New Marketing - Trends and Insights

Tuesday, May 29, 2007

(Mobile) Operators - commodities in the development?

What about if someone would pay for your phone bills? And I don't mean your employer.
I mean you would use your phone for free, and the advertisers would take care of the bill.
The "only" thing you would need to do is accept to hear their rant before calling, or read (not only receive) their SMS/MMS.

Actually, it is the opposite of what is happening with TV. People pay a premium to access an ad-free channel--the problem being when you pay for the access and THEN you get ads on top... how do people stand it, it's beyond me!

Sounds interesting, now doesn't it? Someone could build its business model on this premise. How much of a revolutionary concept is this? Virgin Mobiles did it last year, IIRC. Their target group was "young people"--at least in the beginning. The main task here is actually maintaining the people in the network. Here's the trick:
Opportunity 1: Young people are the ones more prone to accept ads on their phones in exchange for free calls.
Opportunity 1: Young people are the most prone to use 3G services, bringing more value to the operator.
Challenge 1: Young people are the most cynical against ads.
Challenge 2: Young people are the most prone to churn.

Enters the scene social network analytics, to tackle this issue. The main goal is to find the best way to deliver the right ad message to the people to whom it will resonate best at the best time.
In this way, the probability that the ad is effective (i.e., that it produces an effect on the receiver--namely BUYING) is much higher; also, the customer receiving only ads that are interesting to his lifestyle/preferences will most likely choose to stay in the network--and get others to join.
The most innovative feature of these solutions is that it provides the operator and the advertisers with a common platform, where the targets' desired characteristics can be adjusted, as to find the right segments to whom launch the ad, thus increasing the effectiveness of a specific ad. In a way, like the slots in an airport.
It is up to the operator to select the which are the most expensive "slots".

Of course, when (not if) the advertising-funded calls concept succeeds, all operators will do the same!!
Why bother with all this? Basically because the future of mobile marketing in terms of value resides in advertising, so if operators want a piece of the future pie, they will have to control a piece of the value chain:
Operators will be the toll on the motorway where the mobile marketing traffic flows.

... or else they will be providing a commodity--traffic flow support.

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Friday, May 25, 2007

Restaurante Riverside - Social Network and Buzz

When choosing a restaurant in Portugal, I usually have some rules of thumb (I do not count fast-fodder places as restaurants, for obvious reasons--the first being they are not restaurants).
One, I avoid shopping malls--franchisings are not the "real thing", are they?
Two, I avoid places with menus in English--usually there is a "tourist premium" attached, not compensated by the increase--or more often decrease!--in quality.

Last week I went for work to Lisbon, and I happen to go to lunch with a long-time friend. He chose the place. The "Riverside", in the "Dolce Vita Monumental" food court.
Given above-mentioned point one, I was suspicious--had he been in Lisbon for too long?
He told me it was very good Italian buffet restaurant, on top of that even cheap. He gave me some examples of what he had been eating. Since this guy is as a gourmet as I am, I thought I should give him a chance.

I arrived first, so I went to check their offers. What to say?
I was like a kid on a candy store (or my mother in a crystal store). The (Brasilian) Chef looked at my face and gladly went on to explain what delicacies he had prepared.
If I recall correctly, on that day there was:
- Duck legs with lemon sauce
- Veal medallion in brie sauce
- Fried grouper with oven vegetables
- Seafood saffron-risotto
- Tagliarini all'amatriciana
- Tagliatelle funghi e panna
- at least two more wounderful stuffed pasta dishes with creamy 4-cheese sauce
- a 5 metre salad table
- if one does not like Italian, there is a 5 metre Brasilian meat (and pineapple) roast also...

After one selects, the plate(s) are weighted (the second dish is plastic). It costs 11,6€/kg 17,6€/kg (my bad, I misread the "7" for "1").
For absolutely delightful, utterly well-prepared delicious food!
By Jove, when back in Helsinki I found sausages costing more than that!
So you know. If you find yourself in Lisbon, around Marquês de Pombal/Saldanha area, ask around where the Monumental is, then go to the down floor, and you'll find Riverside.
You cannot but enjoy!!!

See what happened here? Social networks in practice. The Riverside does little or no advertising, and builds their customer base on satisfied customers (through absolute quality) and personal recommendation. Positive buzz. Smart guys. And I love smart people!

Star Alliance 10 Years

Again I flew Lufthansa. They are great!
Good (warm) food, excellent service, short connections, arriving on time.

The in-flight magazine this onth dealt with the 10th. anniversary of my favourite airline "group": Star Alliance.
It was really nice to read the interview with the CEO.
He starts by saying that their focus is on... guess what! The customer!
One particular phrase struck me: "not cost-cutting, but customer satisfaction".
Cynical as we are, I am hearing already someone shouting "LIP SERVICE"!
The thing is: in Lufthansa or TAP... IT SHOWS! It always did.

I started flying (only) 10 years ago. Hey! It was when Star Alliance started!
Back then, I used Lufthansa just because it was way cheaper than the others. And the food was good (but then again, so it was in the other airlines). In plus, coffee was free of charge in München, which was nice for someone who did not carry Deutsche Marks.
What happened since then?
Petrol costs went up by a gazillion percent. So "normal" airlines had to cut costs.
Low-frills airlines appeared. So "normal" airlines had to cut costs.
After September 11 people stopped (so they say) using planes. So "normal" airlines had to cut costs.
Whatever reason excuse happened. So "normal" airlines had to cut costs.

SAS had an excellent service, and coming from Helsinki it would be a good option. They stopped serving things for free. Oh well... at the same time, Lufthansa (remember, both from Star) cut down prices... maintaining--or as I noticed in-flight, improved--the level of service? Need I say what I did?

Funny thing... on SAS 60th. anniversary, I flew SAS from Bologna to Helsinki through Stockholm. At the gate in Bologna there was a full tray of local delicacies, including champagne. Nice! A party! Then in the plane... a measly small chocolate. Oh well...
In Stockholm it was business as usual. No party. Next flight, the same small chocolate. What the heck is the SAS marketing department thinking?
Are they EVEN thinking??? How costly would it be to offer a full meal to customers once every 10 years? In fact, I do think it would benefit them in terms of customer loyalty. SAS became a not-so-low-cost low-cost ariline.
Lycka till for them for the next 60 years. Just don't count on me.

How come then my "German friends" manage to offer such a good service at such low ticket prices? I know other companies have higher salaries, but their staff is so rude (a French airline). Maybe Lufthansa has the right catering and other partners. Maybe they are just more cost-efficient. Maybe it is both. Whatever they do, I thank them deeply. I am a loyal customer, who recommends them to just about everyone.

Note: Coffee is still free of charge in München.