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September 13, 2005

Excerpts: Branding Unbound by Rick Mathieson - Part II

By: 800-CEO-READ @ 3:23 PM – Filed under: Management & Workplace Culture

Q&A
Don Peppers: 1:1 Marketing Goes Wireless
As an influential thought-leader whose groundbreaking books include Enterprise One-to-One: Tools for Competing in the Interactive Age and Return on Customer: The Revolutionary New Way to Maximize the Value of Your Customers, Peppers advises a Whos Who of international marketersAT&T, Ford, and 3M, among otherswho count on him for insight on using technology to build unbreakable customer loyalty.
But that proposition is about to become increasingly complex, he says, as the convergence of wireless technologies and global positioning systems transforms the notion
of reaching customers where they live.
RICK MATHIESON: How will mobility change our idea of what constitutes the "brand experience?"
DON PEPPERS: The most compelling aspect of mobility is the continuous management of evolving relationships with individual consumers. You can be continuously connected with a customer, not just when hes sitting in front of a computer. You can actually get feedback, and real transactions, on a real-time basisits as if youre tethered to your customers life. And that means there is tremendous opportunity in using mobility to increase the value of each customer, and your value to him or her.
Today, most of us can barely imagine life without a cell phone. Consumers are getting used to always-on communications, and those communications are gaining utility. As a result, companies that provide services and maintain relationships with customers are going to have to participate in this channel. And yet, companies are going to have to do it in a way that is nonintrusive, because nothing will give a customer a bigger red face with respect to a company than
if that company begins to interrupt him or her in order to try to sell them stuff.
Martha [Rogers, my coauthor] and I have a new concept in Return on Customer. Our argument is that for a company, its the customers that create all value. And like any asset, customers ought to be evaluated for what kind of return we get on them. Our central mission becomes finding ways to increase short-term profits, while promoting behavior that increases the long-term value of that customer. And usually, that can only happen when we help customers understand how to get the most value out of us. It happens when we earn the customers trust, treat the customer the way theyd like to be treated, and actually act in their best interests in a way thats mutually beneficial.
For instance, if Im Ameritrade, and I have a customer who trades three or four times a day when hes in his office, but he doesnt trade when hes traveling, Id strongly consider giving him a BlackBerry and a wireless trading account. Its a win/win for both of us. The customer gets convenience, and the company gains potential new revenues.
Theres also a role for mobility in connecting the mobile salesperson and delivery person with the mother ship, so to speak. Whether were talking about the phone repairman who has access to his customers records, or the delivery driver who reconfigures the product on the fly based on initial customer feedback, mobility has a great deal to do with the intimacy with which any business can serve its customers.
RM: Many think mobility will enable further disintermediation of services. But you envision the rise of "Data Aggregation Agents" that enable companies to deliver 1:1 services based on my needs and locationas long as they play by my rules. Whats the business model for these DAAs?
DP: Instead of giving out personal information to every vendor that I might deal with in the mobile mediummy news service, my broker, my concierge, my travel agent--Im going to want one entity that remembers my preferences and needs, but that provides me anonymity.
One entity that knows my account numbers for all the different companies I deal with, across a lot of different platforms and different mobile media. And that entity is something we call the "Data Aggregation Agent."
The DAA is going to simplify the consumers life because it will save them a great deal of time and energy. Im not going to want to fill in my speed dial numbers, my friends names and e-mail addresses, my credit card numbers, my social security numbers, my everything, for everybody. The DAA will store all that information for me in one place, and then partition out data to companies as I see fit. Its just a hypothetical, science fiction possibility, of course. But I think its a compelling new business model for the future, and could have a tremendous impact on the nature of competition in this medium.
RM: Youre talking about some pretty valuable information. Seems like a lot of companies would fight over playing the role of DAA.
DP: You bet they will. Already, there are a lot of infantile battles going on among businesses that all think that they can be Data Aggregation Agents. A very simple example was when Boeing started selling airlines on the idea of connecting airplanes to the Internet. Are you surprised by the fact that American Airlines doesnt want its high-value business passengers dialing up on the Internet and connecting suddenly to the Boeing Web site?
The same exact battle is going to play out in telematics on the road. Weve met with companies in the automotive manufacturing space, as well as companies in the mobile communications electronics space, and they have the same basic designs on the customer: I want that customer to be my customer.
But in the end, everybody cant win. The most compelling business model is one where the consumer gets the value. And the value Im getting if Im a consumer is convenience, relevance, and not having to fill out the same form or keep track of different account numbers. So there are a lot of reasons why the Data Aggregation Agent model is
going to work. And that role could be filled by a wireless carrier like Verizon. It could be filled by an airline. It could be AOL or Yahoo. Or it could be filled by completely new players.
RM: As wireless moves into the in-store experience, what opportunities will there be to maximize the experience for customers?
DP: I think RFID technology, in particular, has a great deal of potential for that. The science fiction future of RFID is that I have my credit card in my wallet, I walk into the grocery store, I put a bunch of shopping products in my bags and I walk out the door and take them home, and Im automatically billed for them. I dont need to stop at the checkout counter, and I dont have to do anything but walk out with my products. I think that will be highly desirable for consumers. But there is a big-brother aspect to the technology that is awakening some of the Luddites in the business, who say, gee, I dont know if I want companies tracking every movement that I make, and so forth. But I think on balance, consumer convenience is going to be the trump card. That said, whether its in-store, or out in the world via consumer cell phones, companies will have to be very careful about how they apply wireless technologies.
In this medium, youre playing with fire when it comes to privacy. Its impossible to architect the regulatory structure in such a way to ensure that youre not going to get hit with some kind of privacy problem.
The best defense is to adopt a holistic view of your business. In my conception, every business would visualize their service in terms of treating their customers the way youd want to be treated. The golden rule of marketing, if you will. With that in mind, you simply cant go wrong.
RM: The same applies to 1:1 mobile advertising, no doubt.
DP: If youre driving down the street and an ad comes on because youre a block away from McDonalds, youre going to be extremely irritated. And if you have to listen to an ad before you place a call, youre going to be pissed.
But unlike a lot of folks, I dont think that means push is going to always be excluded from peoples requirements-as long as its pushed at the customers initiation and doesnt trespass on the legitimate use of their time.
For instance, if I execute a trade on my cell phone, and youre my online brokerage, I dont mind you piggybacking an ad for an offer I might be interested in at the bottom of an order confirmation. Or if youre Amazon, you might recommend an additional book based on my profile. Or American Airlines might send an e-mail about cheap tickets
I can buy because they havent sold enough seats to the locations on my preferred destination list.
I can see a lot of potential for that kind of push messageas long as the customer says its okay to send them. Because whether were talking about an ad message, a service, or a transaction, its all about using mobile technologies to add value to our customers lives based on what they want, whereand whenthey want it.
If you get it right, you win big. If you get it wrong, youre history.