Location-Based Marketing 2--Check-In Programs

Black Friday and Cyber Monday have both come and gone. Black Friday filled the stores—from midnight on!*!—with shoppers who often used Black Friday websites to locate deals before they braved the stores. Cyber Monday online sales were over $1 billion—the most ever for a single shopping day!

I want to focus in on just the check-in programs as a new and powerful shopper stimulant. There are the “old-fashioned” apps that let you compare prices in the retail store. Apps like TGI Black Friday (DealCatcher the other 364 days of the year!) aggregate coupons and deals from all over. Shoppers find them valuable, but the real action is in check-in campaigns run by individual retailers. Analytics by Mashable show Target far in the lead in terms of number of check-ins. I got there too late to check out the Black Friday tab, but the Weekly Ad page shows the variety of channels for accessing weekly specials and the opportunities for check-in promotions that include contests, give-aways and special deals.

One of the big winners this holiday season has been Sports Authority, mentioned in my earlier post as having a $500 gift card give-away on Black Friday. As this quote suggests, the company considered it a great success—and it didn’t even make the Mashable list of the top 10!

"We saw a lift anywhere from 5X to 20X for the number of check-ins," said Clay Cowan, VP of e-commerce for the Denver-based retail chain. "Every metric of engagement that we tracked went through the roof. Whether it was Twitter posting, Foursquare check-ins, Facebook friend adds and comments...we saw increases."
On Foursquare, the brand had around 400 followers before the campaign and now has almost 4,500. . .”

Three important points. First, Sports Authority has been testing Foursquare promotions since early this year. They had a process in place. Second, they’re not resting on their laurels. They now have a 21 Days of Deals promotion in place. The box from their home page shows strong integration with Facebook. It’s easy to guess that they may have other Foursquare promotions that will be promoted on their Facebook page. That’s the third issue; marketers need to use something timely like Facebook or Twitter (or both) to publicize these short-term deals beyond their mobile app subscribers. This material is too transient for web site promotion unless you’re running a big campaign announced far in advance.

That’s one strategic was of looking at location-based promotions—the specific campaign. There is another—the integration with long-term loyalty programs. According to Fast Company Safeway is testing a partnership program with Pepsi in its California Vons stores. It’s built on the existing loyalty card, the important difference from most of the campaign-type programs we are seeing. When the shopper checks in with her Vons card, she can receive instant rewards (coupons at check-out) on PepsiCo products. It’s possible to set the program up so swiping the card checks the shopper in and rewards are “shouted out” on Foursquare. It’s a bit hard to find the Foursquare page on the Vons site, suggesting local promotion of this test program.

Does this predict that the future of the loyalty card is on our cell phones as suggested by the New York Times? It’s worth considering!

Before you get too excited, though, keep the recent Pew research in mind. A report published in early November says that only 4% of Americans use location-based services at this point. Ok, the target audience is relatively small at this point. The good news is that this market is in its early days and thoughtful marketers have time to test and refine strategies. This space is exploding, though; I’d recommend starting right away.

And as you do it consider an even more far-reaching possibility: The future of convergence may be the cell phone. That will stand conventional marketing on its head once again!

What Do Consumers Want from Mobile?

A few weeks ago I made a post on a mobile service that caught the attention of Sachendra Yadav, a product manager in the Indian telecommunications industry. He posted a reply on his very interesting technology blog, “What I Want from My Mobile Social Network.” If you missed his comment and the link, it’s a formidable list that is well worth considering.

We all know that the US is well behind on the mobile curve and can look to mobile services in other countries for insight. Two recent studies are helpful.

Accenture uses Forrester data to point out that “there is currently a huge gap between what users would like to do on the mobile Internet and what they actually can do” (page 4; download the full study here). Sachendra is apparently not alone! Most respondents in the Forrester survey don’t find the mobile Internet very useful or easy to use.

Another 2008 study, this from the IBM Institute for Business Value, concentrates on strategy for MDMs (mobile device makers; download the full study here). In the process it gives some interesting data from a survey of about 700 consumers in the US, Japan, India, China and Germany. They didn’t include South Korea, another advanced mobile economy which should be watched. These consumers want many services from maps to games. The chart divides the services up between Utilities and Entertainment—interesting. Note that browsing the Internet sits squarely on IBM’s dividing line between the two. Note also that if you combine “very interested” and “somewhat interested” a majority of their respondents are interested in the services from maps, most desired, to mobile TV, desired by just over half the respondents. That represents a large opportunity for providers of both services and content.

It provides a widespread opportunity because these respondents are more interested in services than brand. They prefer a mobile device that “Lets me choose andconfigure which mobile Internet services I want to use” and continue to “be able to install additional applications and services as desired” (page 9). Lack of brand loyalty is also displayed. When asked about brand preference for the same set of services, a substantial majority chose “Would take up ANY brand as long as I find service valuable” for all the services listed in the second chart (page 11). However, these respondents also find the mobile Internet expensive, slow and generally inconvenient.

How to improve? Accenture recommends:

1.Innovate from the customer’s perspective
2.Own the customer experience
3.Serve the social needs of customers
4.Develop the ability to cater to individual needs
5.Look for value in aggregation

Both these studies stress the need for personalization and usability in the mobile experience. They also suggest that the mobile Internet has a long way to go before it provides these desirable features and becomes a staple in the lives of most of us. That’s even more true of the US, which is already behind but can use the experience of others to quickly move up the learning curve.

The importance of the customer perspective and customer experience also indicates that marketers need to take an active interest in mobile applications. A number of target audiences are already aware of what should be possible and eager to have those services. Others will join their ranks. It’s the job of marketers, whether they are services providers or users of mobile applications, to keep developments customer-focused, not technology-focused.

"It's 10 p.m. Do You Know Where Your Friends Are?"

Caroline McCarthy has a post on C/Net today that highlights a trendy beta, Brightkite. We all know how popular social networks are. A recent eMarketer newsletter (May 1, 2008) shows a high and growing level of use among all age groups. Not surprisingly, teen use is high, but so are “adults.” I’m willing to bet that the word “young” would account for a great deal of the social network usage in the “adult” category.

There have been a number of attempts to take social networking mobile. Some have already foundered over cost issues, privacy concerns and simple lack of usage. Brightkite seems to be the latest hot entry in the field. My students have been talking about a service like this for several years. Having an up-to-the-minute view of where their friends are and what they are doing has appeal. It has more on Friday or Saturday night than on a weekday afternoon, probably, but it is an option desired by connected young adults and teens.

Usage of mobile social networks is still in its infancy (eMarketer, February 27, 2008). The same newsletter quotes a UK study that finds 25% of mobile phone users citing social networking as their most desired content, close behind email at 33%. The potential for growth is highlighted in that same newsletter. A Pew study found that the mobile phone was the main daily communications method for teens who used the Internet, had mobile phones and used social networks. The potential is there; the execution has been a problem.

Brightkite describes itself as a location-based social network. Users can take their online profiles, including their network connections, with them onto this service. They can see where their friends are, join them at a given location, keep track of the locations they’ve visited, send SMS messages, and more. This is a shot of their app for the iPhone, although they are careful to point out that their service is available regardless of carrier.
It still requires an invitation to get into this beta. For most of the time I was working on this post the site was down (did Caroline’s post crash the site?), but it’s clear that they have more invitations than they can accommodate for now. Not that I was planning to sign up anyway; it’s not for my demographic. But blogger Josh Lowenshon obviously has; you can see the service from a user perspective on this post.

It’s the principle more than the specific service. The space is still full of churn. What doesn’t change though, is the desire of teens and young adults (who will grow older; wonder what will happen to their media habits then?) to be connected. Also not changing is their rejection of traditional media. I don’t think that any marketer can hide from this trend/ these developments. Large markets are already firmly in the new media camp. Rapid growth is predicted. No age group seems totally immune from the siren song of new media. Question is: how will we engage them around our brands and around issues of interest? We’re just beginning to explore the answers!
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