Smartphones and tablets have become hot items for today’s tech-savvy consumers. The consumer technology market is on the move again and smart business leaders are offering a growing line-up of mobile applications and services. Over time, not all of these offerings will be successful. If the dotcom crash of the late 1990s has taught us anything, it is that leading-edge technology will inevitably fail if it is not backed by a sound business strategy. Ten years ago, it would have been hard to imagine how far the online market could have progressed. Ecommerce and web services are now both common and profitable. Today, mobile technology is a top-of-mind issue for consumers. It has become the hot discussion topic at offices and dinner tables around Australia.
When Woolworths recently released its iPhone app, 700,000Australians are reported to have downloaded it in less than a month.
Survey data supports this growing fascination with mobile technology. A survey recently released by the Australian Communications and Media Authority found that by the end of 2010, 23 per cent of Australians aged 14 years and over accessed the internet via a mobile phone. This is up from15 per cent the previous year. With an increasingly competitive market and new growth in tablet sales, Australian mobile penetration is set to grow even further through 2011.
Ovum’s own analysis and interviews with corporate executives support these findings.
Indeed CIOs are finding themselves under pressure from all directions. Customers are looking for new, value-added mobile services.
Staff are demanding connectivity to support the latest devices. Executives are turning their backs on the reams of paper produced for meetings, opting for more functional and portable tablet devices such as iPads.
New services need new thinking but it must still be built on sound business fundamentals.
Typically, each organisation will have its own methodology for sales and marketing, but sometimes their sophistication can work against new technologies that do not quite fit traditional rules. So let’s go back to basics.
Most of today’s sales and marketing strategies have their roots in the work of Elias St Elmo Lewis in 1898. Today, Lewis’s model can still provide a solid generic basis for linking a company’s mobile strategy to its corporate sales and marketing strategy. His AIDA model outlines the following universal steps needed for successful customer engagement:
1. Awareness – Generally attracting the attention of the customer towards the company or solution.
2. Interest – Building specific interest based on the advantages and benefits of the solution, not just its features and functions.
3. Desire – Convincing the customer this product or service will satisfy their needs.
4. Action – Engaging the customer to take some action, such as buying a product.
5. Satisfaction – This step was added later to describe how loyal customers can themselves become advocates, telling their friends about their successful outcome.
The problem with many mobile apps is that their success is often measured only by the number of downloads. At best, this approach might build brand awareness (AIDA Step 1), but deliver few real outcomes for the company. App download rate is therefore a poor measure of success in a mobile strategy.
Notwithstanding these problems, there are many good examples where businesses have got it right. Recent supermarket apps such as the Woolworths one, satisfy the AIDA criteria. These apps have been designed to drive both online and personal shopping channels, as well as providing valuable customer profile data to support further customisation of products and services.
Many Australian banking apps have been designed to satisfy the criteria by mimicking existing online systems that are already successful. New banking systems are now appearing in a competitive market. The Commonwealth Bank’s property guide app combines existing data sources with augmented reality to guide people through real estate choice and towards its products.
Lewis’s AIDA model also demonstrates the power of social networking in turbo-charging the sales process. Social networking provides satisfied customers with a readymade online forum for telling friends about a successful encounter (AIDA Step 5). Mobile technology significantly enhances the potential benefits of social networking by allowing satisfied clients to report on their experience while they are still fresh from the sales encounter.
Lewis’s AIDA model and its derivatives have stood the test of time for more than a century. However in the future, mobile technologies and social networking might finally spell the end to this venerable model. Social networking is beginning to redefine the sales process more in terms of an ongoing conversation rather than as discrete transactions.
Tomorrow’s marketing rules might be very different from what we see today.
Kevin Noonan is a research director in Ovum’s government practice. Email comments to firstname.lastname@example.org
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