Ex3 Café

Starbucks Card Mobile. Can I Throw Away My Plastic Card Yet?

Not quite yet.  I'll tell you why a little further down in the post.

Starbucks recently rolled out its Starbucks Card Mobile App to 6,800 U.S. company-operated Starbucks and all US Target stores.  This new app enables iPhone and Blackberry users to pay for purchases via their phone, check and reload their card balance as well as check their reward points.  Here's a short video on Starbucks website site that describes how the app works: 

The official app only runs on the iPhone and Blackberry platforms, but I found a couple of unofficial apps on the Android Marketplace. I tried one of the apps on my Android phone and it worked as expected: generate bar code on phone screen, have Starbucks cashier scan bar code with bar code reader, enjoy coffee.  I was especially impressed with the real time balance update (i.e. the POS transaction was updated on my phone immediately after the cashier scanned the bar code).

I was so excited with the new app I literally threw away the Starbucks card in my wallet.  In addition to this being an expression of my excitement, one could also also call this a symbolic gesture to welcome in the long awaited, full scale launch of mobile/POS payments in the US.  Symbolic or not, throwing away the physical card turned out to be a big mistake.

I realized this mistake when I accidentally deleted my Starbucks card number from my Android mobile app.  This, at fist, didn't seem to be a big deal.  Just re-enter the card number into the mobile app and we're back in business.  The problem was the card number could only be retrieved from the physical card (remember... the one I enthusiastically threw away).  

I tried logging into my Starbucks.com account to get my card number, but for security reasons the card number was only partially displayed.  One would think, if my Starbucks mobile app is also associated with my Starbucks.com account and my Starbucks.com account is linked to my physical Starbucks card that my Starbucks card info. would be retained in my Starbucks mobile app.  This was not the case.

In order to get my Starbucks card number, I had to log into my Starbucks.com account, report the card I threw away as lost or stolen, transfer the balance from my old card to the new replacement card and wait for the new card to arrive in the mail. Once the new card arrived in the mail, I had to activate the new card and finally enter the new card info. into my Starbucks mobile app.

In short, I love the convenience and functionality of the new Starbucks mobile app.  I'll wait to throw away my physical card though, until all of the kinks have been ironed out.

P.S.
In Starbucks defense, I'm not sure if the official iPhone or Blackberry Starbucks Card Mobile apps require this many hoops to jump through if the card info. is deleted from either of the apps.  If not, then it's probably safe to say that most of the kinks have been ironed out for the officially rolled out versions of the app.

Google's Near Field Communication (NFC) Technology

The following is an e-mail response I sent to a partner when discussing/comparing Google's recently announced Near Field Communication capability to other mobile direct response methods.  The "droplet", described below, is printed card stock with NFC chip technology embedded into it.

The droplet has a tiny "NFC" chip embedded in it which transmits a low power, encoded signal.   This signal is received/decoded by the mobile phone which has an NFC chip embedded in it as well.  

This is similar to a QR code where a URL, phone number or other data can be encoded/stored in the QR code image and received/decoded by a QR code enabled phone.  The main difference between QR codes and NFC is how the encoded data is "received" by each method.  With the QR code, the encoded data is received by scanning the QR code via the mobile phone camera.  The QR code image is then decoded via the QR code app. installed on the mobile phone.  With the NFC method, the encoded data (stored in the droplet) is received by the NFC chip/receiver and then decoded on the phone.

The NFC method gets us closer to what I coin as "Effortless Mobile Capture and Response" or EMCR, as this method only requires the mobile phone user to "wave" the phone a couple of inches away from the NFC transmitter to receive the encoded message.  With the QR code method, the user has to line up (correctly) and scan the QR code image to receive the encoded message.  

It makes logical sense that the easier it is to respond to a marketing message, the higher the response rate will be.  The down side of the NFC method is the mobile phone has to have an NFC chip in it to work.  With the QR code method, the mobile phone user simply downloads/installs a free app. to capture and decode the encoded message.  

SMS is even more universal, as it only requires that the mobile phone have SMS/text capabilities (which every mobile phone sold now has with exception to the Japanese market).

In short, SMS is most universal to-date, but it also takes the most amount of effort to respond to a marketing message.  Conversely, NFC is the least universal to-date, but it's also the least amount of effort to respond to a marketing message.  It will be interesting to see if NFC takes off beyond the Nexus S.  Something to keep our eyes on.

- mOlson

P.S.

I think I just wrote my next blog post. :-)

It will indeed be very interesting to see where this goes.  Rumors that the new iPhone 5 will have NFC increases the likelihood of success.

An RFID Chip in Every Cell Phone by 2010?

   

This recent blog post from The RFID Weblog caught my eye.  Given that we are in the middle of 2009 and (to the best of my knowledge) none of the top cell phone manufactures currently have RFID chips embedded in their phones, the pace better pick up if we want to reach this prediction by next year.  Predictions aside though, I wanted to throw out a few marketing use cases that could be enabled with this marriage of cell phone and RFID.

I'm Here, Start Spoiling Me Now

In this use case, a customer could associate their RFID enabled cell phone with their loyalty/rewards account for a particular merchant or service business.  Then, when the customer enters a participating location (and their cell phone is picked up by an RFID reader at the entrance) a personal greeter/assistant could be alerted to greet the customer upon their arrival.  A good example of this use case could be a "high roller" at a Casino.  Upon entering the casino location, the high roller could be greeted by a personal assistant who could pro-actively attend to their every need.  "Hi Mr. High Roller!  Here's your favorite cigar and drink.  Your table is already for you."

Tell Me More...

In this use case, a customer could hold their cell phone next to a product (with an RFID tag on it) to get additional information about the product.  The information could include detailed product information that's not on the product label or surrounding signage.  Other information might include:

• Complementary products.  For example, cheeses in a store that go with a selected bottle of wine.
• Nutritional information for a food or beverage
• Product ratings.  For example crash test ratings for a particular car.
• Any related discounts, rebates or coupons associated with the selected product.

Please Don't Make Me Dig For My Rewards Card

This is a common occurrence at any check out line where a reward/loyalty card is "swiped."  Here the customer has to find their rewards card in their wallet or purse.  If they can't find their card, they instead need to enter their phone number or other identifying information into a keypad to pull up their loyalty/rewards account.  This can be a bit of a hassle for the customer.  If the customer has a cell phone with embedded RFID associated with their rewards account though, their rewards account can automatically be pulled up when they enter into the check out area.  This saves the customer time and increases the likelihood that the rewards card will be associated with the customer's transaction.

These are just a few use cases, at the top of my mind, that could be achieved by embedding RFID chips into cell phones.

I'm not sure if every new cell phone will have an RFID chip in it a year from now.  What I am certain of is the marketing use cases that will be enabled by this cell phone/RFID integration will be game changing.

Service-to-Sales Sounds Great But...

It makes so much sense when you think about it.  The customer is already engaged in a conversation with your customer service department, why the heck wouldn't you seize the opportunity to cross-sell the customer a complementary product ("you want a new bank account to go with that brokerage account?") or up-sell the customer into the premium level product or service ("how about 10,000 additional text messages for only $5.00 more per month?")?  The devil is in the details though so make sure you come prepared when you pitch this "no-brainer" idea to the Customer Service department.  That said, the following are a few key questions and concerns you will likely be confronted with when you finally make your pitch.

This Messes Up Our Metrics

Because customer service reps are evaluated mostly on call stats (i.e. number of calls answered, average talk time, after call wrap up time, etc.) adding a sales pitch to every inbound call will most certainly effect all of these key metrics.  To address this issue, you should be prepared with estimated increases (or decreases) for each metric.  Here's a few examples:

• Number of calls answered per shift will decrease by approximately 20 calls
• Average talk time will increase by approximately 30 seconds
• After call wrap up time will increase by 1 minute

Of course, to offset the negative impact your proposal will likely have on the key metrics above, you will want to have the estimated increase in sales in your back pocket.

What's In It For Me?

This will most certainly be in the minds of the customer service reps and line managers.  To address this, you should have an incentive program in your proposal, otherwise there will be little motivation for the customer service reps to add a sales pitch to each call.

I know How to Fix Problems, Not Sell

Because most customer service reps are not sales people, you will need to provide a service-to-sales training course.  The course should focus on:

• Identifying cross-sell or up-sell opportunities
• Training the customer service rep how to transition from the customer service portion of the call to the sales portion of the call in a "soft" and unobtrusive manner (obviously stressing that the customer service portion of the call should come first).
• Training the customer service rep how to enter orders into the sales order system and/or enter leads into the CRM system

These are just a few key topics to cover in the training course.  The important thing to know here is service-to-sales training is essential for your program to be successful.  As such, you should have this covered in your proposal.

Having a well thought out and realistic service-to-sales proposal and implementation plan will greatly assist you in getting your proposal accepted as well as having a successful program launch.  Without this, your career advancing service-to-sales idea will likely turn out to be a service-to-headache disaster.

Campaign Prioritization - The Good, The Bad and The Ugly

So, you spent the last two years building a corporate wide, state-of-the-art campaign management system and you convinced all of the different marketing groups in your company to ditch their individual e-mail vendors and go through your centralized system.  The benefits of your campaign centralization pitch were certainly compelling:

• A history of all outbound customer communications can be stored, referenced and shared from a single location
• Centralizing campaign management operations for all product groups can create economies of scale for campaign design, execution and reporting
• Legal and corporate branding guidelines can more easily be adhered to
• Data for all campaigns can more easily be pulled from a centralized data repository thus reducing data errors and inconsistencies
• Recency and frequency of customer communications can better be controlled (via campaign prioritization filtering) thus reducing the chance of over communicating to customers and driving up optouts 

The last benefit often doesn't play out as well in reality as it does on a PowerPoint slide though, as internal clients can be disturbed when list counts are lower than expected due to prioritization filters being applied during the list selection process.  While this prioritization filtering is essential at a global/company level, to reduce the chance of over communicating to customers, tell this to a marketing program manager that still believes list quantity is better than list quality. 

To better deal with the inevitable backlash that will ensue when program managers see lower list counts than expected, I would recommend that you be prepared to respond with the following:

• The logic employed in the prioritization filter.  This helps program managers to better understand why certain people are suppressed from the final list.  This also helps to show that no favoritism is taking place when the prioritization filter is applied
• The danger of over communicating to customers.  This can drive up optout rates, thus reducing the number of "marketable" customers to market to in the future
• The concept of list quality versus list quantity.  If you have hard numbers available to demonstrate this benefit, this is even better

And if all else fails, tell the program manager to go complain to the CMO. :-)

Note to IBM: Please Make Data Mining Work for Mainstream Marketing This Time

With IBM's recent press release announcing a new consulting organization dedicated to advanced business analytics, I thought to myself, "I sure hope this new organization helps to incorporate advanced analytics/data mining into mainstream marketing this time around."  Because up to now, other than a few BIG exceptions (i.e. Amazon.com), the promise of integrating data analytics and marketing (in a scalable and repeatable manner) has yet to be realized.  It's quite frustrating, as data mining technologies have been around for a number of years and incorporating data mining into marketing seems like such a natural fit.  For example, customer exhibits pattern of behavior for product cross-sell opportunity so complementary product offering is dynamically presented to customer and add on sale is made.  Done.  End of story.  Not so fast.  Here's what's throwing a wrench into this seemingly straight forward scenario:

• The PhD's in machine learning and mathematics (in the Reporting and Analytics Division) and the MBA's (in Marketing) are wired completely different.  Here, the PhD's are concerned about accuracy (to the n'th degree), methodology, sample size...etc. and the marketers are concerned about "just getting the stuff out the door".
• For direct marketing, most marketers are still obsessed with list quantity versus list quality.  "You mean my list count is only 150,000, I thought it was going to be more like 2,000,000?"  In this case, if a list (generated via data mining) has a smaller count than expected, the marketer may request that the list be pulled using more traditional data selection/segmentation methods to increase the list count (completely missing the point).
• The raw data (to be mined) is never right.  So the data mining folks spend most of their time "getting the data ready to mine" versus actually mining the data.
• Very few companies have figured out how to integrate data mining and marketing execution efficiently (or at all).  As such, a lot of interesting discoveries are made, via data mining/analytics, but no direct action is taken to help generate additional sales from these discoveries.  For example, through mining its sales transaction data, an on-line retailer may have discovered that customers who purchase products in category A, are likely to purchase products from category B as well.  Unless there's a process/technology in place to alert the customer about products in category B (i.e. automated e-mail, website message...etc.) this discovery, while perhaps interesting, has limited or no monetary value.

So, with the above realities in mind, my advice to IBM (if the company wants to be successful at selling data analytics products and services to marketers) would be the following:

• Figure out a way to bridge the communication barrier between the data modelers/analysts and the marketers.
• Set expectations for senior management on the process of data mining.  Many senior executives believe the process involved with advanced data analysis and modeling is likened to the Ronco "Set It and Forget It" Rotisserie Oven.  Here the assumption is that a magical software tool is turned loose against a sea of data and (miraculously) revenue generating discoveries pop out the back end with limited or no human intervention.  Obviously there is a lot more to data analytics/modeling than this, so senior management's expectations need to be managed accordingly.
• Make sure the raw data that's being analyzed/mined is complete, accurate and structured correctly on an on-going basis.  Otherwise you will have highly skilled data modelers spending most of their time doing manual, mundane data "grunt work" instead of the work they are hired (and paid handsomely) to do.
• Educate marketers on the value of data quality versus data quantity.  Here various tests could be set up to compare the marketing ROI between segments derived via data analytics and segments derived using more traditional data selection methods. 
  NOTE:  I find that numbers speak much louder than words when it comes to proposing new marketing techniques and technologies to marketers.
• Don't focus solely on analytics and discovery.  Make sure you also provide the customer with a scalable and repeatable method to "take action" when key, revenue generating discoveries are made.  In other words, help the customer fill the gap between marketing discovery and marketing execution.

If IBM is mindful of the above recommendations, I believe this newly formed consulting organization will be highly successful at selling data analytics products and services to marketers.

P.S.  Here's an interesting video I found that helps answer the question "what is data mining?":

QR Codes Hit Prime Time TV!

Check out this episode of CSI: NY that features QR codes:

Good PR for the folks lobbying to have QR codes become the standard for mobile direct response marketing.

More Innovative Ways to Capture Marketing Responses On-the-Go

After writing my last blog post on leveraging the cell phone and SMS text messaging to respond to off-line marketing campaigns, I discovered some other promising mobile phone applications that could perform this task as well.

StarStar® Service from Zoove

Developed by a company named Zoove, this service leverages the actual phone interface (versus say the SMS text interface) on a cell phone to capture customer responses.  Here the end-user simply dials an advertiser’s unique StarStar code—a series of numbers that follow the prefixed “**”—on their mobile phone keypad.  For example, the consumer dials “**12345” and presses the SEND key. 

In a nut shell, Zoove maintains that its solution is much more intuitive and user friendly than text messaging (leveraging mobile phone short codes) to capture marketing responses on-the-go.  This benefit sheet, from Zoove's website, describes the benefits of StarStar service over SMS texting in more detail.

Unfortunately, I was hoping to provide a video demonstration of the StarStar service in action, but I wasn't able to find anything on the Internet.

QR Codes

Already used widely in Japan, QR codes (or 2-D bar codes) are captured as an image, via a cell phone camera, and interpreted by a QR code reader application installed on the cell phone.  Here's a commercial from NTT DoCoMo (Japan's leading mobile phone carrier) that showcases how QR codes are leveraged in a retail advertising.

I experimented with QR codes on my cell phone (a Blackberry Curve) by installing a QR code reader from BeeTagg and reading QR codes I generated from an on-line QR code generator.  At first, the process of lining up my cell phone correctly to the QR code, taking the picture and generating the results was a bit cumbersome (and clunky on my cell phone), but after a few tries, I got pretty good at it.

Here's an interesting article in Business Week on Why QR Codes Could Help Save Print Advertising.

RFID

Mostly thought of for inventory tracking, RFID (radio frequency identification) technology is also being used to bridge the gap between traditional print and on-line media.  In fact, AMUSEMENT Magazine (in France) is claiming to be the first magazine to offer content linked both in print and online by embedding an RFID chip in one of its magazine subscriptions.  In this case, as soon the reader touches the chip to an RFID scanner, a request is sent to a remote server which gets the reader connected to the related online content.  More can be read about AMUSEMENT Magazine's RFID enabled article in this blog post from ForeverGeek.

The technology for all of the above solutions is here now.  The question though, is which technology will become the standard for mobile direct response marketing?  Heck, with all the new mobile phone hardware and applications hitting the market today, the answer may yet to be developed.  Whatever the solution turns out to be though, the potential for mobile direct response marketing is enormous and mass application and user adoption (I believe) is right around the corner.

The Holy Grail for Capturing Responses From (Off-Line) Marketing Campaigns is Likely in Your Hand

If you read my last blog post on digital signage, I believe the holy grail for capturing responses from off-line or "digital out of home" (DOOH) marketing campaigns and promotions is the cell/smart phone.  My belief was further confirmed when I was at the movie theater recently and I saw something, in one of the beverage vending machines, that caught my eye.  In the machine, I noticed a message on each Coke bottle that read "text code under cap to 2653."  This piqued my interest because I realized that this was a real life example of using the cell phone to respond to an off-line marketing offer.  It didn't pique my interest enough though to pay $5.00 for for the Coke!  So I waited until I got home and purchased the Coke from my local store.  The video below shows what happened next:

NOTE:  To learn more about the "short codes" I mentioned in the above video, check out this article in Mobile Marketer.

In short, the cell phone (or more broadly, mobile marketing) is the ideal platform to bridge the gap between off-line and on-line marketing.  I believe this is the ideal platform because:

• Virtually everyone has a cell phone
• A cell phone is portable
• Almost all newer cell phones have text messaging capabilities and text messaging is on the rise (and not just for the younger generation)
• The newest cell phones all have open platforms for new application development
• Cell phones facilitate networked, bi-directional communication (voice and data)

Other prominent companies (or popular TV shows) that have leveraged the mobile platform include:

• Dominos Pizza: Mobile coupons
• Starbucks: Store locator, "text your zip code to..."
• American Idol: Vote for your favorite contestant

This article from e-marketer further confirms my believe that mobile marketing is on the rise.  And to see the power of mobile marketing try texting "Ex3solutions" TO: "368266".

Demo of Cisco's Digital Signage Solutions - WOW!

In my last blog post on digital signage, I mentioned that I was going to The Digital Media Systems Demo Center, at Cisco Systems, to get a first hand look at Cisco's digital signage solutions.  Well, I went to the demo center last week and was not disappointed.  The demo started in one of Cisco's TelePresence rooms.  Cisco's TelePresence solutions are developed in the same product division that the digital signage solutions are developed in.  I'll leave the details and marketing benefits of this part of the demo to another blog article though, as I already have way too much to say about digital signage.

The next part of the demo focused on Cisco's digital signage solutions.  Here, the demonstrator walked through a number industry specific applications showcasing digital signage solutions in financial services, retail, health care, government, entertainment, higher education and safety and

security industries.  We spoke at length about marketing specific applications for digital signage in the retail industry.  Some of these applications included:

• Displaying brand messaging next to products grouped together by brand (i.e. showing video clip of famous person using or talking about a particular product or brand)
• Displaying targeted, dynamic advertisements associated with a specific product brand and/or product category
• Displaying information about a specific product by simply "waving" the product in front of the video screen
• Displaying complementary product recommendations.  For example, a customer could wave a dress shirt in front of a monitor and the monitor would dynamically display an assortment of ties (in stock of course) that go with the shirt.  This would be the modern version of children's Garanimals outfits with the mix-and-match tags!
• Generate dynamic, in-store coupons, for complementary products, that are redeemable at checkout

I could go on-and-on here, but I think you get the general idea.

More broadly, it would be interesting to see the ROI analysis of replacing in-store print ads and promotions with digital signage.  Just think of the potential savings that could be realized by eliminating printing and shipping costs associated with print ads (not to mention the "green" benefits of eliminating shipping and paper usage).  And how about personalization?  Try getting an estimate from your printer to create a personalized print ad campaign deployed nationwide for 10's, 100's or even 1,000's of stores.  The quote would likely be astronomical!  And, oh, what if the printer used the wrong logo or put the incorrect discount percent on the ads?  Ouch!  This would require reprinting and reshipping all of the ads.  Even if the printer absorbed the entire cost for the mistake, you would likely incur a significant loss in potential revenue due to the error.  The key takeaway here is digital signage should allow you to more easily and quickly change or update in-store signage, thus eliminating the time and cost for printing and shipping.  The other added benefit here is marketing content can be more timely, personalized and relevant at the store and/or individual customer level.

One potential hurdle that could impact immediate and mass adoption of digital signage (from a purely direct marketing standpoint) is tracking, as it looks like the primary method to gauge marketing ROI is indirect tracking.  This method of tracking is becoming less desirable, as more and more CMO's and upper level management are demanding more direct/tangible methods to gauge marketing ROI versus indirect methods.  Here's an excerpt from a blog post in the Digital Signage blog that further describes this challenge:

ROI Calculation: This is perhaps the most difficult, but important aspect of any advertising campaign. Internet campaigns through organic search as well as PPC have the ability of giving very precise ROI numbers, an aspect of internet marketing which advertisers absolutely love. Not only do they love it, but now they demand it, which is why some companies have searched for unique ways to calculate digital signage ROI. This still remains difficult, however. Impressions don’t talk, cash does. And, until the signage industry is able to put more precise numbers on effectiveness, they will be handicapped by incumbent advertising mediums.

This potential hurdle will likely become a moot point though, as most of us carry a device that has great potential of becoming the holy grail for redeeming dynamic offers and tracking marketing ROI from digital signs and other similar media channels... OUR CELL PHONES!  I won't go into too much detail here (as I will save this for a future blog posting) but suffice-it-to-say, with the features & functionality that are now standard in most cell phones and the emerging technologies that leverage these features, our cell phones could soon be a marketers device of choice for capturing and redeeming offers and tracking marketing effectiveness for digital signage and similar media channels.

As a final note, I wanted to thank the good folks at Cisco Systems for taking the time out of their day to show me all of the awesome products from the DMS division.  I was truly "wowed" and inspired with what I saw and look forward to monitoring the progress of these emerging marketing solutions as they continue their debut into the marketplace.