John: Tom Webster is here. He’s going to be talking about his brand-new book, The Mobile Commerce Revolution, written with Tim Hayden.
If you don’t know Tom, if you haven’t run across him in all the major social channels, he is VP of strategy and marketing at Edison Research, the folks that do the exit polls for the major political races. But he covers a lot of stuff, and most notable for us is his Infinite Dial report that talks about the state of online music and audio. We’ll have him tell us about that. Also the author of the BrandSavant blog, talking about what’s going on in his neck of the woods.
He has the Marketing Companion with Mark Schaefer, a podcast that he does — a two-man long format marketing discussion. Most importantly, he’s the producer of award-winning Friday Five podcast, and “Discovering the music DNA of interesting people” is the tagline on that.
Tom, welcome to the show.
Tom: Thank you. The Friday Five is coming back. I have three in the can now. I wanted to get four or five in the can before I launched, because, as you know, scheduling a podcast is awful.
John: That is the number one thing that people don’t think about that just takes so much time. It’s so great because I’m a huge music fan, so I love to hear that. It’s amazing to hear the stories people have behind the music they choose. Before we jump into the book and all that, tell us about your background. Obviously, you’re huge into media and podcasting, and you have a background in music, so tell us how this all came together.
Tom: I’ve largely been doing the same thing for about 20 years. I’m a consumer behavior guy, a researcher. I’ve done a lot of work in media research. In the first half of my career, I did a lot of work in media, measuring for the music and entertainment and radio industries audience measures and things. Then the last ten years were really a lot more focused on consumer behavior around technology, and both traditional and digital media, and marketing and advertising effectiveness. But at the heart of everything I’ve done for the past couple of decades has been studying the humans.
John: And how people move and decide.
Now, the book, The Mobile Commerce Revolution: where did this come from? Have you seen the signs and decided it was time for a book? Where did this all come from?
Tom: All credit to that has to go to my co-author and very good friend, Tim Hayden. Tim started this book originally. Tim is the most knowledgeable person about mobile who I know. My domain of authority is really about the mobile human, and Tim has a much more holistic and expansive knowledge of all things mobile. He started the book. He wrote it in the original Texan, and then I was hired to translate it.
No. He had a lot of great material, and I collaborated with him on mostly consumer behavior and how humans have changed, and I think really the biggest story of the book is that mobile has rewired human behavior as fast as anything that I’m aware of in the history of industry. We’re doing things now with our mobile phones by rote, out of habit, that we didn’t even imagine we would do five years ago.
John: Yeah. As you said, that’s right at the key of this book. It comes across quickly that mobile is a behavior; it’s not technology. We have all this tech that makes it happen, but there are literally these behaviors that change everything.
Two things that were interesting I’d love to hear you talk more about. One is going all the way to addiction. You guys address that, that some people are literally addicted to these phones. And then the other part of it is a narrowing of focus, too, in that most of people’s time is actually spent on a very small number of sites or content. So talk about all those behaviors, and how that comes together.
Tom: The interesting thing that’s happened with the smartphone now — and about two-thirds of Americans own a smartphone at this point — it’s not just that we own a smartphone; it’s that many of us are on our second, third, fourth smartphone. We’re now very, very comfortable with them.
When we buy a new smartphone, we load the same apps that we had before. There’s a suite of about 15 apps that I can’t live without, and they’re the first things that go on a new phone. I just got the iPhone 6, and that’s what I put on it.
It’s very hard, I think, to break a new app, because we do settle down with a smaller number of apps, just as we settle down with a smaller number of websites. The research that we quote in the book said 80% of people’s Internet time is spent on about 15 sites, and breaking into that 15 is a very difficult thing to do.
But that’s really just a function of the fact the mobile technology is mainstream technology, because that’s how mainstream humans act. Early adopters will load up on apps, and try and experiment new things, but as you get into the middle of the bell curve, there are just certain things people want and need to do, and that’s what they rely on their phones for. But what they’re relying on their phones for, again, are things that they wouldn’t even have dreamed of a few years ago.
Look at the Starbucks mobile app. The Starbucks mobile app is a phenomenally successful mobile strategy, and it’s essentially changing people’s behavior. It changes people’s behavior to stop into a Starbucks just to use the app.
John: They’re at the top. They are definitely the marquee mobile app. They have some gamification in there, it’s location-based. From what you see in that, then, how can other companies get on this bandwagon? What do they need to do? Obviously, they won’t get that level of success, but how can they get a better mobile strategy?
Tom: Well, I think they could get that level of success. I think that level of success at whatever scale you’re at is attainable. I’ll tell you the big key to what Starbucks did. When Starbucks brought out the app, there were some who ridiculed it, because it is a pretty low-tech solution. There’s no RFID. There’s no Bluetooth. There’s not an app that pays for it necessarily. It’s an app that prints a barcode, and they scan it with a barcode scanner.
But the genius about that is, first of all, it’s future-proof. If you were to write a story about this five years ago, if you had a smartphone, chances are you would read it on a Blackberry, which are few and far between now. Starting your mobile strategy with technology first is a long hiding to nowhere, but the thing that Starbucks realized — again, they started with the mobile human, and they watched the mobile human in line – is when the mobile human at Starbucks is waiting in line, what are they doing?
They are on their phone, and so when they get to the counter, they have to put their phone away and take out their wallet, or they have to have a phone in one hand and a wallet in the other and magically transport their drink. So Starbucks basically said, “Keep your wallet in your pocket.” That’s a human behavior that they researched, and it made the experience better for the humans in line.
Again, if you start with trying to remove a pain point, remove a step, make the experience of the mobile human a little bit better. That’s the basis for any mobile strategy.
John: You’re talking about the mobile human and what they’re doing, the experience at that one point. There’s another big idea in the book that I love. You talk about integration and little data. It’s really about how that one individual user is using the device and where they go with that. Talk about that, and how it seems contrary to the whole big data thing we’re being sold now. Where did that idea come from, and where do you go with it?
Tom: I think the exciting thing about mobile technology… First of all, ask yourself if this is true. (a) Do you have a smartphone? I bet you do. (b) If you change your smartphone, will you keep your number? My guess is that you will.
Your mobile phone number is now just like your social security number. I still have a North Carolina one. I live in Boston. I’m not going to change that number. I get text alerts to that number from travel services. So many people have that number. That’s my social security number.
The thing about that number is if you’re reaching me at that number, you are reaching me. You are not reaching a desktop that other people can use. You are not watching a TV screen that many people can view. It is truly the key to an actual one-to-one relationship.
The exciting thing about mobile technology – because the mobile device really is the key to that direct, personal relationship – is I hope marketing becomes what it used to be in the 1890s, when the people who ran your local store, your local butcher, they knew your name. They knew what products you liked. They ran a tab for you. I think the exciting thing about mobile is we can go back to that at scale.
John: That’s the real challenge. We’ve been promised one-to-one for decades really, and it seems like we have a lot more of the technology. Talk more about that. There are so many problems when you try to get to scale. You always see the examples of a frequent flyer member, and they’re getting an email, and they’re saying, “I don’t need more miles. I’ve got millions of miles.” How can we get closer to that one-to-one experience? What other ways do you see being able to drill down like that?
Tom: You have to provide value in the relationship. We’re so used to being marketed as a segment. In order to market to you as a human, I need to have a little more profile data, and I need to have your permission to do that on a mobile basis. And in order for me to do that, you have to provide some serious value above and beyond the value of your product or the value of your service.
It’s a courtship. It is a courtship as much as e-mail marketing was 15 years ago. If you provide something that is truly a value to me, then I’m going to give you permission to contact me. I’m going to give you permission to continue to provide value to me, because I’m a selfish person. I’m going to give you that opportunity to have that one-to-one relationship. Essentially, it’s just replacing the profile data of a segment with the profile data of an individual human who you know you’re going to be able to reach.
I’ll give you a great example of this, and this is why mobile is holistic and so not just about marketing. One of my favorite companies is Hilton. I am unobtainium mithril level with Hilton, and their mobile app is fantastic. You can do all the things that you would expect you could do with it, but what Hilton is going to start rolling out is a smart door technology.
You’re going to be able to check into a Hilton directly from your phone — and this will be true for many hotel chains, I suspect. You will never again have to go to a desk to be told that your room isn’t ready. You can look on the app, and you can see, “This room is ready. I’ll pick this one.” Then you just simply go to the room, and the app will unlock the door for you.
Now, if Hilton does that, I’m going to love Hilton a little bit more – actually, maybe a lot bit more – and as I continue to develop that deeper relationship, and they go from top-of-mind awareness to what my friend Tom Martin would call top-of-mind preference, I will more and more actively exclude other brands from my consideration set for those brands that deepen that relationship by removing pain points, steps, and friction from my journey.
John: You mentioned in your book the behavioral strategist and their role in coming up with marketing programs and rolling out mobile. Does that tie into that, then? Am I right on that track?
Tom: Yes. One of the points that we make in the book – and this is really one of Tim’s great points – is that if you’re going to tackle a mobile strategy, then your first hire should be a genuine strategist who knows something about consumer behavior, and not a technologist per se, because I think if you start with the technology, you are excluding the possibilities.
Some of the best mobile strategies I know of don’t even use a smartphone. They certainly didn’t start with a smartphone. The cashless RFID wristbands that Lollapalooza used this year were a great idea. They enabled people to not even have to take their phone out when the weather was not very good. It was soggy and rainy. People didn’t have to take their phone even to pay for things.
I haven’t seen any hard evidence on how that impacted sales. There’s some anecdotal evidence that it boosted sales, but it certainly reduced friction, and there’s not even a phone involved there.
I think what some people call a mobile strategy, in my business – because we’ve done this kind of research for two decades at Edison – we call them out-of-home humans. We do a lot of work in the out-of-home media space: how people respond, interact with, and get the sense of a brand from their out-of-home encounters with it.
One of my clients is the AMC theater chain, and one of the things that AMC does is, and you can see this any time you go into one… Anybody can sit in a chair and watch a movie. I can sit in a chair and watch a movie at home. I can sit in a chair and watch a movie at the theater.
But what AMC does, and you’ll see this any time you go to see a movie there, is they really take into account the out-of-home human, and provide the things that you don’t have at home. Yes, people have bigger and bigger screens, and certainly they may not compete with a movie theater screen, but if you’re close enough to it, it does.
But they try to blow you away with things that you don’t have at home, and in a sense, that is a mobile strategy. I just recently went to an AMC Prime theater with these incredible seats that had bass kickers built into them and reclines, and all that stuff. I don’t have that at home.
All you have to really do is think about the mobile human, and sometimes those things will involve the phone, sometimes they won’t involve the phone, but they will always involve a customer in transition, and if you can come up with ways to remove roadblocks and ease their passage, that’s the key to a mobile strategy.
John: When you want to attack this, then, and build this, is it a matter of you creating the flows? Can you actually create these flows, or do you have to discover it? Do you have to go and see where they’re already at, and work around what’s happening?
Tom: I think your first step is a qualitative step always, and by that I mean you actually have to observe the flows. It is far, far easier to work with the stream than to try to divert it. I think the great thing about so many successful mobile strategies is that they’re not creating a brand-new behavior; they are simply creating a way to do something you already wanted to do, or maybe you didn’t know could be done for you, but you certainly want to do it, but not a completely new behavior.
That’s one of the things I think why Apple Pay is going to be so successful. Apple Pay is going to be so successful because so many millions of us already trust Apple with our credit cards. They’ve had them for years. They probably have more credit cards than anybody, because we’ve been buying things from the iTunes music store. That’s going to be a natural extension of something that we frankly already wanted to do and that we’re already comfortable with, which is why I think it’s going to be quite successful.
You have to observe the humans first. Some of my favorite stories and research are really qualitative research stories, and so much of that is talking to people. It’s doing ethnographic research, which involves actually observing them.
Proctor & Gamble has done tons of ethnographic research. They’re really one of the leaders as far as the brand goes. That’s why things like the spill-proof cap for laundry detergent were invented, not because somebody took a survey about it, but because the first thing they did was go into homes and watch people use their products, and see the sticky ring left on the machine.
If you solve those problems that people don’t even express, you can observe them, observe their flow, and that’s really the key to starting your mobile strategy.
John: That’s an interesting point you brought up, the Apple Pay going on here. We’ve seen in other parts of the world, especially the Far East, that this type of payment system works and is already adopted. In fact, in the book, you go into that in-depth, talking about the developing world. Especially I was interested with the unbanked, people who had no access to financial institutions and now do.
Then another thing that was interesting and got me thinking was the trust, security, and optimism of China in that it’s a newer economy. They don’t have the distrust of the government or business that actually we in the States have, which is almost a liability. Tell us more about the global side of things.
Tom: I think you’ve hit on a couple of really key things. First of all, yes, there is that stronger optimism with the Chinese people about the companies and institutions serving them. The kinds of things they want to do on their mobile phone are things that maybe some of them are more comfortable with than we are, but that’s all going to change. That’s all going to change over time. We’re getting more and more comfortable with it.
But I think the key is if you aren’t already a company that people trust and have that relationship with, then you’re not going to magically get that when you build an app. Part of your mobile strategy is absolutely a trust strategy. I don’t know about you, but I have four or five new debit cards re-issued this year from skimmers at gas stations and all kinds of different fraud items.
I think that one of the ways that a company is going to set itself apart, a differentiation strategy, is to start taking our security seriously. Make it the core tenet of their belief. Make it the theory of the firm, to quote Peter Drucker. Make that a selling point that you are going to be a zealot, relentless about guarding our personal data. It’s happening so much to so many companies that not only could it hold the industry back, but it is in fact the selling point.
John: Yeah, you’re right. When I was reading about Apple Pay for the first time, the thing that got me was second-factor authentication. You get a code that only gets used once for that transaction, and then the person doing the transaction doesn’t even get your name. It’s not like you’re handing over the card.
I can see that stuff catching on and catching fire. Doing one fewer credit card replacement for Bank of America is a huge undertaking, so obviously we’ll see a lot more of that as time goes on.
The book is The Mobile Commerce Revolution. You can get it wherever fine books are sold. It’s published by Que, as a matter of fact. If you know tech books, they are one of, if not the most, venerable publishers.
Tom, thanks for taking time to talk to us today.
Tom: Absolutely. Thank you so much for having me on, John.
John: If people want to follow up with you, what’s the best way to get in touch with you?