Wednesday, December 14, 2011

Quick snippets on Google+

I've restarted reading the feeds I used to and like before, I come across a lot of interesting short nuggets (like this).

I don't want to clutter this blog, so if you're interested, follow my Google+ roll (it's the easiest tool I know of for now..).

Monday, December 12, 2011

What makes a successful, monetizable mobile app?

Recently there's been a interesting movements in the mobile payments space. For example, Amazon-Bango mobile payments for Fire, Mastercards' $18M investment in mFoundry and Square's recent $100M D-round (with a rumored valuation of $1B!).

The interesting topic, IMO, is, if I'm a marketer/retailer, what's the best strategy to A- define a realistic mobile success criteria, B- execute, measure and improve. Of course, that's a very broad topic: success criteria could mean uniques, visit depth, cross-channel transactions, bottom line etc. I hope everyone agrees, defining a success criteria is critical to the success of your mobile strategy.
Let's not diverge: I wanted to write about monetizing mobile strategies.

Devin Coldewey has an interesting TechCrunch post on Starbucks mobile revenues as % of total. To summarize (please read the article to get the complete message), the question is: well, mobile Starbucks card reloading in FY11 accounts for $110.5M vs a total  of $2.4M global Starbucks card transactions (Source), that's "nice". But minuscule (in his view). Will Starbucks continue using a lone-wolf payment solution or align itself with a more universal payment system like Google Wallet?

Tricky. Starbucks, as I'll discuss shortly, has the means to be very successful in the short term. Does that place them on an island (mobile payment method-wise)? not necessarily. They can add or replace the payment method once one becomes prevalent.

I argue that consolidation and unification of mobile payment solutions is coming, however not tomorrow and not 1-2 years from now. As you can see above: Mastercard believes in NFC. Square believes in their tiny HW add-on. Ebay predicts $5Bn revenues from their mobile shopping app in 2011. Back in my barcode scanning days I witnessed first hand how everyone in the service chain wants a hand on the users and revenues, and can't agree on the %. Dejavu: Verizon just decided to block Google wallet. I rest my case.

So who can make it happen?

  • Strategically, those who control large pieces of the service chain. Take Google for example: they control devices, have a mobile payment solution, figured out relations with businesses etc. Heck, they could even have their own spectrum. They have the name and $ to do it. They haven't done that so far even though they could (!). Further, IMO Android is still perceived as the less secure platform to do "serious business" on.
  • Tactically, there are plenty of businesses who control just enough pieces of the chain. They can take ownership of the user and monetize nicely in the short term. That's my main interest in this post.

Back to Starbucks. Love their app, and have been visiting their stores more frequently because the whole experience is so smooth. What drives 26M mobile transactions in 2011 and growing 3M monthly?

  • Slick experience: controlling the point of sale (PoS) and the application allows incredibly smooth 'checkout' process.
  • Loyalty program: Combining the loyalty card with freebies etc.
  • Trusted micro payment solution: The Starbucks card isn't an independent payment solution (like a Sears credit card is, for example) but you can load it once a while (that too is dead simple and slick) and make coffee micro payment. Trusted, slick, awesome.
  • Brand loyalty: coffee is a great example for brand strength and it's impact on loyalty.
  • The need to come into a store when you want a sip. Unlike online+physical retailers, Starbucks transactions happen in the store, when you're not in front of your computer. So it's either your wallet or your phone. For Amazon, Sears,'s a combination. When you're at home, you'll use your PC, not your phone (that's a generalization, but assuming you'd do product search on a PC..). 

So now take any number of similar businesses: Panera, any fast-food restaurant with a drive-thru, Larger retailers like Sears (who even have their own credit card). The above principles apply. Mobile monetization made simple.

What does a business like Panera need to do to get to the same level like the Starbucks app:

  • Loyalty card: check. Already exists, need to drive more awareness. Also, drive adoption via freebies.
  • Payments: allow loading funds into the card and payments via scanners at the PoS, or right from the app as I'll discuss a little later.
  • "My food": allow users to define their favorite plates so ordering is made incredibly easy.
  • Skip the line: That's the one I want to emphasize: You already know I'm in the store. Let me order straight from the app, pay, get a number and go sit. Let me know when my order is ready. Done. 

Hope this post is interesting and helpful. As always, interested in feedback and views. Looking forward to see more of these apps, and skip the line! ;)