People & Dreams

Archivo -octubre 2012

Considerations for leveraging loyalty across mobile, web and in person Read

Loyalty is a big business in travel – travelers accumulated an estimated value of $48 billion in loyalty points last year, while companies spent around $2 billion in actual cash. And yet, according to the CMO Council, only 13% of marketers believe their program has been “highly effective.”

With all of this money floating around – and the business revenues attached to it – here are some insights on leveraging this opportunity into true loyalty that effectively drives top-line revenue.

Defining ‘Loyalty’

“Loyalty” is an amorphous concept that often lacks concrete definition in the travel industry. It’s loosely defined as creating a product, service or program that users love enough to return often as a “regular.” Loyalty breeds passion, brand evangelism and dedication that should boost income and guest satisfaction.

Beyond this general definition, there are many questions, questions with answers unlikely to be shared by any two travel brands. Who are these loyal customers? Are they the right customers for the brand? What motivates them? How can we reward the loyalty of customers most likely to bring repeat business? What is the monetary value of a loyal customer to our brand?

And what about loyalty across channels? How do we approach loyal customers on mobile, on the web and in-person? Exploring these questions are an essential lead-in to building a successful loyalty program – or revisiting a currently existing one.

The Holy Grail: Permission

I spoke with Howard Schneider of Metzner Schneider Associates about some of the important considerations that brands must make when building a loyalty program.

The first key consideration is the point of a loyalty program – what are the goals for the program, and how much is the brand willing to spend on perks and benefits?

“Loyalty itself is kind of a misnomer – we’re not talking about loyalty to a dog, but loyal behavior which is defined as: Measurably incremental profit driven by customer engagement, enabled by an understanding of individual customer needs, interests and behavior.”

In order to understand individual customer behaviors, brands need permission to collect and analyze this data.

The very first airline loyalty program at American Airlines was predicated on this very fact: the airline had many customers and yet they had absolutely no knowledge about them. So by offering the loyalty program, the airline was able to identify, and get permission from, their customers.

“The real purpose of a loyalty program in today’s environment is to get actionable data via a permissioned relationship.

You communicate with people via email and mobile; lots of businesses have data on customers through data overlays and other traditional ways of obtaining data. Yet they can’t use that on an individual basis for communication because they don’t have permission. [Loyalty] ensures a permissioned, transparent relationship with your customer, and the value lies in gathering that data.”

By first getting the participant’s permission, brands can then begin owning the client relationship with direct, measurable interactions that build incremental revenue.

Reward vs. Risk, Emotional vs. Rational

There are also some key risks within this permissioned relationship, centered around the key components of any loyalty program: the Emotional and the Rational.

On the emotional side, it’s important to throughly trigger the reward side of a particular customer’s motivation equation. By giving them rewards that activate a key emotion – whether it’s status, access or a feeling of belonging – brands can forge an emotional bond with their customer.

Schneider looks at the emotional component of a loyalty program when determining its structure. By determining what triggers the right emotions, companies can formulate a perk structure that encourages the desired behavior.

Howard Schneider:

“Loyalty is inherently emotional: you want people to feel good about doing business with you.

Companies must give something meaningful to people so that the emotion is still there. It’s also value driven. For example, if I have to fly 100 times before I get a reward, I’m going to feel cheated. On the other hand, if I fly only once and get a reward that might be too easy.

Loyalty isn’t to reward the best customers – it exists to motivate the best customers to stay in addition to motivating identified segments to do more.”

In reality, and in perception, loyalty rewards must be valuable enough to motivate the customer. And yet, the rewards need to motivate the customer towards a behavior that they might not otherwise have had.

Customers will gladly take rewards even for behavior they were going to do anyway, and at the same time it’s easy to give away rewards to the wrong customer. So beware both the under- and over-reward, as well as the misplaced reward.

After considering the emotional component of the loyalty program, companies can then look to the rational side for the actual mechanics of the program. Determining the program’s related return and variable costs, companies can see the peak ROI for a particular program by plotting out the Program Return ($, etc) against the Reward Value (%).

Schneider finds the rational side oftentimes lacking, where businesses get the emotional component but fail to grasp how it will make them money:

“Ultimately, all businesses considering a loyalty program should run the financials to determine how much they can afford to spend to get a 1% increase in loyal business.

The big risk is to not totally understand the economics and to give away too much – or do something in a program that’s uneconomical.

You have to do the financials. These are financial based marketing programs and they are highly measurable so you can understand how you’re doing. Understand the economic risks, and balance them with the value received on the customer side.”

The equation could be posited as such, where the final Loyalty Value is a percentage increase in revenues, Reward Value is the actual face value of the reward, Reward Cost is the full variable cost for the labor, goods and program admin, and the Percentage Increase is how much more a loyal customer spends in percent:

Loyalty Value = Reward Value/Reward Cost * % Increase in Business From Loyal Customer

By considering these various elements – and taking a dual-pronged Emotional + Rational approach – even the smallest of businesses can create and periodically tweak a loyalty program that rewards desired behavior from the right customer.

It must be noted here that NOT considering the financials – by just “going with the gut” without analyzing true behaviors – businesses of all stripes risk over- or under-rewarding, alienating customers, and losing money.

Beyond Points: Loyalty Across Channels

Loyalty doesn’t only have to refer to a program that provides points to customers as rewards for patronage.

Loyalty is also an essential component to build across other channels, such as a consumer-facing travel app that wants to encourage regular visitors. From badges on Foursquare to Yelp’s Elite Squad, there are many different models for loyalty across the travel industry.

In a recent whitepaper, the data specialists at Kontagent urged readers to “Don’t fly blind,” offering lessons in loyalty for travel app owners. The idea being that the mobile channel provides its own unique context for loyalty, and that brands must consider this channel specifically when building a loyalty program.

The key lessons offered up by Kontagent (read them in full here) are:

  1. If you build it they won’t come. Discovery is hard, there are many apps, and competition is fierce. Segment across channels and use analytics to optimize the highest ROI channels. Oh, and build a fantastic, super-engaging app that people love!
  2. Downloads don’t mean anything. 95% of people who download won’t even use your app! So monitor the behavior of super-users and optimize accordingly. Find the spots where the engagement is highest and build from there.
  3. Revenue shouldn’t be your #1 priority. App should offer content and/or utility that hooks consumers, followed by long-term revenue strategy. Engage customers now on mobile, which is primarily a discovery tool, and use the actual user behavior to inform monetization.
  4. Agility wins. Measure and improve constantly. Be a work-in-progress, follow your user through extensive analytics, and use data to drive development decisions.
  5. Mobile is not like the Web. Different analytics and metrics needed for understanding how users navigate the app.

By taking these mobile-centric tips to loyalty, companies can enact a sub-loyalty program for each channel that works together to drive desired behavior within each channel individually in addition to pushing customers across channels for various transactions. Companies like PunchTab are building full businesses in driving the cross-channel engagement that can help companies of all sizes develop communities of loyal users.

The final channel that many consumer-facing brands with brick-and-mortar locations is the in-person experience. Here is where we leave it with you, dear battle-weary reader. What are some considerations that brick-and-mortar brands with in-person customer service (hotels, airlines, tour companies) must make when attempting to use a face-to-face interaction to reward, increase or encourage loyalty?

NB: Loyalty image from Shutterstock

Read more at http://www.tnooz.com/2012/10/16/how-to/considerations-for-leveraging-loyalty-across-mobile-web-and-in-person/#twKlpfU9YSyCc2q1.99

Customers Respond to Sites Whipped into Mobile Shape Read

Mobile-optimized sites drive sales, return visits

The shift to mobile may seem to have happened overnight, but that doesn’t mean that consumers are cutting retailers any slack when it comes to adapting to the mobile web. According to a July 2012 survey of US adult smartphone internet users conducted by market research and consulting firm SmithGeiger and Sterling Research on behalf of Google, about two-thirds of respondents said they were more likely to purchase something from a mobile-optimized site, while three-quarters said they were more likely to make a return visit to the site.

Consumers’ desire for mobile-friendly sites stretched across pretty much all verticals. But its use was often closely tied to obtaining information about physical business locations—the first or second most important task identified by consumers in all industry categories was getting directions to a store or obtaining store hours.

Retail customers were no exception to these behaviors—74% of smartphone users named obtaining the location or operating hours of a physical store as their most important mobile retail task. That was followed by contacting the store (64%), getting information about products (61%) and then making an online purchase (50%).

Unsurprisingly, travelers using the mobile web expressed a desire to get information about the details of their trips. Almost eight in 10 surveyed used their device to check on the status of a flight. The next most important task was getting directions or operating hours, at 74%, followed by flight check-ins/reservations (69%), finding a business location (65%), account log-ins (64%) and then searching for flights, hotels and car rentals (63%).

Bank customers listed as their most important tasks checking account balances (77%), getting directions/store hours (65%), logging into accounts (61%), paying bills (51%) and transferring money (51%).

For businesses, getting a website into mobile shape should be a no-brainer. Google found that failing to design sites for mobile had spillover effects, potentially damaging the reputation of the company. And consumers’ adoption of the mobile web is only going to continue. eMarketer projects that the number of US mobile internet users will hit 198.8 million in 2016.

Corporate subscribers have access to all eMarketer analyst reports, articles, data and more. Join the over 750 companies already benefiting from eMarketer’s approach. Learn more.

Read more at http://www.emarketer.com/Article.aspx?R=1009416#SZcR7MweFXkVaerI.99

How To Leverage Mobile Loyalty

Heather Leonard Oct. 17, 9:05 AM

Mobile Insights is the new daily newsletter from BI Intelligence that collects and delivers the top mobile strategy news. It is delivered first thing every morning exclusively to BI Intelligence subscribers.


Mobile-Optimized Sites Drive Sales, Return Visits (eMarketer)
Consumers’ desire for mobile-friendly sites stretched across pretty much all verticals. Use is often closely tied to obtaining information about physical business locations, with the first or second most important task identified by consumers in all industry categories was getting directions to a store or obtaining store hours. Retail customers were no exception to these behaviors:

important mobile retail tasks

eMarketer

Unsurprisingly, travelers using the mobile web expressed a desire to get information about the details of their trips:

important mobile travel tasks

eMarketer

Same with bank customers:

important mobile banking tasks

eMarketer

For businesses, getting a website into mobile shape should be a no-brainer.

Considerations For Leveraging Mobile Loyalty (tnooz)
As an example, loyalty is a big business in travel. Travelers accumulated an estimated value of $48 billion in loyalty points last year, while companies spent around $2 billion in actual cash. And yet, according to the CMO Council, only 13% of marketers believe their program has been «highly effective.» Here are some questions that companies should ask themselves when it comes to loyalty:

  • Who are these loyal customers?
  • Are they the right customers for the brand?
  • What motivates them?
  • How can we reward the loyalty of customers most likely to bring repeat business?
  • What is the monetary value of a loyal customer to our brand?
  • And what about loyalty across channels?
  • How do we approach loyal customers on mobile, on the web and in-person?

Here are some key lessons:

  • If you build it they won’t come
  • Downloads don’t mean anything
  • Revenue shouldn’t be your #1 priority
  • Agility wins
  • Mobile is not like the Web

By taking these mobile-centric tips to loyalty, companies can enact a sub-loyalty program for each channel that works together to drive desired behavior within each channel individually in addition to pushing customers across channels for various transactions.

Mobile Users Concerned About Privacy And Cost (Ernst & Young via Warc)
Ernst & Young polled 6,000 web users in 12 countries. Here are some of the statistics:

  • 59% of went online using a mobile phone several times a week
  • 49% of mobile users are visiting social networks
  • Another 25% of people leveraged instant messaging platforms
  • Mobile video witnessed an 18% penetration
  • Music services had 17% penetration
  • Third-party app stores logged 13%
  • Some 8% of the panel had used their phone to make payments in physical locations or transferred money in this way

Fears of overspending and a lack of clarity about data plans act as major disincentive for trying new mobile services. Worries linked to privacy and entering credit card details played a similar role.

Beginners Guide To Mobile Payments (American Express OPEN Forum)
Mobile payment technology is providing businesses of all shapes and sizes with new payment-acceptance solutions that capitalize on mobile commerce to attract new business, cultivate loyalty with existing customers and grow revenues. Here are the most popular mobile payment options to help small businesses form a plan to make the most of this emerging technology:

  1. NFC and Mobile Wallets
  2. QR Codes and Loyalty Programs
  3. Mobile Payment Acceptance

The next step is deciding which system works best for you and your customers. To get started, begin by outlining your specific needs and goals. This will help pinpoint which mobile payment option supports your business plan.

How To Get Your Mobile Strategy Ready For Multi-Screen Web (Search Engine Journal)
Nowadays, it’s not mobile vs. desktop any longer. We are now talking about multi-screen user experience, during which the searcher transcends different types of gadgets and different screens to complete one goal. Conclusion: In practice, mobile experience is not opposed to desktop experience, but compliments it. There are a few approaches to design:

  1. A mobile site
  2. Responsive web design
  3. A mobile app
  4. Local + Social
  5. Offer-oriented mobile web presence

Not only should businesses create mobile presence for their brand, but also optimize their mobile site / offer for the search engines. There are also great examples of brands that have optimized their mobile strategies.

Survey Of IT Managers Suggests Preference For Microsoft Mobile Platforms (CIO)
Almost half of IT managers (48%) in a survey by ThinkEquity said that they plan to standardize their company’s mobile platform on devices running Microsoft operating systems, including smartphone OSes Windows Phone 7.5 and Windows Phone 8 and tablet OS Windows RT. That is up from 44% in a similar survey three months before. Google’s Android OS dropped to 8% from 11%, while Apple’s iOS grew from 10% to 14%. The survey polled 100 U.S.-based IT managers, including CIOs, technology vice presidents and IT directors, from a variety of industries. More than 75% of the respondents worked for companies with more than 500 employees. A big factor behind Microsoft’s strong showing is the «strength and longevity» of its Office productivity suite.

5 Major Benefits of Mobile Payments

When customers come to the register to pay for their meal or purchases, many can now simply hold up their mobile phones instead of handing over dollar bills or pulling out a credit card. Since mobile payment programs are relatively inexpensive and don’t require sophisticated technical knowledge to implement, many small businesses have been quick to adopt the new technology.

“Mobile has really taken away the requirement that you have to build big systems and be a large company to be successful with technology,” says Gene Signorini, the vice president of mobile insights at Mobiquity. “In many ways, it is easier for small businesses to adopt mobile payment programs because they don’t have a large infrastructure to work through so small businesses can jump right in.”

Here are five ways offering a mobile payment to your customers will help you increase sales:

Integrate and increase incentive programs. One of the biggest benefits of using a mobile payment option is the ability to integrate loyalty and incentive programs into the mobile payment applications. Instead of customers having to keep up with punch cards or key ring tags, all of their information is stored in the application each time they make a purchase with their mobile device. “If businesses use technology to link a payment to their points or other loyalty programs then it adds value to the customer. This makes the customer want to return, which then increases revenue,” Signorini says.

Ability to offer credit card payments. Previously, many small businesses, especially those operating at remote locations such as a farmers’ market or a food truck, were unable to accept credit card payments. Being a cash-only business often decreased sales because customers without enough cash on hand were unable to buy their products. So when a cash-only business can start to accept credit card payments through a mobile payment program, they immediately increase their customer base and increases sales.

Track customer trends and inventory. A common struggle for small businesses is tracking inventory and customer behavior. But with mobile payment services, you can automate these processes and better serve your customers. “Small businesses using mobile payments can now track what product and services they are selling to understand customer demands. Not only can they now capture payment information, but they can learn about their customers and use that information to improve service,” Signorini says. For example, a business can use the purchasing data to learn that they sell a lot of chicken sandwiches on Thursdays, and make sure that they have enough ingredients on hand. By meeting customer demand, they increase product sales and improve customer service.

Increase speed of checking customers out. Customers like quick service, especially when paying since that is typically their least favorite part of the shopping or dining experience. Most customers and staff find that it’s considerably quicker to pay with a mobile device than a credit card. Customers typically are more willing to return if they don’t have to wait a long time in line.

The time savings can also directly increase profits by allowing you to accommodate more customers in the same period of time, especially for businesses with a very busy period during the day, such as a lunch rush at a restaurant. “By using mobile payments, we can move customers through the hot dog shop quicker. During a busy lunch we can serve 250 customers if we keep people moving,” says Keith Garabedian, owner of Hot Diggity in Philadelphia.

Save money on credit card fees. Some mobile payment companies charge less per transaction than credit card companies, which equates to direct savings for the company. Garabedian says that one of the reasons he uses LevelUp for mobile payments is that he doesn’t pay any transaction fees until a customer meets incentive levels. With Square mobile payments, the business pays 2.75 percent of each sale as the transaction cost, which is a lower fee than those associated with some credit cards. Since each company structures payment differently, investigate the different mobile payment programs to determine which is most cost effective for your business.

How Mobile Payment Solutions Can Increase Sales

Mobile Insights is the new daily newsletter from BI Intelligence that collects and delivers the top mobile strategy news. It is delivered first thing every morning exclusively to BI Intelligence subscribers.


5 Major Benefits Of Mobile Payments (American Express OPEN Forum)
Here are five ways offering a mobile payment to your customers will help you increase sales:

  • Integrate and increase incentive programs
  • Ability to offer credit card payments
  • Track customer trends and inventory
  • Increase speed of checking customers out
  • Save money on credit card fees

Since mobile payment programs are relatively inexpensive and don’t require sophisticated technical knowledge to implement, small businesses should be quick to adopt the new technology.

Enterprise Mobility And The Art Of The Possible (Read Write Web)
The key to enterprise mobility is getting past the quagmire to the art of the possible. The three biggest hurdles that enterprises face in creating internal mobile solutions, include:

  • How to secure devices and data
  • How to create solutions across multiple smartphone platforms and operating systems
  • How to connect everything (back-end systems, cellular connections etc.).

So what is the art of the possible? In this context, the possible is not the current landscape that enterprises find themselves but rather the next step where companies fully harness the capabilities that smartphones can offer. Most enterprises are just trying to catch up to the transformation that mobility has brought. The companies that can quickly iterate through the current obstacles and move onto creating dynamic new functions will be the ones that will reap the benefits.

Native Apps Vs. Web Apps: The Publisher Debate Continues (Read Write Web)
Here is the catch with apps: They are expensive to develop. But the mobile web is no picnic either and can be limiting. So publishers have to consider both. Engagement is the primary difference in how users will interact with brands between the mobile web and native apps. If users navigate to your publication through a mobile browser, they are likely looking for timely, topical information. People are on the go and are not consuming content in large doses as they would when sitting at a computer. Yet, if consumers become engaged and loyal to a brand, they are more likely to download (and possibly pay) for an app. The wrong choice when deciding on how to approach mobile content delivery is to try and force a traditional media strategy into the mobile environment.

HTML5 Vs. Apps: Why The Debate Matters, And Who Will Win (BI Intelligence)
A recent report from BI Intelligence explains the difference between HTML5 and apps and what that will look like for consumers, developers, and brands. Here’s why the Apps-vs-HTML5 debate matters:

  • Distribution
  • Monetization
  • Platform power and network effects
  • Functionality

So, which will win? Native apps or HTML5? Access the full report here.

html5 support

1 Billion People Still Don’t Have Mobile Phones (ITU via Daily Mail)
According to the International Telecommunications Union (ITU), 6 billion people (or six out of seven of the world’s population) had a subscription to a mobile phone by the end of 2011, an increase of 600 million from 2010. That means that 1 billion others still do not. And about a third of the world’s population (or 2.3 billion) does not have access to the internet. Generally, there has been an increase in people using mobile phones worldwide as the number of people acquiring mobile phone subscriptions has risen sharply in recent years with developing countries seeing a double-digit growth in 2011. The use of mobile broadband grew by 78% in developing countries and 40% across the world. Bottom line: Mobile is a massive market.

Mobile Statistics 2011 (Pingdom via WriteMania)
In echoing the sentiment above, here are some more interesting mobile statistics prepared by Pingdom. The company relied on dozens of sources that came to 8 statistical rankings:

  • 1.2 billion is the number of Mobile Broadband subscribers around the world
  • 5.9 billion is the estimated number of mobile phone numbers subscriptions around the world
  • 85% of the phones that are shipped around the world for the year 2011 have the application of the internet
  • 88% is the percentage of internet data transfer, which was used by Apple’s iPad device compared to the rest of other tablet devices during last December

It’s interesting to see that there are also more mobile phone subscribers than email subscribers.

Social And Mobile: Two Defining Trends (BI Intelligence)
Social and mobile transformed the Internet as we knew it. And the two trends are fast becoming inextricable. In BI Intelligence’s Social and Mobile: Two Defining Trends, we look at:

  • The continued shift of social networking to mobile.
  • How smartphones compound the difficulties of advertising on social networks.
  • The potential of social commerce and social discovery applications.
  • The players who have the early lead in monetizing social-mobile media.

BI Intelligence’s Editor-in-Chief Henry Blodget presented this deck at our recent Social Media ROI event. The slides update our last report on mobility and social networks.

frequency of u.s. social network use

BI Intelligence, ComScore

Investors Won’t Buy Your Hockey Stick Chart

Why I Needed Financing for My Business

Shortly after my college graduation, a few friends and I started a new media company. Within a few weeks we fleshed out the concept, wrote a business plan and set out to seek financing. Looking back, the company didn’t stand a chance of raising a dime — but this is the reality for most start ups. No one invests in ideas or pre-revenue start ups anymore, and it important that entrepreneurs understand this harsh reality.

What Choices I Evaluated, What I Chose to Do, and Why

I assumed the best route to start up capital was venture capital. I couldn’t have been more wrong — or more insane.

I remember thinking, “How hard could it be to raise $15 million?” My friends and I were obviously naïve, foolish and delusional.

With a little hustle, I managed to get us a meeting with a well-known investment firm to discuss the opportunity. Even though our business had yet to bring in a single dollar, and none of us had ever been the CEO of coffee shop let alone a multi-million dollar enterprise, we were all confident that we had a sure thing on our hands. After all, our financial projections forecasted gross revenues of $200 million. What investor could say no to that?

There was one small problem with our plan. None of us had any idea how to pitch an investor. So I did what any clueless entrepreneurial upstart would do: Google searched “how to pitch an investor”.

Nothing that I read online could have prepared me for what was to come. We would quickly find out that our presentation was doomed before we ever set foot into the meeting. In reality, it was doomed before we started writing the business plan. At the beginning of the meeting one of the investors asked me to hand him a one-page executive summary review. I hadn’t prepared a summary, so I handed him the first 11 pages out of the binder encasing my 95-page business plan. Strike one.

Less than four slides into my 32-slide presentation, the second investor interrupted me and said, “OK. Stop. I get it. You definitely don’t need $15 million.”

Defending our business plan, I overconfidently replied: “It can’t be done for less.”

“Really? It can’t be done, huh?” he responded with a smirk masking a hint of laughter. Strike two.

Both of the investors then proceeded to hit us with a barrage of questions:

“How much money have you personally put into your business? Anywhere near $15 million?»

“Why should I pay a bunch of twenty-somethings with no track record $100,000 executive salaries?”

“How much revenue has the business produced to date?”

“Why should I give you $15 million when the company hasn’t even made $15?»

“How can you possibly substantiate gross revenues of $200 million in year three?”

The questions went on and on. None of our answers were favorable. Strike three.

As you might have guessed, I didn’t walk out of that meeting with a $15 million check. I later realized, however, that this was one of the greatest educational experiences of my career.

Lessons Learned

  • No One Will Give You Money – If you need large sums of capital to launch your venture, go back to the drawing board. Scale down pricey plans and grandiose expenditures. Simplify the idea until it’s manageable as an early stage venture.
  • Prove Your Business – Never hypothesize. Bootstrap and execute. A company with cash flow and a track record has a better chance of getting investors than a business plan forecasting large returns.
  • Leave the hockey sticks on the ice – Respectable investors will not take you seriously if you claim your revenues will grow from $100,000 to $50 million in three years.

Original: http://entrepreneurs.about.com/u/sty/financing/SmallBusinessFinancing/Investors-Won-t-Buy-Your-Hockey-Stick-Chart.htm