Mobile Customer Engagement

‘Mobile customer engagement‘ has been a long time a comin’.

So you could be forgiven for deciding to put it on the back burner for another year and not invest. But this time you might be wrong about your timing. Both Nokia and Microsoft are now MBA case studies on how to sleep through a rainstorm. It would be just plain silly to let that happen to your own brand.

To help you avoid that, I’ve gathered together a smattering of market data that paints a picture of mobile’s current state of rude health as amble proof that 2011 is the year to get busy on your mobile customer engagement strategy.

Did You Know…?

• 70% of the world has mobile/cell phones. Given a human universe of 6.9billion, that means 4,830,000 points of mobile/cell access
• 30% of those with mobiles/cells currently access the web on their phones
• By 2014, 6.7 billion devices will be connected to the internet
• That’s compared to 11 million tablets sold in 2010. Predictions for 2011 growth in this still small mobile segment range from 35-70m
• Steve Jobs talks of a post PC world. Almost all research firms have lowered their predicted estimates for pcs and laptops sold (down to 350m for 2011) as a direct result of tablets
• The number of global mobile search devices is predicted to grow to 1.8 billion by 2014 – outstripping the current PC and Mac internet population of 1.4 billion
• Just to back up that last stat, smartphones are now officially more popular than PC’s. 101 million smartphones were bought worldwide vs. 92 million PC’s in the fourth quarter of 2010
• Within five years there will be more mobile than traditional internet users. See this great infographic for global patterns of use

Ridiculously, mobile phone ownership in the UK has long been quoted at more than 100%, whatever that means. But test that against your own experience. If you have young people in your life, you already know just how early they are becoming mobile enabled.

My own family testing says that an iphone is expected on the thirteen birthday in terms of peer pressure at school. At the other end of the age spectrum, only the oldest of generations can now be classified as having missed the mobile boat.

So that’s a lot of people, from all walks of life who are mobile dependents!

Rise Of The Smartphones

But apart from the question of ‘Who Has One’, these days it is just as important to think about ‘What Is It’ when referring to a mobile/cell phone. Smartphones continue to stretch our assumptions. For instance, at this year’s gathering of the mobile industry in Barcelona, a ‘state of the art’ smartphone specification looked like this.

Dual core processing
3D acceleration
Full HD video recording (1080p)
8mp camera.

These kind of specs are capable of generating real OMGs: apart from the fact of course that real techies would never talk like that! But it shows why this kind of horsepower promises to turbo charge an ‘apps’ market due to rise from 10 billion downloads in 2010 to an estimated 25 million this year. The enormous appetite for tightly focussed, easy to use software and its ability to showcase your brand/organisation is another aspect of your mobile strategy that needs some proper research and thought.

By the way, if you see yourself as not in the least techie, who never got off looking under anyone’s bonnet, let me summarise that previous chunk of technical gobbledygook for you.

Smartphones are now good enough to work as expected. Horrah! And in many cases can give a real ‘Wow’ in the process. For instance I’m still blown away by the quality of HD video that my iphone is capable of shooting.

Onward and upwards with the statistics.

• Such is their ‘sizzle’ factor, 30% of all mobiles/cells in the UK are now smartphones. In this respect, we are 10% ahead of the rest of Europe

IDC’s latest Worldwide Quarterly Mobile Phone Tracker provides the global picture for 2011.

• The worldwide smartphone market is expected to grow 49.2% in 2011 as more consumers and enterprise users turn in their feature phones for smartphones with more advanced features
• Smartphone vendors will ship more than 450 million smartphones in 2011 compared to the 303.4 million units shipped in 2010
• The smartphone market will grow more than four times faster than the overall mobile phone market

So given all that frenzied purchasing, it’s no surprise to learn that the global growth in smartphones with their transformative functionality is fuelling other markets. Juniper Research forecasts that  ‘Mobile Entertainment Service Revenues’ are due to reach $54 billion by 2015. Just ponder the size of that figure for a moment. In fact, it’s worth reading the research just to see how they figure this out!

In terms of which vendors’ market shares are on the rise and fall, the Apple iphone success hardly needs retelling. But remember, this is no longer a one horse race. Google’s Android OS has become the discerning consumers’ alternative. Promoted by all the other hardware manufacturers wanting to take back a piece of Apple’s pie. In pure sales, it’s already ahead and some are predicting it will grab a 45% market share within the next five years. What that means can be seen in Gartner’s 2015 leaderboard can be found here.

That said, Apple is allegedly fighting back with a cheaper version of their iconic iphone series in order to maintain share as main stream adoption of the smartphone standard plays out over the next 24-36 months.

Bringing up the rear are two fallen giants in the mobile space. Both Nokia and Microsoft are being forced to club together and run fast to catch up since the boat left before they even noticed.

So in all likelyhood, you will need to plan for three platforms as part of your technical assumptions for planning your mobile customer engagement.

What Does All This Tell Us?

It tells us we are looking at a smartphone dominated, near term future, poised to deliver new forms of customer engagement if correctly designed and supported. Apparently there are three times as many smartphones being activated every minute around the world than there are babies being born!

“Mass-marketing campaigns have a 2 percent response rate and are on the decline, whereas by 2015, digital strategies, such as social and mobile marketing, will influence at least 80% of consumers’ discretionary spending,”

It also tells us about how customer engagement is changing from a one way comms blast to something more akin to a dialogue. This is well summarised by a recent comment from Adam Sarner, research director at Gartner.

But that is not to say brands are capable of leveraging that capability. A spring 2011 Harris Interactive poll generated the following headline,

10 million online consumers in the UK made a transaction using a mobile device in the last year but, in what should be a convenient and simple way to shop, 83% of these experienced problems when conducting such mobile transaction

The survey went on to show a healthy growth in UK mobile engagement.

• 23% of online UK consumers conducted a mobile transaction last year
• 75% see no reason why a mobile transaction can’t be completed first time
• 66% would be less likely to buy from a brand following a poor mobile experience

Dig a little deeper and leading UK retail brands are clearly making money from this new customer engagement channel.

• Within the first 3 months after launch, the Marks & Spencer (UK) mobile site received over 1.2 million visitors, with more than 10 million combined page views. Proving the willingness of consumers to make purchases from their mobile phones, the mobile site experienced over 13,000 orders in just 90 days
• ASOS’s (UK) mobile revenues topped £1m in the UK during December, double the etailer’s expectations
• John Lewis (UK) reported in January 2011 that it will launch transactional mobile apps after its mobile site saw a 50% increase in mobile traffic since launch in October. Overall online traffic to John Lewis in the last quarter rose significantly, roughly 30-40% year on year, but mobile traffic has risen almost 50%, according to Jonathan Brown, John Lewis’s head of online selling. “Conversion from visitor to sales is now 20% since the launch of the mobile site,” he said.

One Big Problem Though

There is however one real fly in the ointment. Mobile/cell phones and especially smartphones are not very good at being phones! In other words, despite operator claims to the contrary, all customer surveys show broad discontent with real world levels of consistent connectivity. Relative to landline quality of service, this aspect still sucks and remains a major dent in the whole mobile value proposition.

Why is this? I’m sure the astronomical cost of UK 3G licenses (£22bn) produced a ‘behind closed doors’ business case that resulted in selective investment for new infrastructure. The official reason always spun is that our hunger for online access is stressing the poor old 3G network like never before. No doubt also true.

Anyway the good news is that the UK government is at it again. Only this time it is to going to try reducing the national debt by flogging off the old analogue frequencies as ‘Telly Goes Digital’ to make room for ‘guess what happens after 3G’. You guessed it. Wimax is being popularised as 4G.

Depending on who you believe, this will happen sometime over the next few years and promises faster online speeds and more consistent coverage. Great for all forms of online experience. Meanwhile UK mobile providers will now be able to use their 2G spectrum allowance for 3G connectivity, following another ruling from Ofcom. So that should also see fewer black spots.

The Mobile UK Consumer

But while we wait for all that, the game of mobile customer engagement is already well under way. We are an adventurous lot according to the latest annual Ofcom report on international communication habits. Our migration from the plumbed in version of online access i.e. our desktops is well advanced here in the UK.

• In most countries represented in the Ofcom report, the desktop PC is still the most popular device to get online at home, followed by the laptop. But in the UK, the opposite is true with 69% of internet users using laptops to log on at home

 

• Topping that, 29% of us have continued this grand migration and use our mobile/cell for online access at home. In fact we find it hard to stop staring at that small but evidently perfectly formed screen. One in four Brits watch online telly every week, ignoring the traditional plumbed in big screen experience

And of course everything is going ‘social’ in the process. Yes, there even a category called Social TV for those that love their TV viewing so much they want to share it with their social graph.

• It’s no surprise then that UK folk use their mobiles/cells for social networking more than any other Eurozone country. Or that the UK is the second biggest text messaging nation in Europe after Ireland, with 140 messages per person per month

My ‘almost final’ social stat should be interesting for those developing their social customer service strategies.

• On a global basis, 35% of Twitter’s active users access the service through their mobile device.

Oh and by the way, if you need final proof of our online comfort zone, UK consumers’ online purchasing behaviour is to do it ‘More Often’ and with a ‘Higher Average Value’ than any other territory in the Ofcom benchmark. No doubt that will then spill over into mobile behaviour as soon as the payment mechanisms bed in and become easy to use. (see below)

Wrap Up

I’m sure that’s as many facts about online and mobile as anyone can reasonably stomach in a single session!

So what does it all mean? I will leave you with three trends to ponder for your 2011 mobile customer engagement strategy.

1. Mobile payments are starting to appear. Still clumsy but an obvious next step in the monetisation gameplan
2. Location based services continue to flourish. This will continue to become one of the most plausible ways to deliver personalised experience yet invented. Brands with bricks and mortar points of presence can now promote them in real time as customers pass by using NFC technology
3. Mobile customer service takes hold. As Facebook sites become support enabled and peer to peer support communities accelerate their proven model, many customers will access these services via their mobile as they try to cram endless ‘to do’ lists into busy schedules

If you have read this far well done! I hope I’ve proved the need for urgent action and given you some of the ammo needed to justify and start experimenting with mobile customer engagement for the rest of 2011.

Good luck and good engagement!