases or visits. Use FourSquare or similar. Set up an APP that purchases get saved and add up so after reaching some goal they get something. But to take someone's cell number and just send them offers repeatedly is going to piss them off and you could turn someone who likes you to someone who hates you very quickly.

Yes it is the Freaking R.O.I. Damn It!

This is Case Study number 1387 on why CFO's come down on the CMO's for R.O.I.

Mobile Commerce Daily Article on Taco Bell Mobile Coupon Campaign

I know all you 'Creatives' cringe. I know all you 'Branders' don't like this stuff. But us Finance/Sales folks need to measure stuff. And I am going to be the first to defend some things that help create value that are hard to measure. But when you come to me and report on the actions taken with Mumbo Jumbo like this article that would have me write off Marketing from the budget. Chihuahuas wearing Sandwich boards would be a better value.

In this case study Taco Bell signed up 13,000 people into a mobile coupon campaign. Taco Bell has 5,800 stores. It seems 600 participated. That's 21.6 people per Taco Bell signing up over 5 weeks. So 4+ per week?

This is a totally measurable campaign!!! And no one measured it? I will state maybe the data was not shared with the Journalist. Is that because the data sucked?

CFO: This campaign cost us $75,000? How much new business did we get?

CMO: We signed up 13,000 people.

CFO: We have 87 million unique customers in the US. How much new business did we get?

CMO: We sent out 29,000 coupons.

CFO: How many of the coupons were converted/turned in?

CMO: Well 93% stayed in the program.

CFO: Did they have a choice to stay in the program or know they could leave it?

CMO: Well 61% responded to our follow up survey?

CFO: Your fired.

Fact: This could of been a measurable success story if the CMO (Or Agency) could prove they made money or showed increased loyalty. But hey who measures profitability these days anyway?

The Falsehood behind Mobile Marketing Loyalty Programs

I have railed against Mobile Loyalty programs that after the initial sign up are really just push advertising to your phone. My specific beef has been that once you sign up for enough of these they pretty much all become spam, kind of what email is today. And in my opinion truly powerful mobile marketing is initiated by the consumer with a call to action, then an action taken. passively receiving notifications and offers is not powerful.

But my beef here is terminology. A true loyalty program earns points, or tracks your spending, like frequent flier or your super market club card. Other great ones are the business card size punch cards for buying a number of coffees or sandwiches you eventually get one free. Or even the drink buy backs at your favorite bar.

Most SMS Loyalty Programs I read about in the Advertising Trade Pubs start with a Call to Action SMS Text to get a coupon and then be entered into the loyalty program. The programs state 'to receive special offers in the future sent to your phone' vs 'once you spend X amount we will send a special payback to your phone'. But if I push offers to your phone unless there is a method to track your customer's spending with you, its not a loyalty program. If I get coupons sent via SMS saying we appreciate your business without having to buy more stuff to earn it, where is the loyalty? Isn't that just a give me your phone number and I will text coupons to your phone program?

Furthermore, if a customer who has your business in their regular rotation, unless there is an incentive for them to increase their spend and their patronage, you need to remove the loyalty title and just call it a coupon campaign. And if people expect to always have a coupon or discount every time they show up, your list pricing will stop being looked at as 'the price' vs the 'discounted price'. That can be deflationary to your revenues.

For example if I always discount my chicken wings from $7.99 to $5.99 your view eventually will be your buying a $5.99 product. And expect $5.99 quality vs $7.99 quality.

So unless your running a true loyalty program, call it a creative discount program. Make your special offers unique to draw them in. Make the customer think this won't be around next week, vs. knowing like clockwork the same discount will be showing up in their in box every 3rd Monday of the month.

The Coming Mobile Commerce Destruction of Retail Profits

I have been kicking around this scenario for a while. It should strike fear in all retailers (and somewhat for Brands too). It will erode customer service especially in times of economic recession when 'price' trumps all else because profits have to be made so service might be cut. And with the increasing power, abilities, and breadth of mobile smart phones and eventually tablet computers small enough to take around with you this will be the bane of brick and mortar stores.

When we shop online we have the ability to compare prices. Thank you Search Engines! Soon we will be doing this in stores that sell 'Commodities'. Commodities in this case is anything I can buy (same or equal) at multiple locations within a short drive. These could be anything small like a bag of Doritos and a case of Pepsi, to big ticket items like HDTV's or even automobiles!

This blog has discussed in the past the Point of Sale fact of life for consumer products. Anything that has a substitute is in danger of a lower price competitor getting the sale no matter how much is spent on Advertising based on the current price in the store. Often this is out of a Brand's control. I have used the Coke vs Pepsi battle as example number 1. The Supermarket not the Brand puts one on sale with the club card as a loss leader (or break even leader) so you buy what is on sale vs maybe your preference. Kiss all those Ad Dollars Goodbye!

Your Supermarket could care less as long as you buy your Cola from them. But to Coke and Pepsi its a revenue issue. I myself prefer Diet Pepsi but buy what is on sale at point of purchase.

In the future (not too far off) a consumer will be able to show up ready to buy and at the point of sale not only decide based on pricing at that store, but also compare with every other retailer within a few mile radius. I can show up at Best Buy and run the Sony 56" HDTV throw my Smart Phone and show that the store down the street has it for $250 less and I demand they match the price or I walk.
I am in Best Buy, this proves my preference to buy from them, will they let me walk?

Or I can compare a Sony and a Panasonic 56" HDTV and I can contact Sony and say I am buying the Panasonic if you don't match their price via Best Buy somehow.

This isn't a browsing dilemma. This isn't a 'let's sow the seeds so we get the sale in 3 months'. This is a 'the person is ready to buy immediately' and if you miss the sale you must wait for the next purchasing opportunity to make the sale. For Coke and Pepsi they might have to wait a few days to a week or two. For a big ticket item it could be years before the next chance. Just think Sony and Best Buy has a chance to sell a 56" HDTV right now with the next chance in 4 years! What do they do? Especially if the consumer notifies them that they prefer to buy Sony! You give a competitor a chance to not only get this sale, but all the free marketing when friends ask how you like your new TV and you say "I preferred the Sony but the price was better on the Panasonic and you know what, its a great TV. I would recommend it to others."

This could be a huge problem for Retailers and Brands. They are not allowed to collude on prices. If a retailer has to contact a brand every time this issue arises to work something out that adds costs to the picture. And worse all the Ad Spend up in smoke. Sony or Pepsi can spend millions getting a consumer to the point of purchase only to lose the sale because the Retailer or the Brand themselves refuse to match the price.

My beef with so called loyalty programs

Advertising is like Politics. People tend to stretch terms and lingo to reflect their needs vs reality. And the term 'loyalty program'. It has been thrown around loosely recently specifically for Mobile Marketing and this needs to be clarified and the abuses of the terminology ended once and for all!

Signing up for future offers/contact is not a loyalty program. It is just an agreement to be pitched in the future by a company for their products and services in hopes you will be swayed to buy something down the road. It does not require a purchase of any sort, only that you sign up (opt-in) for these offers. When a business runs a Mobile Campaign to collect phone numbers for their database so they can contact your phone later is not a loyalty program. That just qualifies you to view special offers on your phone. Same as if you sign up for email or direct mail marketing pitches. And these programs are way down on the priority list for people. They might read them but the conversion rate will be lower than true loyalty programs.

Loyalty programs require purchases. They reward you for patronizing a firm with your business, whether personal or professional.

Examples of loyalty programs are supermarket rewards cards, office supply rewards, or as simple as getting a card stamped and after buying 8 coffees you get one on the house. Loyalty programs can be long term or short term. Short term examples are the McDonald's Monopoly Game. The more you buy the higher the chance of winning a prize or free give away. Same with Airline Frequent Flier Miles.

The big reason loyalty programs are so impactful is because you get something back for your patronage beyond the 'deal'. We might be interested to hear from all sort of brands what their current special or promotion is, but if all is even a person chooses the greater reward (kickback). When I search for Airline Flight Pricing I will steer my business to the Airline I have the most frequent flier miles with before choosing a different brand. The simple reason is consolidation brings a faster reward, in this case a free flight.

The transfer reallocation moving about reaily of mobile retail applications

I read today that Pizza Hut has booked $1 million in sales in 3 months via it's I Phone App.

See Article

But some perspective needs to be shed on this. First of all Pizza Hut is a $6 billion company. So the amount is very small. But that being said the key to success for Mobile is getting people to Adopt using mobile devices in ways that benefit your firm. So today Pizza Hut has a clear cut advantage over other pizza delivery companies because I Phone users can easily order from them on the way home from work, or while in transit to watch football at a friends house. That will change over time and eventually there will be applications that collate all delivery places including private one off local pizza places into one App so you can compare all prices and specials and make your decision. But until then Pizza Hut has an edge.

Now for the reality. Pizza Hut can not tell how much of the $1 million was added sales vs sales they would get anyway via traditional phone call or the internet. Obviously Mobile and Online reduce over head because a person does not have to answer the phone. But the fact is I will guarantee more than half the sales were sales they would of gained anyway. So the impact as of now is minimal for ROI, but huge in terms of being a trend setter and conditioning customers to order via their phone. This benefits not only Pizza Hut but the entire Mobile Ecosystem.

It is very important that firms and agencies relay proper measurements. Often in the news 'success' is touted without any data to back it up. They conveniently omit the number of people, or the true bottom line impact of their activities. While this is great PR investors should be wary of buying stock in companies that do great PR without the substance to back it up. In this case the jury is out, but we will give Pizza Hut some kudos on their efforts and progress!

Marketers Salivating At Smartphone Potential..but is the Public?

USA Today Article

My views on this have been pretty blunt. People do not want ads pushed to their phone. Obviously AdMob feels you do. But this person said it perfectly in the comments section of the article:

Oversanitized (1 friends, send message) wrote: 54m ago

Sounds like advertisers can now literally be in your pocket wherever you go. Society acts like that's a good thing. I hate pop-ups on my computer, commercials on TV & radio. Why would I want them in the palm of my hand? I take pride in NOT being a commercial zombie.

Not all marketers and brands feel being pushy is a good for business. But for Ad Server Networks it is their lifeblood. And they will do everything they can to convince clients this is a good thing. Opt-In advertising is the way to go. If people have their small phone screens cluttered with served Ads they will leave mobile web.

Exactly my point on Privacy Issues regarding Social Media

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• How do you feel about the loss of privacy that comes from sharing information commercially?
  

  I am selective about what information I give out and to whom.	56.28%
  On principle, I don't give out personal information for commercial use.	40.62%
  My life is an open book. I'm not at all reluctant to share information.	3.10%

• Wary consumers: Of the 1,462 readers who voted, 97% are still guarded about the information they'll share commercially. If private information is as readily available as we're told, perhaps their strategy is to stay off the radar and avoid becoming a target. But with so much of the focus on issues like identity theft, we've already rewritten our definitions of privacy. --Eva Schmatz, president, Summus Limited

The above study by Summus Limited proves my point. Consumers do not realize that when they enter an SMS Campaign (especially a loyalty program for recurring contact) that they are giving away their phone numbers. And when Brands and Agencies promote behavioral targeting of people by listening to conversations on Social Networks and then serving them 'relevant' push advertising, this is going to upset a lot of people. The last thing I want is people revolted by Social Networks or Mobile Marketing because of privacy concerns.

The Twitter Test should Brands truly be using Twitter to advertise

Anyone who reads my posts here or in the Advertising Trade Journals knows I am not an advocate of Twitter as an Advertising Medium. Ad Age gives 5 new people in the Industry to follow each week. So I decided to prove my thesis about the clutter and use of this medium. I am currently following 15 tweeters, some are industry people and some are news sources like Rolling Stone, Vogue, Silicon Insider etc and one is a friend of mine.

Just from these 15 tweeters I have been seeing over 100 tweets per day. I am going to add a few a day that are brands and see how this volume magnifies. Because while I browse through the list of tweets most I don't have time to read because I have my own personal email, Facebook, and my work email to deal with! Never mind private SMS texts I get from friends.

I will update this are progress is made.

But my three basic premises here are:

1] there is a critical size of tweeters that once your following that many there is no way you can see each tweet, which means brands must increase the number of tweets hoping to get through compounding this problem.

2] The re-tweeting measurement is interesting. It is possible that many people all connected and following each other could wind up re-tweeting the same exact tweet/webpage/article within the group driving up this measurement yet not actually expanding who is seeing the message! So there is major flaws in this measurement number 1, and number 2 there is no proof a tweet is seen so tweet broadcasts are measurable but tweet views/reads are not (not sure if twitter can measure a click through to an article I am investigating). So the volume of tweets is not a true measurement of volume of people seeing something or of news getting around. But trust me whomever has the position of 'Social Media Administrator' is not going to be honest about this to their boss because they need to justify their paycheck!

Also I am curious when the Tweetbots will be developed. Studies have shown that 17% of all Click Throughs for Web Advertising are not people but Webbots created to rack up money for whomever gets paid for the clicks. And since another study has shown that 85% of click throughs are done by less than 20% of clickers (meaning less than 1 of 5 people are heavy clickers and the other 80% barely click at all) compound with the Webbots we have a Web Advertising measurement problem.....but I will address this in another post.

3] So I am not a complete twitter basher the idea of a portable broadcast like the front page of Facebook (which is EXACTLY the same btw except without the 140 character minimum) is handy to me if I followed ONLY my friends/family. Though I can see problems tweeting 'I am at a bar come meet me' and forget people you wish not to know this are following you (and you have no control who follows you!)

I am a proponent of having Twitter and Social Networks monitored as a way to increase customer service, hearing what your customers are saying, and then responding to them. The real struggle is even if you have direct emails response is still a challenge to get through all the email clutter. I feel the best way for Brands to connect is in ways that a consumer is actually waiting and looking for a response. If you can work out how to do this successfully, a brand had better not keep the people waiting!

Mobile Strategy vs Mobile Marketing Strategy

Domino's Mobile Success from Mobilemarketer.com

Too many people/news stories confuse the two concepts. This is a great article which I commented about on the bottom. It has two components for Domino's. The first is a wonderful success story for Mobile Strategy, the second is their Mobile Marketing Strategy which I personally find the incorrect way to handle mobile marketing.

Mobile Strategy should be using mobile technology to enhance your business, whether that be providing information to helping create a sale from anywhere. Once a consumer knows for instance that they can order a Domino's or Pizza Hut pizza with a few clicks on their Smart Phone this can help migrate people from calling up for a pizza. This reduces costs, and increases profits, and hopefully the ease of use helps create loyalty. Though taste and price points also are an issue. For most New Yorker's even an ease of ordering and low price are not enough to order from a chain Pizza Company since the taste is so sub par vs a real NY Pizza. The way Domino's created their mobile web site and ordering system in my view is a major Mobile Strategy Success Story.

Now let's take mobile marketing. How does Domino's use mobile to market their products to initiate a sale? Now that is a big challenge. Domino's feels bugging people at 4:30pm after the consumer 'opt's in' to be communicated with, or a banner ad on the 10 most viewed mobile sites is the way to go. Pizza Hut feels an 'opt in' program to win a free pizza each month is another way to go.

The challenge here is the small viewing space allows limited information to be presented for banner ads. And if you cannibalize even 10% of that viewing space you risk pissing off consumers even if they like your brand. And this is push advertising that the consumer did not ask for. It is my view that someone's mobile device is like their bedroom. Push is bad in the bedroom!
Of course once someone tries out the Domino's or Pizza Hut site and bookmarks it there is not need to informational contact with the consumer stating you can order via mobile web.

As for the loyalty programs where someone sends an SMS Text to be signed up for future communication, just like tweets this will cause clutter in people's inboxes once they sign up for many of these programs just like what has happened with email. You get drowned out in the volume of businesses trying to reach someone. And after the initial sign up this is Push Advertising not Opt In. And another key point which people do not realize, when they send the SMS Text they send their phone number. This can be dangerous if the number get's sold to other parties. So until there is a way to send your Opt In without showing your phone number this is an issue. Ask anyone if they want to give their number to Domino's or Pepsi my guess is most would say no.

So how do you get people to try your product or service by using mobile marketing properly in a classy non-intrusive manner? It is called bribery. And it is going to cost you something. But that should be ok since if you get a consumer to send an SMS Text or go directly to your mobile web site this is 100% measurable. This isn't guess work like TV, Print, Billboards etc. This is the real deal. They actually took initiative to engage with you. Willingly. Permissively. There is very few advertising/media methods that can claim this. So offer a coupon, something free, or something ridiculously cool (like a mobile web content treat). It will earn you much more loyalty and improve your relationship with the consumer than any other form of marketing. And use your existing media plan to achieve this. No need to use Mobile to reach out. You are already advertising Out of Home, TV/Cable, Print etc. Ask the consumer to use their phone to get the reward. This will allow a much more real anytime, anywhere engagement than anything else in your arsenal.