Posts filed under 'Marketing'
Whole Foods is doing it. The 5 nail salons down the street are doing it. The local outdoor shop is doing it (twice). Even the fanciest restaurant in town has succumbed to the pull of the daily deal. Are you starting to wonder if your business should jump on the daily deal bandwagon? And if you do decide to jump on, how can you effectively acquire and retain these new customers?
For the sake of research, I subscribed to nearly 30 daily deal, specialty, group buying and members only sites and then treated myself to groceries, dinners, manicures, outdoor gear and sailing lessons.
First let’s consider why different companies choose to participate in daily deals.
Whole Foods ran a nation-wide deal with LivingSocial in hopes of quickly acquiring new customers and that they did – within a few hours they maxed out at their 1,000,000 deal limit. Whether they will make money off the deal is questionable; there is no clear upsell plan in place and they don’t know how many coupon redeemers were new vs. old customers. However, the free viral marketing they got from the deal was fantastic. Facebook and Twitter were on fire with people sharing the deal in hopes of getting the deal for free.
Neighborhood restaurants, shops and salons are using daily deals to build awareness and drive traffic into their shops. Because of these great offers, I have tried out three different nail salons, many new restaurants and even a new hair salon (I won’t do that again.) Unless the service is excellent or differentiated, chances are I won’t return without being incentivized again.
Back in March, a local outdoor retail store used LivingSocial to offer a daily deal. I redeemed my coupon in July and during the purchase process they collected the following data: my email address, how much I spent and if I had ever been into the store before. In September they offered the same deal on Groupon and I quickly snatched it up. Why does this shop keep offering up these deals? One reason could be that this store has some huge competition in the Seattle area – customer favorite REI (who recently partnered with Google Offers to give consumers a $25 for $15 deal.) Because of the second deal, I am going to return to this local outdoor shop for a second time. Again I have $25 of their dollars to spend but have no other incentive to stick around and change loyalties.
One of the first deals I saw on a site called Zozi was sailing lessons for two. I had never heard of the company but it sounded legit so I invited my friend to come along. We showed up and as we were sailing I peppered the owner/instructor with questions. Why did you choose to do a daily deal? He was a new business and wanted to build brand awareness and bring in new customers. Why did you choose to go with Zozi? It was a company that offered local experiences and would complement his brand well. How do you plan on getting me to come back? He would give us another discount if we decided to come back for the next level of sailing classes. We said maybe in the spring.
Even the fanciest of restaurants, the ones who said they would never do a daily deal for fear of brand dilution, have succumbed to the pull of the daily deal. One restaurant partnered with a premium deal site to offer an exclusive experience, at a discount. Unfortunately, a discount is a discount, no matter how it is framed. Once people get used to getting discounts it is hard to get them back without another discount. Luckily this restaurant offers a topnotch customer experience and shouldn’t have a problem. However, I recommend that other high-end brands be careful about offering up their services at a discount to the masses if they want to maintain their brand equity and pricing power.
Before you call up Groupon, you need to decide which daily deal company best suits your needs and how you are going to get the most value out of your offer. Groupon, LivingSocial, Google Offers and AmazonLocal are the heavy hitters in this market. They have the largest subscriber base so if you are looking for as many purchases as possible and have a flexible launch date, these might be your best bets. If your offering is more niche you can consider other options. Tippr, Urban Dealight and DealFind have more of a local feel. Zozi offers adventures and experiences. Zulily focuses on daily deals for moms, babies and kids. Bloomspot (and Bloomspot premium) have a more polished feel, though many of the deals are similar to the other sites. There are also invite-only sites like Rue La La (Rue Seattle) which offer higher end deals.
Once you have your partner picked out you need to consider one more, often overlooked, detail before you launch your first deal. How you are going to make money off these newly acquired customers in the future? The worst thing I can think of is that a customer buys a $40 coupon for $20, comes into your shop, spends the $40 and then never returns. You have to create a customer experience that will drive upsell and create customer lifetime value. How can you do this? Collecting data is the first step. Just like that local outdoor shop, if the customer is willing, ask for their contact information and create a shopping history log by noting how much they spend, what they bought and if they have ever made a purchase in your shop. Then you can use this data to create a personalized reason for this person to come back. For example, if I bought a climbing helmet in your outdoor shop, you could send me an offer for 15% off a climbing harness and a free harness fitting. Or you could invite me to a showing of a climbing movie, whether at your shop or another venue in town. Your primary goal should be to build a relationship with your customers and with that will come customer loyalty.
If you are still considering partnering with a deal site don’t forget the three key steps: 1) Assess your business need, 2) thoughtfully evaluate your partner options and 3) have a plan to build relationships to turn newly acquired customers into lifetime customers.
— Posted by Pam Spier, Consultant, Lenati
November 11th, 2011
The mobile/wireless ecosystem continues its rapid evolution with many exciting implications for business, culture and society at large. Last night’s Mobile SIG presented by TiE, brought together an informative and entertaining panel of experts to share their thoughts on strategies for growing successful businesses. Moderator Mark Donovan, SVP Mobile at comScore helped set the stage by sharing some statistics that are shaping the future of the mobile industry:
Rapid shift to Smart phones: In 2008, 10 of the top 10 best selling phones were clamshell models. In 2010, 6 of the top 10 selling phones are smart phones (Blackberry Curve is the #1 selling smart phone).
Bandwidth use and data plans growing: In the US 2009 43% of phones use 3G; 21% of all US users are on a data plan with 17% of those now owning smart phones.
Rapid growth in Media distribution via smart phones: Carrier’s report customer plans are split 30% Talk only; 30% Talk +SMS, 30% consuming Media with the last segment growing more than 20% in the last 12 months.
Mobile internet penetration: 67MM mobile users in the US surf the mobile internet
Donovan also observed that Smart phones/Super Phones are ushering in a transformative state to our society and culture at large. These new devices so closely mimic human capabilities and are quickly becoming the Eyes (Camera), Ears (Microphone), Mouth (Speaker), Nerves (Sensors, Accelerators) and Brain (Chips and Cloud) of our society at large.
How are revenues going to grow in the mobile marketplace? Several options and insights were shared by the panel of experts.
Lower barrier of entry enables entrepreneurs to enter the market quickly and at much lower cost. Darren Austin, Director Product Management for AOL Mobile, commented on this shift, but also cautioned that this has created a lot of noise on the market and shifted costs to other area of the business. Jeremy Korst, Sr. Director of Broadband products at T-Mobile agreed saying, “How does the consumer discover the apps and services that add most value? 7-figure development costs have now been replaced by 4 full time marketing personnel who need to push really hard to get a new product noticed by a target audience.”
What’s old is new again: Carriers are gateway to profit. Michael Coen, SVP Business Development for GoTV Networks, stated the three best ways to make money in mobile:
- Partner with the Carrier (they act as a filter and will promote your service).
- Be on as many storefronts as possible (GoTV is available through 30 different partners).
- Charge for content and programming. (Coen chided entrepreneurs who still advocate for free content then making it up in volume). Then stay relevant to your audience and add value to the user.
Dwight Krossa, EVP of Kiha Software, a Paul Allen start-up operating in stealth mode (as much as a Paul Allen start up can be stealth) agreed stating “Carriers are a path to success. As usage grows the business model most appealing to a carrier is adding more services.” He also cautioned however that carriers are under pressure to hold prices even as network usages increases. He expects user intolerance for higher pricing will create margin pressure for carriers and their partners.
Technology Advantages: Jeff Giard, Director of Mobile Services at Clearwire has no such constraint stating “Bandwidth is not a problem. In fact we are looking for apps and services that take up more bandwidth. For Clearwire increased bandwidth – more and faster- is a differentiator.” To give evidence of this advantage, Girard shared that smart phones through carriers on average transmit ~1.5GB per month while the average user on Clearwire transmits 7GB. Clearwire is making a significant bet on this advantage and has plans to add 10,000 new cell sites by 2012. Giard closed by emphatically stating, “We want to move bits.”
Scale Matters: Darren Austin also encouraged entrepreneurs to look across the ecosystem and leverage all the distribution points: carrier, direct to consumer and app stores. However, he cautioned “ plan to take time. It won’t happen overnight.”
Advertising Gold? In the near term the panel was not bullish on mobile’s ability to drive significant new revenue from advertising. Some factors: Mobil, unlike the web, is too fragmented and accurate campaign measurement is still a weak point.
Donovan from Comscore was the contrarian among the panelists and remains bullish on Advertising for mobile, but agreed it was a long term play. He cited these trends as indicators.
- 1st wave: Mobile companies have been the first wave of advertisers “to eat their own dog food” becoming the #1 advertisers on the platform.
- 2nd Wave: Fortune 100 are starting to come aboard via sponsorships.
- 3rd wave: Mobile Web and growth of advertising using mobile web to reach audience. Google is making big bets on mobile and their entire model presumes ad revenue.
Near term: No one is getting rich, but long term prospects are strong. Also Donovan predicts that “as margins get squeezed, Carriers will look to advertisers to augment their revenues.” [ BTW: It’s interesting to note that this perception has not changed in some time. Take a look at the comments captured by industry consultant Chetan Sharma in his blog post from a TiE Mobile SIG in 2007 ]
Location Based Services (LBS): Ability to manage privacy is a huge asset and an advantage of the Carriers. “Trust with the customer is key and drives tremendous value,” said Korst. It is also a fulcrum against Google and Social Networks who, through the 4pt type buried in EULAs, technically protect privacy, but in practice, their platforms allow users to expose themselves. Eg: PlesaseRobMe.com that aggregates social media feeds where users tell their “friends” that they are not at home and overlays this info to maps.
B2B is ripe for mobile: Focus on high value/high return. Krossa from Kiha cited the example of : Salesforce.com as showing the way on how to make money in B2B stating, “sure the app is “free” on the iPhone, but it is only valuable to you AFTER you pay the $749 annual subscription. Salesforce leverage their business model to extend the value of their platform to the mobile user creating even more demand.”
Mobile transactions via Carrier. Lots of infrastructure required to make a transaction process work seamlessly and it is lacking across most Carriers. Also, a near term concern for the Carriers in the US market is “bill shock”—customers are comfortable seeing a $99 monthly service bill , but once they start making multiple transactions through their mobile device and generate > $1,000 monthly bill, will they perhaps gets spooked into switching services? That said, electronic transactions are beginning to happen (mostly for for electronic and mobile services), but wholesale adoption is still a future state.
Where you do you think future riches in mobile will be mined? Please join the conversation with your comments below.
–article contributed by Lenati consultant Mark Ippolito
March 22nd, 2010
Now that the suspense has been lifted and we know the names of the all the winners of last night’s Academy Awards, it’s time to play Monday morning quarterback and ask the question: Did the Academy get it right? Evaluating performances and art criticism of any kind is an incredibly subjective endeavor. Therefore to bring a degree of science to the equation, we thought it would be interesting– both as a market research exercise as a well as a cultural gauntlet throw-down to the Academy members– to monitor Fccebook and the twittersphere and measure how consumers’ social media activity equates to the Academy Award winners.
Counting tweets:
Focusing our measurement efforts on the Best Picture category, our team of consultants used Twitter advance search to measure audience engagement for each of the nominees. Using keywords related to each of the ten nominees, we measured the number of tweets for two weeks leading up to the Oscars (Feb 16th – March 3rd). The ten best picture nominees generated more than 100,000 tweets during the period and ranked as follows:
Given these audience metrics, “Avatar“, followed by “Up in the Air” and “The Hurt Locker” were generating the most tweets during the build up to Sunday night with “The Blind Side” out of the medals for best picture, but still ranking a respectable 4th.
During the course of our measurement, it became clear that pre-Oscar buzz was definitely a factor in generating audience interest, if not generating more votes for those pictures that did not ultimately win awards.
Tweet Trend for Best Picture Nominees 2/16 - 3/2
Both Hurt Locker and actress Carrie Mulligan saw their twitter stars rise the days following their wins at the BAFTA. Actress Gabby Sidibe and director Lee Daniels also benefited from their recognition at NAACP Awards. With the juggernaut of special effects delivered by Avatar, Peter Jackson’s “District 9” was doomed to be overshadowed by the Academy, but rated strong in fan interest on twitter throughout the period and appears to be headed for strong futures DVD sales/rentals and downloads.
FaceBook Movie Fans
Oscar nominations and awards have a big impact on the financial success of a movie. It’s no wonder that the academy has expanded the pool of nominated movies to 10 films and why movie producers turn up the advertising volume in advance of the Oscars. So which production company had the most success with the influential Facebook crowd? Was there any influence made by the social graph? To find out we followed the registration volume of Facebook members to the Fan pages of the films nominated for best picture for two weeks in advance of the Oscars and gained some interesting insights.
Facebook Fan Base
First it was clear that like total box office receipts, Avatar is clearly in a league of its own. Avatar fan page registrations are over 400% greater than its nearest competitor with over 1.5 million members. This broad endorsement on Face book is likely the result of demographics, 50 % of Facebook members are less than 34 years of age, as well as the simple fact that it was a high quality visual film that appealed to broad based sentiments.
Increase in FB fanbase in 2 weeks preceding Oscars
However, evaluating the change in fan registration data over the two week period in advance of the Oscars revealed some insights into the building momentum for “the Hurt Locker”. In the two weeks prior to the Oscars the percentage increase in fan base registration for the Hurt Locker increased 28%. This growth was 200% more than any other fan page for a other nominated film.
Social Media Gold?
There are many challenges in using social network fan base data as an indicator of relative success at the Oscars. Key issues include the subject matter, demographics of the audience, and release date of the film. As a follow-up to this post we will complement our data pool with insights into web site traffic data and the insights they provide into tracking box office receipts and revenues.
While I’m sure James Cameron was chagrined to be overlooked by the Academy for not being selected for best director or best picture accolades, if social media buzz is any indication, Avatar will continue to deliver solid gold at the box office.
We’ll see how his statue gripping competitors fare in the weeks ahead.
Lenati consultants Mark Ippolito and Frank Ramirez contributed to this post.
March 8th, 2010
With all of the hype around mobile applications and the success of the iPhone Appstore, we’ve had a number of our clients ask us how they should approach mobility. What’s encouraging to me is that they know they need to engage current and potential customers when on-the-go, but the challenge is, they aren’t sure how. Should they build a mobile optimized website, a mobile application or both? I have my ideas that I’ll outline below, but I’d also like to hear from you. Please comment on this with your own theories and experiences.
In my opinion, the first step before you do anything is to set your mobility strategy and determine exactly what experiences you want your mobile customers to have and how that would differ from a typical web experience. For a number of reasons, they shouldn’t be exactly the same. I know the actions I take and the information I seek is very different when I’m mobile than when I’m sitting at a PC. Here’s the recipe I’d follow to set my mobility strategy:
- What would be the common scenarios for why a customer would come to my mobile web-site or use my mobile application? (e.g. if I’m a retail business I may want a store locator)
- What value can I add to my customers experience leveraging the mobile ecosystem (e.g. can I offer them something unique based on knowing their location?)
- Once I have their mobile attention how would I integrate their experience back into my PC and offline customer experience? For example if my goal is to introduce them to new products they may not want to purchase immediately via phone. How would I ”hand-off” that information for further use by sales and marketing?
Once you have your strategy set, it should be fairly easy to determine what you want to do. I believe that you always need a mobile optimized web-site. The standard web experience is getting fatter and fatter as video, flash, etc. are added so you’ll need to come up with a relevant skinnied down version that loads quickly (given current network constraints). Here are a few pros and cons.
Pro
- A mobile optimized site will likely reach a broader audience then a mobile application alone
- It doesn’t require a customer to download a new version everytime you update the site.
- It can be cheaper to develop as you don’t need to port it across various OEM operatin systems (e.g. Apple, Android, MSFT, PalmPre)
- By keeping the experience “in-house” you can gather a variety of metrics and determine ROI on your efforts.
However, there are some draw backs to keep in mind.
Cons
- It’s difficult and costly to maintain an experience that is optimized across the plethora of devices and operating systems in the market.
- Don’t try to please everyone – the experience on a small, candybar phone is going to be poor regardless of the optimization so I’d shoot to optimize for smartphones.
Check out how Toyota and Lexus are using mobile advertisments to drive potential customers to a mobile optimized experience. Kudos to this one. It’s valuable, it’s unique and it’s tied into their other sales and marketing efforts
http://www.lexus.com/lexus/jsp/pub/mobile/models/HSh/hello_someday.jsp
They narrowed down your experience to really 2 things you made do when mobile. 1) Gather more information about a product and 2) find a dealer near you. Click deeper into the experience and I think you’ll agree that this is really well executed
So why would I build an application then?
Primarily, I think an application should be a supplemental effort to your mobility strategy that allows you do something valuable for your customers that you can’t easily do on your site. It should not just be a repeat of your web experience. CNN’s mobility site and their iPhone application are virtually identical so I question why I’d use one over the other. They must have thought the same as I just discoved the iPhone app is no where to be found (only CNN Money).
Here are a few thoughts on the pros and cons of building an application
Pros
- Relatively inexpensive to build and maintain given only one OS is involved
- The application can leverage features of the mobile device including the camera, GPS and voice. Try that with your website
- The applications run on the device and still work even if network connectivity is an issue (asuming the app is self contained)
Cons
- You have a smaller addressable audience for any application. Even if you target the iPhone platform which has millions of users, you likely likely get lost in the shuffle of 65,000+ other applications
- Applications need to be updated which can degrade your customers experience
- Should you decide to expand you audience, it can be very costly to port an application to other platforms.
- You can’t get any solid metrics on application usage (at least to my knowledge)
A company that has done an incredibly good job with their iPhone Application is Amazon’s Store App.
http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000291661
Not only does it let you shop from your phone, but it leverages the iPhone to enhance your experience. You can take a picture of any product and send it to them. Within a minute they will send you back similar sample products for sale in their store and let you purchase them on the spot. Very cool!
So I’m curious what you think? Do you need a mobile optimized site, a mobile application, both or neither. Please comment with your thoughts.
September 24th, 2009
