Marketing in Mobile Moments

In today’s digital age, consumers expect brands to anticipate their needs and provide personalized solutions in real time. Sudhir Karunakaran, James L Frank Professor of Private Enterprise and Management at the Yale School of Management Executive Education, explains how contextual mobile targeting can reduce friction along the consumer journey and help a business retain and grow its customer base.

Transcript

As mobile has become more integrated into our lives, consumer expectations have changed significantly. Consumers now expect firms to anticipate their needs and satisfy them in a personalized and context-specific way when they want, where they want. Every time the customer pulls out a mobile phone to solve a problem along their customer journey, there is a mobile moment, and they expect some firm to help them solve that problem. The competition for customers now increasingly occurs in these mobile moments. Whichever firm helps the customers to move along their journey, with the least friction, wins. This means that firms must design consumer experiences around mobile moments and mobile journeys.

With mobile, marketers can now easily offer targeted messages to customers based on their location. The two most common practices are: one, geo-fencing, where a firm sends targeted messages to customers near its location in order to defend the people close to you; and two, geo-conquesting, where the firm sends targeted messages to a customer who’s near a competitor with the intent of poaching that competitor’s customer. For example, when a coffee chain sends you a discount when you’re right next to it, that is geo-fencing. But when it sends you a coupon when you’re next to a competitor, that would be geo-conquesting.

Of course, marketers know more than location. They also know the time, which can improve targeting. For example, suppose you’re near a cafe and a pub on a Friday afternoon at 2p.m. A message from a cafe for coffee would be more effective at this time. But when it is 8p.m., a message from the pub would be more effective.

Let’s consider a banking example. Using location data, some banks are now able to offer loans to customers who have installed their app on their cell phone. As soon as they notice that the customer has spent a lot of time in a car dealership or around a home that is for sale, the bank knows that anyone who spends time in a car dealership or near a home for sale for an extended period is probably looking for a car loan or a home mortgage.

The bank then integrates this information with data from the cloud about the person’s credit history, and is able to assess whether the person is a good credit risk. It’s then able to make a loan offer automatically in real time. The bank completely eliminated the loan application process, the time for underwriting, etc., and significantly reduced any of the unnecessary frictions in the customer journey.

Because, after all, consumers only want a loan, nobody wants to go to a bank or fill a form, etc. Those are purely frictions in the journey. You can imagine that this bank would easily win against the competition in the mobile moment against any bank that requires you to visit it. This kind of digital, mobile-driven innovation is completely disrupting traditional banking as branches are now being seen more as a friction than as a source of customer value in the customer’s journey. 

Mobile has two distinguishing characteristics that differentiate it from desktops: it’s location aware and it is portable. These two characteristics, combined with time, weather, and other data that you could partner with other firms, have significantly enhanced the ability of firms to perform contextual targeting that reduce frictions in the customer journey.