by David M. Raab
Curtis Marketwise FIRST
June 2007
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Mobile banking has been the Next Big Thing for so long that you’re either doing it or sick of hearing about it—or maybe both. But mobile marketing in general continues to expand and mobile banking will inevitably follow. So it does pay to think about how you’re going to take advantage of the opportunities that mobile provides.
The first step is to recognize that mobile phones are not just very small personal computers. Yes, treat they can receive emails and videos and browse the Web. Some can even run spreadsheets, physician word processors, physician and other software. But mobile phones are different in at least four fundamental ways:
– location aware: cell phones know where they are based on GPS and wireless positioning systems. Assuming permission has been granted, marketers can use this information to better serve customers through targeted offers, tailored search results, and new insights into customer needs. There’s more going on here than offering a coupon to someone walking past the window: imagine traffic alerts triggered by a delay along the customer’s normal route to work (the delay itself inferred from cell phone transmissions), or a taxi service that automatically calls the car closest to your current location. Bankers might want something more prosaic like helping customers find the nearest ATM, but bear in mind that every type of contact is a potential advertising or branding opportunity, so there’s more going on here than just delivering bank services.
– always on: many people won’t shut off their cell phone unless explicitly instructed to (and sometimes not even then) This means low balance notices, fraud alarms, answers to customer service questions, and time-sensitive offers can reach customers more quickly. Again, the most compelling applications may come outside of banking, but anything that gains a customer’s attention can be built into a bank’s communications plans.
– integrated billing: payments for purchases made through the cell phone can be collected via the phone bill. This removes a major point of commercial friction at a fraction of the processing cost of credit cards or paper checks (remember those?) Of course, this could hurt banks if it cuts into fee income—but it’s going to happen anyway, so be prepared and make it work to your advantage.
– personal: cell phones are not (yet) physically implanted in people, but in many cases they may as well be. Stored phone numbers, recent call history, downloaded ring tones, saved photos and videos all tie each phone closely to its owner. This makes the phone better suited to truly personalized offers and services than any other communications device. Of course, people do occasionally leave phones at home, lose them or lend them to others, so you can’t assume the owner is always the user, or even present. But for marketing purposes, being right most of the time is good enough.
If phones have so many advantages, why aren’t they used more widely for marketing and customer relationship management? The short answer is the world—and the U.S. in particular– isn’t quite ready yet. Old, limited-capability handsets are still common. Calling costs remain high, particularly for non-voice services like text, Internet, video and music transfers. Advertising inventory is scarce due to low mobile Web usage and because so few sites have been mobile-enabled. Tools to set up mobile campaigns are immature and often usable only by the agencies that developed them. Few marketers have enough experience with mobile promotions to reliably predict what will work.
But all these barriers are falling. It’s impossible to predict when mobile marketing will become “mainstream”, whatever that might mean, but it will be sooner rather than later. What we do know today is that the unique capabilities of mobile phones imply new and unique customer interactions. With mobile phones present during nearly every customer activity, the ability of phones to participate in those activities is limited only by the ability of marketers to find ways for phones to add value. This value could come from making the activity easier, faster, cheaper, or more fun. Many value-adding services will make use of financial information already held by a bank. Still more will provide opportunities to deliver highly targeted messages to promote a bank’s brand or offerings. Bank marketers need to recognize the growing role that mobile phones play in their customers’ lives and look closely at how they can participate in the new world of opportunities the phones will provide.
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