You’re driving down the road and hungry for a burger when your iPhone beeps, “20 percent off at Burger King one block east from next exit ramp.” Or you’re thinking about a vacation in Hawaii, when hotels on Maui seem to be competing for you to book a reservation.
The power of this instant messaging seems undeniable. What better way to sell something to consumers (or businesses) than to know what it is they need before they express it? This is not a coffee commercial seen by people who don’t drink coffee. This is marketing to people who are in the market for what you’ve got. Right this minute.
The hitch? As it turns out, “pushing” a carefully curated marketing message to a consumer on a mobile device is not quite as straightforward as it sounds. This is not to say that this ubiquitous and fast-growing business-to-consumer (B2C) mode of marketing isn’t capable of cost-effectively increasing sales revenue.
It is. The problem is picking from a vast and ever-evolving assortment of tools promising to effectively reach consumers on the go.
The first mobile marketing tools were designed to analyze the buying behaviors of current customers to determine their intent to purchase something else or the same thing again. “The goal is to understand the consumer’s preferences to develop a profile of this person,” says Mike Rooney, senior vice president and general manager at BPMonline, a provider of customer relationship management (CRM) solutions. “People leave a breadcrumb trail—their social media interactions, Web browsing, search histories, online shopping cart patterns and other behaviors.”
Following these breadcrumbs tells marketers a lot about the person.
Knowing the person’s behaviors, marketers can create timely messages that are likely to appeal to the individual’s purchasing interests. Since other non-customers’ behaviors are likely similar, analyzing their search, browsing and transactional behaviors gives marketers the opportunity to target these consumers with the same compelling messages on their mobile devices.
Fast, Furious Growth
Last year, U.S. companies spent nearly $29 billion to reach consumers on their smartphones, tablets and laptops, a more than 50 percent increase from what they forked over in 2014. With that kind of marketing spend, small wonder that mobile marketing startups sprouted like mushrooms to serve the burgeoning interest. Some are a marvelous utopia of marketing, well-tested tools that will turn the needle on the sales meter. Others promise far more than they can deliver. “The primary risk of investing in mobile marketing technology or any kind of data analytics is the ‘shelfware effect’—something so complicated, complex and with so many wrinkles that marketers can’t put it into action,” says Andrew Moravick, senior research associate, marketing effectiveness and strategy, at Aberdeen Group.
More than half (56 percent) of marketing organizations currently use predictive analytics in their current marketing efforts, says Moravick. However many of them are “kind of doing stuff just to do stuff,” he adds.
Not that he and other marketing experts don’t see tremendous value in the predictive analytics at the heart of these tools. A survey by Lattice Engine of 308 CMOs and business unit directors whose companies have invested in predictive analytics credits the technology with increasing the respondents’ marketing ROI by more than 25 percent.
Says Moravick, “Mobile marketing makes tremendous sense.” Here’s why: By accumulating a vast storehouse of information on each of us—scraping our social media musings, recording our Internet browses, staying abreast of our changing demographics, compiling lists of our recent purchases and accumulating other personal details we’re willing to share, algorithms embedded in the tools can accurately posit what we’re in the market for.
Armed with this intelligence, a seller that swoops in with a persuasive message to a consumer at the opportune time already knows it has the person’s interest and attention. There’s a dark side to all this spit and polish. If the marketing message is late or even slightly off, if the tool has dug too deeply into our personal lives or if there are just too many messages barraging the consumer one after another ad nauseum, the strategy can be worse than ineffective. It can blacken a company’s brand, making consumers hate you. Really, really hate you—and spread their disgust like a malevolent Johnny Appleseed.
The Right Stuff
Turned off by mobile marketing now? Don’t be. Any CEO or CMO would be a fool not to invest in it. The question is how to go about it. YP.com, the company known best for the cinder block-sized Yellow Pages it still publishes, undertook extensive due diligence to figure that out.
Today, YP.Com is a consumer-facing web site and mobile app in the digital space, linking more than 70 million people to more than 20 million business listings each year.
To assist businesses in paring marketing costs and beefing up sales, YP.com uses Kahuna’s mobile marketing automation software. “We wanted to drive more engagements through ‘push’ marketing, mining the data that our consumers allow us to mine, and then using predictive analytics to help companies target their messages more accurately and personally,” says John Webster, YP.com senior marketing manager.
YP.com’s marketing sciences analytics team uses Kahuna to track the data it amasses on each individual signed up to use its mobile app.
“We know things,” Webster says. “For example, after someone spends money at an auto repair shop, their next search is often for food delivery because they can’t drive somewhere to pick up food. If the same person booked a table at a restaurant that evening, there’s a greater chance that they’ll need Uber or some other means of travel. Advertisers capture these insights to push personalized messages to the person.”
Julie Ginches, CMO of Kahuna, says such insights are derived from “the digital body language of a customer.” She adds, “The old way of marketing was to blast a message to many people in a particularized segment—soccer moms who like fast food. You then guessed what you think they wanted. If you’re wrong, that’s the perfect way to lose the prospect’s interest or alienate them.”
Kahuna, conversely, analyzes “individualized” data, actions you or I take this moment that, when added to other recent actions in our digital journey, trigger a seller to send a mobile marketing message precisely crafted to sell us what we seem to want or need. The strategy is paying off at YP.com. “Once we started sending personalized push messages, it increased the engagement between our app users and our advertisers by 180 percent,” Webster says.
By “engagement,” he means the handing over of money from a consumer to a listed company. Rather than someone logging onto a web site with the intent of buying something and leaving the shopping cart empty, the cash register rings.
The register is also ringing at other companies deploying automated marketing technologies. UPS Battery Center, a Toronto-based manufacturer and supplier of sealed lead acid batteries for medical devices, alarm systems and industrial battery applications, wanted to learn how customers searched for products on its web site to improve their experiences and its product selection.
“We thought customers would search for a battery based on the specifications, dimensions and terminal type,” says Anton Khramov, CEO and founder of the company. “Turns out we were wrong.”
UPS Battery Center turned to Swiftype, a predictive analytics tool for corporate search engines, for the answers. Search boxes on a web site are a powerful but underutilized marketing tool, says Matt Riley, Swiftype’s cofounder and CEO. “Whatever the consumer types in that box becomes an incident navigation menu,” he explains. “Each click from that moment forward tells you what this person is specifically looking for.”
Riley and his co-founding partner are software engineers who previously built search engines for businesses. “The marketing people were always interested in what we were doing; they wanted to know what the relevant search results were and fast,” he says. “That got us thinking about a tool that collected the search data and applied algorithms to this information to learn as much as you can about the visitors.”
UPS Battery Center learned quite a bit. “Using information from the search analytics, we created landing pages for products we didn’t have in stock,” Khramov says. “We found the products from other vendors, priced them properly and listed them on the site. If they started attracting more attention, we’d stock it or manufacture it ourselves.”
The company also found out that buyers were interested in options like a longer battery run time or stronger performance, information that changed marketing content. It also learned why some products had an unusually high return rate. Customers were searching the site for installation instructions. “We’ve since adjusted the web site to include the instructions, which reduced the rate of returns—a huge win for us,” Khramov says. “The more we derive from the analytics, the less we throw at marketing, buying keywords and spending money on research. Our orders have increased by 140 percent, revenues are up by 125 percent, and our conversion rates have improved by 116 percent.”
HotelTonight, the popular mobile app providing discount hotel rates, is leveraging a very different marketing tool, Apptimize, to optimize the app’s conversion rate. Apptimize is installed
inside HotelTonight’s mobile app to analyze “customers’ experiences inside the app,” says Nancy Hua, CEO and founder of Apptimize. When someone engages the app, “they have different reasons for doing this at different times,” Hua explains. “You don’t know if they’re just browsing or looking to get more information or ready to click and book.
The time of day and their location can be indicators of intent, alerting marketing which (promotional) deals will work better at which times.” Since users of HotelTonight’s app are booking a hotel room for that evening, this rapid intelligence can be very valuable to marketers, helping them adjust their messages to optimize conversion. For instance, as the day wears on, hotels that have not yet booked guests for that evening typically lower their prices. “Our inventory changes a lot on a day-to-day, market-to-market basis,” says Audrey Tsang, HotelTonight’s director of product.
To be sure Apptimize worked, HotelTonight tested it against a control group, using so-called A/B testing technology, in which two apps are going at the same time to determine which one performs better. The app with Apptimize inside it increased conversion rates by more than 26 percent, Tsang says.
While many marketing tools emphasize the predictive analytics, others highlight their messaging. SundaySky, for example, creates personalized consumer video messages based on a data-generated profile.
“We sit down with a client and do the typical analytics to understand their customers,” says Jeff Hirsch, SundaySky CMO. “Then, we design a scene library—dozens of different scenes that tell its story. Each scene has a different look, feel and purpose. Once we know a customer’s profile, we stitch together the scenes in a compelling narrative for that consumer.”
Atlantis Resorts uses SundaySky’s unique video platform to boost sales in its guest pre-arrival program. “The tool initiated a strategic way for us to think about personalized communications
throughout the guest lifecycle,” explains Adam Darnell, Atlantis Resorts director of CRM. “We quickly saw a 13 percent lift in pre-arrival guest spend and a 9 percent increase in overall trip spend.”
Too Good to be True?
By no means are these varied examples a stamp of approval for mobile marketing. Quick wins are rare. “The average marketer has the same chance of converting a net-new visitor into a closed-won deal as an average golfer has of hitting a hole-in-one,” says Aberdeen’s Moravick. Nevertheless, by carefully cultivating a relationship with a consumer on an individualized basis, mobile marketing has a good chance of turning the person into a long-term customer. “Historically, marketers would try to influence a sale with a visually appealing logo or a jingle you can’t get out of your head—the predator-prey dynamic,” Moravick says. “With mobile marketing, this dynamic transforms into a relationship, an ongoing exchange of information between brands and consumers. Instead of feeling exploited—marketers always trying to swindle them out of their money—consumers feel served.”