The Four Pillars of Successful <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Mobile Marketing<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Chapter excerpt from Mobile Persuasion: Perspectives on the Future of Influence

Published by Stanford University's Mobile Persuasion Lab, April 2007
by Eric Holmen, President, SmartReply, Inc.

Mobile marketing has potential to make the mobile phone experience miserable. Because mobile communications are highly personal, they differ from other advertising-enriched technologies, including radio, TV and web. Mobile advertisers have little understanding of the recipient’s environment when messages are delivered. With TV or Internet advertising, marketers can be fairly certain of conditions and engagement with content. That is not the case with mobile ads, though done well, mobile marketing offers great value to advertisers and recipients.

Here’s one example of a win-win solution in mobile marketing. During the summer of 2006, gas prices had risen to record levels by as much as 80% in some parts of the US. Consumers were very unhappy. The trend also presented a problem for our client Meijer Supercenters, which operates gas stations within parking lots of its superstores.

To keep customers happy, Meijer launched an innovative mobile messaging alert system. Prior to a price increase, Meijer would alert interested customers via text, allowing them 4 to 6 hours to fill up before prices were updated. A simple yet valuable alignment of content and context.

Customers felt in control. Meijer provided a service and saved them money. And the retailer benefited too; as customers topped off tanks, they also grabbed fixings for dinner or a new sweatshirt. Value, it appears, is contagious from the parking lot to the store shelves.

To most, mobile messaging seems simple - each message has 160 characters. How complicated is that? Very complicated, we learned. Mobile (or any marketing) in and of itself does not drive business transactions. Relationships do. Successful and engaging relationships will lead to a greater number of transactions over time. So the complexity lies in the relationship with the consumer, not the medium.

To navigate the complexity of creating successful mobile marketing campaigns, we summarized what we call our “four pillars” of a mobile marketing vision:

1. Consumer preference is a sovereign right.  Consumers are protective of their phones and rightly so. They must be able to engage and disengage at will, by any means. Advertisers who do not honor consumer preferences will get banished.

2. Great marketing is a service.  Mobile marketing can provide valuable services to customers, e.g., an SMS alerting price increases or discounts, or an MMS (multimedia message) to help complete tasks, like cooking a meal from products purchased at the marketer’s store.  These services can inspire customer loyalty.

3. Personalization is critical.   Customers may respond to a mobile marketing campaign one time, out of novelty.  To achieve consistent results, however, requires personalizing the message - leading to increased customer transactions.

4. Relationships drive transactions.  In contrast to marketing via other media, mobile campaigns may not generate immediate transaction spikes. Rather, developing engaging relationships with customers leads to a greater number of transactions over time.  

This last statement may seem obvious today, but has not always been to traditional marketers accustomed to immediate spikes in business that followed TV and newsprint campaigns. Today, the growth of interactive marketing—especially the mobile platform—highlights how much success depends on developing relationships between brands and customers. So how do you develop this relationship?

1) Brands need to provide their customers with valuable services;

2) Personalized for each customer;  

3) Delivered in a way that respects customer wishes.

Almost daily someone asks: “How urgently should I launch a mobile initiative?” At SmartReply, we answer: If your competitor succeeds in engaging your customer before you, then your job becomes much harder, if not impossible.

Speed is not the only issue. In the near term, quick-and-dirty mobile campaigns will work. Because mobile ads are still novel in the US, people respond to them. But only once. The ongoing prospects for this approach are not good, appealing only to discount shoppers who have no loyalty to brands.

To that end, we encourage companies to understand which customer types create real value. Discount-driven customers are not profitable in the long run, whereas customers with brand loyalty generate 70% of the margin. Note - valuable customers only welcome mobile messages that are relationship-driven.  Other communications to their mobiles get blacklisted.

Advertising is about the sizzle, not the steak. As companies plan a mobile marketing strategy, they would be wise to avoid the pitfalls of advertising sizzle. While TV and radio excel in delivering an enticing brand promise, the mobile platform is uniquely positioned to transform the brand promise into a concrete reality.

About SmartReply

The only voice and mobile messaging company dedicated to meet the challenges and objectives of the retailing industry, SmartReply's mobile solutions have created breakthrough results for over 80 leading retailers throughout the US and Canada. Information can be found at www.SmartReply.com or by calling (800)-785-6769.