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Monday, October 31 2011

Connecting With Consumers on Smartphones

A nice summary of recent research by Ofcom (an independent regulator and competition authority for the UK communications industries) by UK blogger Colette Burke detailing the growing infatuation of the British for the smartphone, so I republish it verbatim below.  Burke's conclusion is right on regarding the need for companies to respond sooner rather than later by making their websites more mobile-friendly.  And it won't be long before we start hearing how 'mobile' not only refers to smartphones but also tablet PCs.  In fact you just did.  More of my comments following Burke's column.

Friday, 28 October 2011 

Colette Burke - Land Strategies Farming Blog

"A nation addicted to smartphones" is how Ofcom summarises its findings from a recent piece of research, saying that 27% of all adults and almost half of teenagers now own a smartphone (a mobile which connects to the internet). Smartphone owning numbers have exploded in the past year, and are set to rise further as annual sales of smartphones are now higher than those for the standard version.

More internet users connect to the web via their mobile than a laptop (45% versus 38%), and the number is even higher among 16-24 yearold where 71% access the internet via phone.

Smartphone usage is definitely here to stay and businesses are thinking through how they tap into the trend, whether it be for advertising their products, providing information, or directly selling goods online.

At the very least, websites must be simple enough to be quickly accessed. Consumers will rapidly lose patience if they have to wait for information to be downloaded. This means either having a site tailored to mobile usage, which automatically comes up when searched via phone, or having a link redirecting users from the main site to a mobile friendly one. Amazon and Tesco are good examples of a speedy tailored link. Asda’s site take an age to download.

The other option is to provide an app, or application, which sits permanently on the phone for easy access to a specific activity.

Although most usage is still for socialising, downloading music,  gaming, and searching for information,  the IGD reckons that smartphones are starting to change the way groceries are bought online. According to their research, 1 in 10 online shoppers are using smartphones to shop. Ocado claims that 15% of customer checkouts during the first half of the year came via their smartphone app. Tesco has a handy app which allows shoppers to scan the barcode of a product on their phone whereupon it is automatically added to their online shopping basket.

As to future developments, the IGD predicts that tailored apps which build a relationship with individual consumers are the way to go.

The time has probably come to view selling and marketing via the mobile phone as a crucial part of any business plan.  The research finds that 81% of smartphone users never switch them off, even when they go to bed, and that huge numbers are happy to use the phone whilst socialising, at the meal table, and even in the bathroom.

Smartphone usage is now a part of life. Those businesses without a smartphone presence may find themselves competitively disadvantaged. 


It's nice to see a perspective, boosted by fresh data, coming from outside the US for once.  Ofcam's research revealed some additional findings that didn't make it into Burke's installment, especially in terms of socializing.

In the bathroom and at the dinner table

The rapid growth in the use of smartphones – which offer internet access, email and a variety of internet-based applications – is changing the way many of us, particularly teenagers, act in social situations.

The vast majority of smartphone users (81 per cent) have their mobile switched on all of the time, even when they are in bed, with four in ten adults (38 per cent) and teens (40 per cent) admitting using their smartphone after it woke them.

Over half (51 per cent) of adults and two thirds (65 per cent) of teenagers say they have used their smartphone while socialising with others, nearly a quarter (23 per cent) of adults and a third (34 per cent) of teenagers have used them during mealtimes and over a fifth (22 per cent) of adult and nearly half (47 per cent) of teenage smartphone users admitted using or answering their handset in the bathroom or toilet.

Teenagers are also more likely to use their smartphone in places they’ve been asked to switch their phone off such as the cinema or library – with 27 per cent admitting doing so, compared with 18 per cent of adults.

So much for the UK.  What about elsewhere?  A global survey carried out last February and March by IDG Global Solutions involving nearly 13,700 participants from 16 countries essentially demonstrated that the UK results are pretty typical.  Although IGS identified differences in terms of preferred smartphone brands and usage by region, it was clear that the popularity of mobile devices is rapidly growing worldwide, and that the traditional cellphone is on its way out, to the product scrapheap that is littered by VCRs, fax machines, and desktop computers.

More than 2/3s of the respondents worldwide claimed to use a smartphone for personal (73%) or business (69%) purposes. Nokia and Apple lead the way in Europe, while Apple, Blackberry, and Samsung the preferred choices in the US.  Moreover, 70% of smartphone users say they browse the Internet regularly and use mobile applications, with general and IT news sites most popular, followed by social networking access.  

As if you don't have enough stats for one day, here are some more 'in a nutshell' global mobile stats from mobilThinking:

Consumer mobile behavior

1) What do consumers use their mobiles for?  Japanese consumers are still more advanced in mobile behavior, using mobile Web, apps and email more, but US or Europeans text and play more games. Most popular mobile destinations are news and information, weather reports, social networking, search and maps.

• In all countries surveyed more consumers used their browser than apps and only a minority will use Web or apps exclusively.

2) US consumers prefer mobile browsers for banking, travel, shopping, local info, news, video, sports and blogs and prefer apps for games, social media, maps and music.

3) Mobile searches have quadrupled in the last year, for many items one in seven searches are now mobile.

• Did you know 71 percent of smartphone users that see TV, press or online ad, do a mobile search - will they find your mobile site or your competitors’?

4) SMS is the king of mobile messaging. 8 trillion text messages will be sent in 2011.But consumers are also embracing mobile email, IM and MMS rapidly.
A2P -application to person SMS e.g. automated alerts from banks, offers from retailers, m-tickets is expected to overtake person to person SMS in 2016.

 • Is your opt-in CRM database part of that revolution?

5) Mobile ad spend worldwide is predicted to be US$3.3 billion in 2011 sky rocketing to $20.6 billion in 2015, driven by search ads and local ads.  In the US over half of U.S. mobile ad spending is local – Japan particularly – continues to dominate global mobile ad spend.

 • With US$1 billion in annual mobile ad revenues Google is the main recipient of mobile ad spend.

6) To what types of mobile marketing do people respond best? In the UK and France opt-in SMS gets the best results, in Germany mobile Web ads get  best results.

Tuesday, June 14 2011

Rules of Consumer Engagement

Eagerly anticipating the copious food and endlessly flowing wine at the recent European Marketing Academy (EMAC) conference in Ljubljana, I knew I was in trouble when they first shuttled everyone into an auditorium and presented some local flavor in the form of a Slovenian playing what was proclaimed as a '6,000 year old whistle.'  Miles Davis he was not, but then I imagine there's not much you can do with a 6,000 year old whistle except to marvel that anything 6,000 years old can still carry a tune.  The whistler was followed by a representative of the global management consulting firm, McKinsey&Company, who began with a breakthrough discovery:  "Consumers are more connected than ever before in history."  Really?  I didn't know that.  For the next 20 minutes, the audience was presented with an oratory about what a great company McKinsey is, which I am sure is very, very true.  But as stomachs started growling, I think quite a few attendees had come to the conclusion that if we weren't yet going to be fed, then it would be better to get that 6,000 year old whistle back on the stage.  Anything but more McKinsey self-plaudits.  Better to get off the stage and get back to issuing pithy and terse reports, like its May 2011 Consumer and Shopper Insights paper on consumer engagement, penned by David Edelman, Patricia Ellen, and Christoph Erbenich, available at this link.  

To make a long story short, McKinsey developed a "Consumer Decision Journey" (CDJ) model in 2009, which incorporates four steps that organizations can follow to engage consumers at each step of the consumer journey from the initial purchasing consideration to the creation of brand loyals: Align, Link, Lock, and Loop.

ALIGN:  Invest marketing resources where consumers spend their time.  This likely will involve shifting resources from the 'consider' and 'buy' stages of the CDJ to the 'evaluate' and 'advocate' stages.  For many companies, investments will have to shift from paid media (channels owned by other companies, like print or online newspapers) to self-owned media (like the brand's Web sites) and earned media (such as customer-created channels like brand communities).

LINK:  Messages must reinforce each other, a daunting task in light of the proliferation of channels.  This doesn't only pertain to promotions, but also to product model numbers and descriptions, images, etc.  Edelman et al.  point to Apple's effort to eliminate jargon and maintain consistency in its product descriptions, creating a rich library of explanatory videos, etc.  Consistency, accuracy, and accuracy across touchpoints is critical.

LOCK:  Keep customers attention.  This requires the development of direct, opt-in channels, including email promotions, Twitter and Facebook feeds, and apps.  For example, McDonald's targeted millions of Japan's mobile-savvy consumers to sign up for mobile alerts with discount coupons, opportunities to participate in contests, special-event invitations, and other brand-specific content.  Keep it coming, keep it fresh, and offer consumers something they value, and I bet you don't lose their attention.

LOOP: Focus on consumer and expert created content for insights into customers and the brand, and use data collected about customers to create content that will engage them.  As I emphasize in my book Connecting With Consumers, it is critical to listen to consumers, but if you don't then apply those insights to better connect with customers, what's the point?  Edelman et al. give kudos to Amazon in this regard - the company invites customers to rate products and then makes the ratings available to shoppers.  But Amazon goes further - it also uses the data to decide how it presents its products.  This is what is meant by an information-rich loop, which goes from data to content and back to data, all contributing to product development, customer support, and personalized communications.

Saturday, March 5 2011

Connecting With Teens

I remember our first TV - a monstrous Zenith black and white box with an essential horizontal hold button, rabbit ears antenna, and three channels.  No HDML ports, no USB or ScanDisk inputs, no remote control, and I don't even think the word 'computer' had been invented yet.  If you're a teen today, that mini-techno-biography must send shivers up your spine.  Because you've grown up with laptops, the Internet, smart phones, and remotes up the wazoo.  You are the avant-garde of new technology.

A recent eMarketer report estimates that by the end of this year, 96% of US teens between the ages of 12 and 17 will go online monthly, compared with 74% of the total US population.

Regarding social networks: more than 4 in 5 teens are expected to use social media this year (vs. 64% of all Internet users) and 75% will use Facebook monthly. 

And texting is so second nature to a teen that it has just about relegated most email accounts to the trash bin.

The online social connectedness of teens for retailers is pretty phenomenal according to a new report, 'Teen Girls: Always on a Social Shopping Mission.'  According to eMarketer analyst Tobi Elkin, who authored the report, "Peer influence is the key driver in teen girl shopping behavior."  Although more than 4 million US teen girls purchased items online last year, shopping in the bricks & mortar context is still a major element of teen consumer behavior, as Elkin writes in her report:

"Teen girls are intrepid social shoppers who eagerly embrace digital and mobile tools. They enjoy hunting for clothes and accessories online and offline. Most thrilling, however, is the experience of shopping and buying in physical stores with close friends by their side."

"While they are price-conscious and driven by a great deal, teen girls weigh these factors against the all-important consideration of whether peers will approve of their purchases."

Still waiting to see how all this compares to teens outside the US.  And whither the teen boys?
Just have a look:

Wednesday, December 8 2010

Connecting With Millennials

There's been much written of late about the so-called--implicitly or explicitly--'blank generation', otherwise known as 'Millennials', including a feature New York Times Magazine story (18 August) penned by Robin Marantz Henig ('What Is It About 20 Somethings?"), so I'm not going to belabor the point here.  The recent Pew Research Center report on Millennials was particularly noteworthy, concluding that the generation defined by the turn of the calendar - that is, those born after 1980 and the first generation to come of age in the new century - are 'confident, connected, and open to change.'  When those Pew millennials who claimed that their generation was unique were asked to explain in what sense, nearly a quarter said 'technology.' 

So far, so good.  Yet we are also hearing more and more the 'vacant' label in association with discussions about a brand new life cycle stage, 'Emerging Adulthood' - the developmental period between adolescence and adulthood.  Not yet considered by marketers, this is the stage of in-between, what with financial independence delayed, schooling prolonged, progressively increasing delay in moving away from home, and the responsibilities of raising a family lingering beyond the far-off clouds.  Emerging adulthood does not appear to be a uniquely American phenomenon - it's happening here in France (where 60% of male and 49% female 20-24 year olds still live with their parents, about a 10% increase compared to 1982), India, and elsewhere.  And then there was that button-pushing report issued by the market research firm Civic Science (who?!) claiming that their research shows that millennials don't run hot or cold about anything - the 'tepid generation'?  According to a Civic Science spokesperson,
"When we looked at our first month's worth of data, we found almost NO
contrast among brands.  Not only do the Ms not dislike anything.  They see to
think that ''Love" is too strong of a feeling for a brand.  Our 5-point scale quickly
turned into a 3- or even 2-point scale.  It seems that "Neutral" is about the most
damning way these Ms can feel about anything."

Regardless of the validity of this claim - and my millennial students assure me they hate this kind of market study, there is no question that millennials love technology.  Maybe they just don't know it because they're so used to it.  For an old fogey like me who once upon a time owned a manual typewriter and had to keypunch cards to get my doctoral research data analyzed in the dark caverns of a converted church on Temple University's urban campus in Philadelphia, every new piece of technology that makes my life easier and more enjoyable is embraced as avidly as a passionate new love affair.  But as Pat McCarthy adroitly pointed out at the WOMMA blog yesterday, today's not-quite milliennial teens are, ho-hum, used to technology and its changes because, for them, it’s always been there.  That's a pretty meaningful statement, and an important one for marketers to note.  According to McCarthy:

If marketers want their brand to captivate teens, they need to think about technology from a teens perspective. David Trahan of WOMMA Member company Mr Youth recently outlined this perspective. For teens today:

1. Devices Have Always Been Portable
2. Mobile Phones Have Always Existed
3. Technology Is Always Evolving
4. Brands Have Always Been Online

I'm also reminded of a Keller Faye analysis showing that whereas most WOM takes place offline, when you break down the analysis according to age, the younger the age group, the greater the proportion of online WOM.  Younger people (13-17 year olds) communicate 19% of their comments about brands, companies, etc. via email, IM/text, and chat/blog, and that percentage steadily decreases across subsequent age groups, resulting in a mere 3% for 60-69 year olds, yes, the ones who predated those punch cards.  In short, if you want to reach and connect with young people these days, technology is the answer.
Slide 63

Tuesday, November 23 2010

Know Your Target

Back in 1959, the great sociologist Erving Goffman published The Presentation of the Self in Everyday Life, thereby singlehandedly catapulting the self-concept into the hearts and minds of nearly every behavioral scientist trying to fathom the predictably unpredictability of human behavior.  The lesson for marketers is clear - if you want to understand and connect with your targets, it helps to have some insight into how they view themselves.  In this vein, I couldn't resist publishing this more than self-explanatory graphic depicting how smartphone users see themselves and each other.  It's already made the rounds, both at Musings of an Entrepreneur and Emmanuel Vivier's Lifestream.

Friday, September 10 2010

If You Can Touch It, You'll Pay More For It

Okay, here's a question for you: You're at a fine restaurant.  It's getting late, and after a terrific appetizer and main plate, you're feeling kind of filled.  There's maybe a half glass worth of wine left in the bottle and your companion obligingly informs you that it's your's for the taking. So now the big decision - to dessert or not to dessert.  Oh yeah, I almost forgot the question.  Does it matter whether they simply list the name of the dessert on the menu, show a picture of the dessert, or bring the dessert cart around?  I mean, if you want dessert, and you trust the restaurant, you're going to throw caution to the wind, order the dessert, and be on your merry way.  Should it really matter how you are informed about the dessert selection?  This scenario kind of reminds me of when I was living in Philadelphia, PA many years ago and had to cope with buying alcohol in the State Stores.  Other than a few bottles on display, your choice of wine, beer, or spirits came down to that long list of barely readable options in a flyer placed on the counter separating the goods from the clientele.  Out of sight, out of mind.  In essence, these situations allude to a more general question, which is 'Does the form in which an item is presented to consumers matter, and if so, does it have an impact on the amount of money people are willing to pay for it? The relevance of these questions has never been more apparent, as companies that have relied so heavily on brick & mortar retail selling continue to shift their strategies to the digital marketplace.  As Barnes & Noble bookstores gradually fade from our collective memories, what are the implications for consumer behavior and sales? 

Slide 106

An article published in the September issue of the journal American Economic Review ("Pavlovian Processes in Consumer Choice:
The Physical Presence of a Good Increases Willingness-to-pay") provides some valuable insight into these questions. Led by professor of neuroscience and economics Antonio Rangel, a team of researchers at Caltech recognized that form of presentation may not matter - that is, some models of consumer decision making posit that choices among offerings should not vary with their descriptions or by the procedure by which the choice is made.  The researchers had different ideas, however, and the results of their experiments clearly show that the form in which objects are presented matters a great deal, and has a significant impact in monetary terms.  Their experiments were straightforward: in the first study, they presented food to hungry research subjects in one of three forms--a text-only format, a high-resolution photo, or a tray placed in front of the participants--and then asked how much people were willing to pay for the food.  It turns out that subjects placed on average a 50% higher value on the food on the tray in front of them, whereas there was no difference in bids placed on the food presented in the other two formats.  According to one member of the research team, grad student Benjamin Bushong, this was pretty counter-intuitive:

"We were quite surprised to find that the text display and the image display led to similar bids.  Initially, we thought people would bid more in the face of more information or seemingly emotional content.  This finding could explain why we don't see more pictorial menus in restaurants--they simply aren't worth the cost!"

Well, Bushong should take a stroll through the Latin Quarter here in Paris, where one Greek souvlaki restaurant after another Turkish gyro establishment present full-color pictorials of their horrendous offerings in window and sidewalk displays.  And when I see them, one phrase pops into my mind, as if by rote: 'cheap dump.'  So obviously there were a number of variables not factored into the Caltech studies.  But some were.  For example, by now you may have thought, 'well, having that dessert tray in front of me that you were talking about earlier, my guess is that the smell of the items would serve as a stimulant, increasing the desirability of the items and tempting me to go for it, regardless of price.'  And I would agree that is a pretty astute observation. However, the Caltech researchers also thought of this and so repeated their food experiment with different 'goods' (a variety of trinkets from the Caltech bookstore), with identical results. Subjects were indeed willing to pay 50% more for items they could reach out and touch.  In a third experiment, the researchers separated the items for bid from subjects by erecting a plexiglass barrier, thereby eliminating the possibility of physical contact with the items.  In this case, the value given to the physically present items dropped to the same level as the text- and picture-based items.    Rangel explains what appears to be going on here: 
"Behavioral neuroscience suggests that when I put something appetizing in front of you, your brain activates motor programs that lead you to your making contact with that item and consuming it."  But take away the possibility of physical contact, the effect is lost.  Kind of explains how I felt about the prom queen back in high school. 

If we think about the implications of the Caltech findings for the future of brick & mortar stores, well, maybe it's a bit too soon for the likes of Barnes and Noble to be packing up shop.  Although we shouldn't underestimate the power of technology.  Already, some e-tailers are experimenting with ways to make the online shopping experience more similar to the offline experience.  For example, as early as 2007, Brookstone experimented with an online 3-D virtual store.  Go ahead, pick up and browse that online book you're thinking of buying.  Factor in the unconscious transference of human processes that I discussed in my previous installment and whatever innovations await us in the near future (product holograms emanating from our portable device screens?), before you know it, we'll be shelling out more money than we had intended to get whatever it is that struck our fancy.

Finally, if you need any further evidence of the importance of touch for consumers, check out this Sept. 1st New York Times article about how consumers naturally take to touchable gadgets, like the new Sony Reader Touch edition.  The shift from the pen to the typewriter back in the late 1800s was dramatic - people were asked to put words on paper in a way that was previously inconceivable.  But the shift from the PC to portable touch screen devices is a piece of cake, you know, that cake on the tray in front of you.