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Customer Engagement

MOBILE COMMERCE: Path

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Mobile Commerce: The Path to Customer Engagement

Getting Started

Creating a Holistic Mobile Commerce Strategy

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It wasn’t so long ago that consumers hesitated to make a transaction on a Web site with a credit card because they were skeptical about how secure it was. Today that skepticism seems almost antiquated, like using a crank to start a car. What changed? The financial services industry, in conjunction with technology vendors, established safeguards and protections for consumers. While the process isn’t foolproof, consumers are now confident enough of the relationship with their credit card issuers to turn e-commerce into a billion-dollar global industry.

Banking transactions, retail transactions, exchange of funds between buyers and sellers on auction sites — all have become part of our daily lives in a short period of time. Now another shift — perhaps even greater in importance and also relating to trust — is upon us. Where before the trigger was the Web, this time the trigger is the mobile phone. As the Web spawned electronic commerce, mobile phones have spawned mobile commerce. And the potential lies far beyond a simple transaction.

More personal, portable, and in many cases powerful than any computing device in the past, mobile phones deliver new opportunities for enterprises to establish, nurture, and maintain relationships with customers. But unlike most advances in which enterprise use leads consumer use, the mobile phone revolution has developed in the opposite way: customers are already comfortable with the technology and expect enterprises to allow the kind of interactions they want.

At the same time, of course, advances in back-end mobile development tools mean that enterprises can deploy mobile self-service capabilities even with the most basic mobile phone — using SMS. In Bangladesh, Dutch-Bangla Bank Limited communicates with 800,000 new account holders through text-based services, without the need for a sophisticated smartphone. With the right applications, companies can capitalize on these new expectations and adaptations to new mobile phone technology to move consumers from commerce to commitment, from transactions to trust.

As the Web spawned electronic commerce, mobile phones have spawned mobile commerce. And the potential lies far beyond a simple transaction.

2 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

Getting Started

How can enterprises embark on this new path to customer engagement? The vision may be clear, but the execution requires careful consideration. Here are some key areas to think about when looking to implement mobile commerce services for your business.

Develop the business case. What is the benefit to the enterprise? Increased

revenues? Increased customer retention? Reduced marketing costs? Reduced devel-opment costs? Reduced customer service costs? In some instances, providing an app is increasingly seen as a cost of doing busi-ness, but that ignores its future potential. Mobile enables new models of engaging with you customers, due to their always-connected nature, enabling new services and in turn new value to be created.

Do your homework. Start collecting statistics that will help you make your decisions. For instance, find out how

many of your customers are already using mobile technology. Track how many of them are accessing your website or your contact center through their mobile phone. Then think about how you can simplify their needs through self-service or other capabilities.

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3 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

Changing the Parameters of the Mobile RelationshipThe path to customer engagement involves changing the parameters of the mobile relationship, going beyond transaction to interaction. From a purely commercial standpoint, an expanded customer relationship with more self-service capabilities empowers users and reduces costs, as well as supporting cross-selling, up-selling, and retention. But it also goes beyond that, into an uncharted realm — the ability to provide information, to solicit information, to reward behavior, and in general to share insights that will make the relationship richer and more beneficial to both parties.

Many of today’s customer relationships come with built-in barriers. In the consumer packaged goods (CPG) industry, the established distribution system is the barrier. Manufacturers don’t sell to customers; they sell to wholesalers and distributors, who sell to retailers. If a shampoo manufacturer develops a conditioning product, it has no way of knowing which specific consumers to target. This makes it hard to build brand loyalty, gain insight into consumers’ thinking, or even communicate with customers quickly and accurately in the event of a product recall.

The same customer-relationship issue affects consumer white goods, such as appliances, which are purchased far less often. Frequently, too, the only time the consumer contacts the manufacturer is when the device is broken. One potential solution: create a mobile self-service that gives advice on getting the best results from the use of appliance, even going so far as to offer discounts on the consumables or accessories used with the appliance.

Getting Started Continued

4 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

Prepare for mobile. If you are already collecting customer data, start

collecting mobile phone numbers as well. Ask customers to opt-in for marketing messages, even if you haven’t yet launched a mobile service. Collecting this data ahead of time will give the company’s mobile services an instant kick-start when they’re launched.

Enhance what you already do. Mobile opens up a world of possibilities to

offer new services and create direct rela-tionships with customers. In order to make the most of the mobile channel, a company must tie it into what it’s already doing to maintain loyalty and reduce customer churn. For instance, if an enterprise already has a contact center, or does email promo-tions, add mobile as a new channel for these services.

Start small. With mobile, as with any new technology, it’s often wise to start

small and grow incrementally, letting the success of one service pave the way for the next.

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In other industries, the barrier is the lack of a communication channel. The utilities industry, in the middle of an innovative effort to develop smart grids and smart sensors, now has the ability to report usage statistics to their customers. They could do it through a Web site, but that lacks the immediacy of a mobile phone. Other applications include meter readings and the ability to check on property pipeline locations (e.g., “Call before you dig”). In developing economies, where utility payments are still made in person using cash, mobile enables companies to move these payments to an electronic channel, with all the benefits associated with removing cash from the payment process.

In the financial services industry, mobile phones open up channels and customer opportunities that didn’t exist previously. For example, banks once required a branch system to reach customers; now mobile phones are helping them serve remote customers through services such as mobile payments and remittances. (These are customers who might not even have had a bank account before.) Increasingly, banks are imple-menting self-service capabilities to both reduce the cost of serving customers and give them greater access to their accounts.

Forward-thinking retailers now see mobile technology as an opportunity to reward loyal customers, gain deeper insight into their preferences, and deliver self-service tools.

In the retail industry, mobile phones have been viewed as a threat to the traditional brick and mortar store, because customers can now access competitive ecommerce sites from their smartphones. However, forward-thinking retailers now see mobile technology as an opportunity to reward loyal customers, gain deeper insight into their preferences, and deliver self-service tools. Traditionally, a retailer’s only interaction was at the point-of-sale or if the customer spoke to a sales clerk.

Consider the viability of a “shopping list” application that integrates with a store’s inventory system. When a customer enters the store, items are arranged in the application in the order in which they appear in the store. The application could also make suggestions to complement items on the list (such as sauce for pasta, wine for a selected cheese), as well as propose alternatives if an item isn’t in stock — and offer coupons or vouchers for those items.

5 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

Breaking Down BarriersMobile devices break down those traditional barriers. With mobile, a utility company can now notify customers in specific neighborhoods during power outages, updating them on the estimated time of a fix. That saves customers the aggravation of sitting on hold while trying to get through to an overwhelmed call center. Even better, what if the utility developed an app that not only gave users the ability to adjust the heat in their homes but notified them if the heat was on in the middle of the day?

Consider the scenario of a CPG manufacturer seeking to develop a relationship with its end-customers. By placing a coupon code inside its packaging, it could entice customers to text the code by offering a discount. It could also tie the offer to the downloading of an app, one that would request some basic demographics, track purchases, and reward points for activity. By understanding consumers’ behavior and demographics through the app, the CPG manufacturer could both up-sell and cross-sell (mouthwash with toothpaste purchases, toothpaste with toothbrush purchases). Immediately, marketing becomes more cost-effective because there is a more targeted and measurable universe.

But the opportunities go beyond cross-selling and up-selling. One of the biggest challenges of product development is gaining an understanding of what consumers want, even before they know they want it. With the establishment of a communications channel to actual customers, manufacturers have the ability to poll them or solicit insights. The mobile phone has the ability to be the 21st century version of the focus group — with really, really sharp focus.

Getting Started Continued

Analyze competitors. Find out what the competition is doing. Download

their apps to determine functionality. Find out if any of their executives are speaking about their efforts. Check the trade maga-zines for reports of their progress. Think about what phase of their efforts might be applicable to your industry. Then think about how you can improve on what they’ve done in order to differentiate your efforts.

Identify services. As with any new product development effort, this

requires a keen understanding not only of customers’ problems and challenges, but how mobile phones might ease them. In many cases, enterprises can identify the answer themselves by tracking behavior. For instance, a bank might monitor why customers call into its call center. If the number one reason is to get their bank balance, then that’s an easy justification for building a self-service mobile phone app that gives account information. A utility company could offer an app that lets users type their usage from the meter into their mobile phone, saving the utility the cost of a meter reader.

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6 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

But while the mobile phone gives manufacturers a built-in tracking mechanism, it also gives them a follow-up mechanism. They can link offers to redemption. If a customer uses a coupon to buy a new product, the manufacturer can follow up with a poll to see how they liked it. Conversely, if a customer doesn’t use a coupon within a month, the manufacturer can follow up with a poll asking if they’re dissatisfied.

Consider the case of banks seeking to expand into regions previously unbanked or underbanked. Mobile phones — with their ability to link to mobile wallets that can be used as payment mechanisms and refilled with currency electronically — are dramatically opening up the opportunity to attract new customers.

The mobile phone has the ability to be the 21st century version of the focus group — with really, really sharp focus.

At the same time, both banks and telecommunications companies can set up new generations of payment networks in conjunction with mobile operators that allow customers to use their phones for retail transac-tions, to transfer funds to friends and family, and to make payments also using SMS or mNFC (mobile near-field communication). The options are almost unlimited.

The upshot of using mobile phones to enhance the customer relationship and increase engagement is simple: enterprises can develop better insight into consumer behavior and preferences, thereby gaining a better understanding of what other products and services customers would be most likely to want. Even global manufacturers with extensive operations can use mobile phone apps to develop closer, more person-alized relationships. The mobile phone creates a mechanism not only for establishing a virtuous circle of insight, but one that allows consumers to feel a greater intimacy with the business.

Getting Started Continued

Select communications channels. There are plenty of ways for enterprises to

communicate with their customers, and some-times customers want a choice. For instance, if all customers want is a bank balance, it’s simpler for them to open up a browser on their computer or an app on their mobile phone and get the information. For a more complex question, they may want to use the phone to talk to someone in a call center. How much flexibility are you going to provide them? The decision-making process can get particularly granular; for instance, many mobile phone apps provide functionality without having to be connected to the Internet, but mobile Web applications, accessed through a browser, require connectivity. Enterprises have to know the likely scenario of how customers will want to interact.

Accommodate multiple platforms. What mobile phone platforms are

customers most likely to use? Enterprises targeting business customers may want to have an app that runs on the BlackBerry. If customers are smartphone users, an app running on Apple’s iOS operating system might suffice. Companies whose customers span multiple demographics — for instance, airlines or car rental companies — need to support a wider range of mobile devices.

7 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

Creating a Holistic Mobile Commerce Strategy

Perhaps one of the most important steps in crafting an engagement strategy is to remember that its elements are tightly inter-connected. Enterprises must under-stand that transactions do not exist in isolation; in fact, they’re only one segment of the cycle of commerce that mobile phones enable. It starts with building awareness, inspiring a transaction, following up with the customer, and using that information to start the cycle all over again.

Doing so involves a sequence of separate but related efforts as well. For instance, in building awareness,

enterprises can use a variety of mobile marketing and mobile advertising services. The convergence of social media tools and mobility makes it easier to target prospects within a specific vicinity. Text messaging and other communications tools offer simple methods for contacting prospects as well.

The next step enables the transaction. One caveat: enterprises should make this as simple as possible. Complex, multi-screen or multi-step requirements can frustrate customers, so transactions and payments should be fast, secure, and unobtrusive. Similarly, it should be easy for customers to see their tally of loyalty points and take advantage of them, either when they’re redeeming them or sharing them with friends or family.

Once an enterprise has managed the transaction, it’s time to manage the relationship, striving to move past a single transaction to an ongoing interaction. Enterprises have multiple options for communicating to customers that they value the relationship. They can offer loyalty points, coupons, or discounts. They can request feedback on either current or potential products through surveys or feedback. They can send notifications of sales and promotions to customers via their mobile phones.

A key facet of any mobile commerce strategy is establishing the ability to collect and analyze data for patterns of behavior.

In Seoul, South Korea, grocer Tesco placed electronic billboards in the subway stations, allowing commut ers to scan product codes, transmit them to a central server, and have those items delivered after they arrive home; the store reports its online sales have increased 130 percent since the cre ation of the billboards. Image taken from Tesco video from youtube.com

8 P L AY B O O K Mobile Commerce: The Path to Customer Engagement

On the back end, all of these activities promulgate data. What did customers do? How did they respond to a particular promotion? If there were multiple choices within the promotion, what gener-ated more response than others? A key facet of any mobile commerce strategy is establishing the ability to collect and analyze this data for patterns of behavior.

Furthermore, enterprises must be able to aggregate the data from disparate systems to derive holistic insight into what transpired. For instance, if you offered a coupon through both e-mail and a mobile message, you need to be able to combine those responses in order to derive the most accurate insight possible. Customer intelligence will provide the best foundation for starting the product development and awareness cycle all over again.

What is it that customers really want from mobile commerce?

They want their lives to be simpler. They want their mobile phones to be not only their emissary into the digital world, taking them places they’ve never been, but also their concierge, making the journey simpler and more enjoyable.

Imagine someone waking in the morning and facing their to-do list: bills are due, birthdays are being celebrated. Without missing a beat, they can use mobile payment capabilities to dispatch the bills and send a gift certificate to the celebrants.

On the way to work, they get traffic updates about closed roads and other delays. At lunch, they go shop-ping and use their mobile phone to pay for the parking meter. As they approach certain stores, coupons and promotions pop up on their phone, inviting them to partake. They take pictures of merchandise and send them to friends for their immediate feedback. The purchase of the merchandise entitles them to enter a sweepstakes for an upcoming concert. They do so, and when they win the tickets, they’re asked if they want e-mail updates about the group’s future tours. By this time, they may need to download more minutes for their phone, but they can do that automatically as well.

Companies that help customers do these things — whether it’s a bank or a telecommunications provider or a retailer — are offering more than a transaction. They’re offering a service, and doing it in such a way — simple, efficient, fast — that customers will appreciate and even enjoy. Churn may be a thing of the past, but enterprises that can learn as much they can about what pleases their customers and deliver it will themselves enjoy thriving, ongoing relationships.

Creating a Holistic Mobile Commerce Strategy continued

Video: A Day in the Life of a Mobile Consumer

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See how mobile commerce can make your customers’ daily chores easier to tackle.

Consumers want their mobile phones to be not only their emis-sary into the digital world, taking them places they’ve never been, but also their concierge, making the journey simpler and more enjoyable.

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