Tom Webster, writing and speaking

Filtering by Category: Location Based Services

Location-Based Services And The Customer Lifecycle

Added on by Tom Webster.

Knights Plaza RetailI'm currently sitting in an event in Boston called GeoM2, an afternoon of panels discussing the future of location-based marketing. It struck me that there are lots of players in this space focusing on a moment in time - the check-in, the conversion, the experience. So many LBS services are in fact focused on the offer - if you are in the neighborhood, come get some nachos. The offer is valuable, certainly, but from a retail strategy standpoint, what's the point of the offer? For Groupon, the offer is typically geared towards trial. For Foursquare, it's loyalty. In all cases, however, the offer might change over time, but the view of the consumer is static.

Consumers aren't static, however. Though the layers have gotten more complicated, the sales funnel hasn't gone away. Brands still need to migrate consumers through the great circle of marketing life - Awareness, Trial, Churn, and Satisfaction/Loyalty. All roads lead to one of these four places: as trial becomes loyalty becomes evangelism, that evangelism creates new awareness, and the circle moves ever on and on. Shouldn't my "offers" reflect my changing place on that great wheel?

If I've had one prior check-in, I've already had trial, so my offers should naturally migrate to loyalty/repeat business incentives. If I check in five more times within a certain period, I should get that offer - mayor or no. And If I check in a lot, it's time for that business to start treating me like a brand ambassador, and not as a mere upsell opportunity. For example, I have coffee at the same place in Carrboro, NC, every day I am in town (Jessee's, btw - best beans in town!) I check in every time. I will never become the mayor. But I have a deep relationship with Jessee's. Trial-oriented offers aren't right for me. And they've already got my loyalty - the metric tonnage of my prior check-ins can establish that. Now what they should be encouraging is evangelism. My "offers" should revolve around my introducing someone new to Jessee's, and checking in with them together. That's a relationship you can't assume from the first check-in, but it isn't rocket surgery to get there from the data I am already providing Jessee's.

This truly consumer-centric model for LBS should also translate to the actual products and services being offered themselves. I check-in to The Franklin Hotel lobby bar from time to time. Their long-running, never changing Groupon offer is for a cheese plate. I don't want a cheese plate. When I check-in, I want an offer tailored to my previous purchase history (which is, without fail, a Plymouth Martini, up with a twist.)

How would The Franklin know that they should offer me a Plymouth Martini? From modeling my place on the great circle of marketing life, of course. If I have checked in ten times at The Franklin over a few months, chances are I'd be responsive to the 10th check-in just flat out asking me: what's your drink? After all, collected profile data online is exactly like dating someone. If I've gone out with you ten times, chances are I'll let you get to second base. Just sayin'.

If LBS apps and services expect to hit a home run, they have to do a little more than just buy me dinner.

A Consumer Behaviorist Looks At The Death Of Facebook Places

Added on by Tom Webster.

Facebook recently decided to kill off "Places," its entry into the location-based apps and services game. There are a few schools of thought regarding what this means for Foursquare, specifically, but also for the "check-in," period. Certainly, there is a simplistic point of view that sees this as good for Foursquare - the giant competitor they feared has exited the space, leaving Foursquare with a far less crowded playing field to contend with. The other side of this argument holds that it is actually a coup for Facebook, in that they have managed to do away with the check-in altogether, in favor of less obtrusive means of adding location data to status updates. I am not an expert in location-based apps and services. I do think there are lots of other things Facebook could have done with Places, however (for ideas, see the new book from Aaron Strout, SchneiderMike and B.J. Emerson, "Location-Based Marketing For Dummies.") So I'm not going to speculate about the future of Foursquare, Facebook OR the check-in. I do note, however, as someone who makes his living studying consumer behavior, that saying the check-in is dead presupposes that it ever really had a chance to live in the first place. While some small subset of Twitter users may have had their time in the sun with location-based check-ins, the concept was never really explained well enough to mainstream users to have ever really had a chance.

The best thing that could have happened for the check-in would have been for Facebook to have been successful with Places - and to have crafted a value proposition that the average user could understand and get behind - which would have, in essence, created the mainstream proposition for check-in behavior. Instead, we had very little in the way of explanation, few explainable "benefits," and, of course, privacy kerfuffles.

In other words, the fate of the check-in was squarely in Facebook's hands, and either through omission or commission they allowed it to founder. Having the megaphone of Facebook clearly explaining the value of a check-in would have trained mainstream Americans to engage in the behavior, which would have been good for Foursquare, not bad. Now Foursquare needs to articulate that value all by themselves if they hope to cross the chasm and crack the larger market they could potentially reach.

In that sense, Foursquare was Betamax, and Facebook VHS. Two competing "standards" for check-ins, with valid argument on both sides for which standard was best. Sure, Betamax lost in the end. But what that battle did do was establish the value of videotape for home recording and viewing. In the case of the check-in, Facebook's VHS has exited the game, but before either side could teach us that we wanted, or needed to tape things.

So, conventional wisdom now holds that the check-in is dead. Maybe so. There does seem to be a lot of that "conventional wisdom," however, for a class of service that really didn't ever have a proper value proposition for 95% of the population. Pundits (and yes, I suppose I am one, too) will say that "people don't want to check-in." I don't believe this, and never have. It's all a question of how the check-in is framed. Every time you go to the grocery store, and use your MVP/VIP/Loyal Shopper card at the checkout, that's EXACTLY what you are doing - you are telling the store, its parent company and anyone else who accesses that data WHO you are, WHERE you are, and that you buy diapers, beer, chocolate and condoms together (big night!) So I don't buy that the average American wouldn't check-in.

Maybe Facebook just didn't try hard enough.

The Infinite Dial: New Research On Digital Media

Added on by Tom Webster.

Last week I was honored to co-present a major new research release from Edison (my company) and our partners at Arbitron, entitled "The Infinite Dial 2011: Navigating Digital Platforms." Much of this release focused on the various platforms for audio - AM/FM radio, online radio (with a healthy dose of Pandora), Podcasting, etc. - however, we also premiered new data on some other relevant platforms, including some big news about social media (especially Facebook) and the continuing prominence of smartphones and mobile media consumption. I thought the presentation went great, and 1,000 people viewed it live (not bad for a bucket full o' numbers.) My co-presenter, Arbitron's Bill Rose, and I were in fine form, and I think anyone in marketing or media will find a nugget or two in here that will be of use. The replay is finally available (thanks to the unparalleled Matt Ridings for conversion assistance), and I think you'll find there are worse ways to kill an hour.

Enjoy.

Are Location Based Services "Catching On?"

Added on by Tom Webster.

Today's New York Times notes that, according to a report from Pew, "Location Services Have Not Caught On." The article points out a recent study from Pew which indicates, among other things, that four percent of online adults use location-based services (LBS) at all, and one percent use them on any given day. As a result of this headline, Twitter is currently afire with reports of the demise of LBS. I read the actual report from Pew's Internet & American Life project, and it is a fine piece of survey research. Pew, to their endless credit, does not color their findings with words like "only;" rather, they report the data without judgment.

The slant on this data, that "only" four percent of online adults use these services, is a natural inclination when we see small numbers. In the case of the four percent, however, I submit that how you process this number is dependent upon how you frame it. If I compare LBS users to all online Americans, I can come up with a figure of four percent. If I framed it against the whole planet, I could probably report a number like .0001%. It really depends on the story I want to tell.

To me, four percent is still a lot of people, because I would frame it differently. While the figures vary, the percentage of all Americans with smartphones is between 20 and 25% (most recent data can be found from Nielsen, comScore and Pew, among others.) While I haven't seen a figure for the percentage of Americans who own GPS or GPS-A enabled smartphones, logically it can't be more than a quarter of Americans, and indeed is probably closer to half that. Let's be charitable, however, and say it's 15% of Americans. What I'd like to know is the percentage of those persons - i.e., the Americans who can readily use mobile LBS services - who do so. If you frame it that way, the number likely looks quite a bit different.

It is true that this percentage does not seem to have grown since Pew last reported this number back in May, but one has to also know the growth of GPS-enabled phone ownership over that period of time to understand that trend. It is also true that it is possible to use location-based sites and services without at least GPS-A functionality (by manually reporting location, perhaps, or by checking in via a browser), but again - we don't know how many people do that, either.

I'm not sold myself on LBS becoming ubiquitous - but the cap on this number currently is not the number of online adults, which the reporting all seems to be based to, but the number of Americans who are actually able to "check in" to an out-of-home location. This is the number we don't know, but should, before we sound the death knell of LBS.

Why A Closed Location-Based System Has Value

Added on by Tom Webster.

I suspect this post may be a little controversial, but here goes. facebook_places.jpgNow that Facebook has implemented Places - and putative location-based rivals Foursquare and Gowalla have "partnered" with them - the tech pundits have all jumped in to proclaim that location-based data is here to stay. There is a key difference between "checking in" on Foursquare and broadcasting your location on Facebook, however. If you are a Foursquare member, you joined it specifically to broadcast your location, earn badges and score a few dubious mayorships. The very fact that you signed up is the implicit signal of your desire to broadcast your location-based data.

That's not why nearly half of online Americans joined Facebook however. That's right, nearly 1 in 2 online Americans have a Facebook page - your sister, your mother, your boss and your ex. They didn't sign up for "Places" - and they didn't ask for it either. Make no mistake - the addition of location-based data was not a customer-focused addition. Though location-based services are popular amongst the twittering classes, the vast middle of the bell curve did not ask for this function, and if it were carefully explained to them, don't want it, either. It was added purely for Facebook's benefit, to generate data for advertising purposes, but was certainly not added for your benefit.

Wayne Sutton has helpfully provided six steps to change your privacy settings to ensure your location data is private, but I submit that this is five steps too many. Facebook is America's home page - the Wal-Mart, or Target, of online activities. The vast majority of users are simply not aware of all of Facebook's privacy implications, and Places has kicked us all a little further down the slippery slope that the new "Like" button started. Let's be clear - if your current privacy settings are set to allow "everyone" to see some aspect of your data, you are, by default, set to allow everyone to see your location data - and to allow "friends" to check you in to places without your knowledge. There are other privacy implications, as well, some of which are detailed on this helpfully scary page.

I can guarantee you, your mom doesn't want this. If you are the parent of a child with a Facebook page (almost all online teens have one), you don't want this either. If Facebook were to provide a pop-up for everyone when they next log in that carefully explained Places, and provided a big red "opt out" button, let me assure you that most Facebook users would click it. But, again, Facebook is not a user-centered enterprise, and their convoluted privacy scheme for Places is but one in a long line of goalpost-moving assaults on the data of your life.

Yet, there is a value for consumers in an opt-in, location-based service to express loyalty, have that loyalty rewarded, and build a relationship with advertisers of products and services that are meaningful. I've written before ("Antisocial Location Apps") that I want to check into Nordstrom, express my loyalty, and learn about discounts and sales. I want to check into my favorite coffee place because I love them and want them to flourish. I just don't necessarily want this to be a public transaction. Conventional wisdom is that open systems thrive, while closed systems die on the vine - that's why the Foursquares and Gowallas of the world jumped quickly to integrate with Facebook's "Open" Graph. Ironically, many of the same people who evangelize open systems and transparency are doing so on Apple products - the very paragon of a closed ecosystem. I can't help but wonder here if the Apple way - the "safe," controlled entry into the world of location-based apps and services, might not be the better way forward for mainstream Americans.

Some have posited that Facebook's Places move will obviate the need for Foursquare and Gowalla, putting them out of business. Perhaps, but I can't help but wonder if "joining" Facebook is the only alternative to "not beating" them. Here in the Triangle area of North Carolina, we have a vibrant location-based startup called TriOut that is making all kinds of moves to connect local residents with local businesses. Not that they asked, but if I were to give them some advice it would be this - in the long run, mainstream America is going to figure out location-based social data, and is going to pass some kind of judgement upon it. The natural result will be some kind of change in how location-based apps do business.

If I were starting a location-based social network as a play for local advertising dollars, I'd anticipate those changes, and position myself now not as an openly-integrated Facebook partner, but as a private way for middle-of-the-bell-curve Americans to learn about discounts, sales and promotions from their favorite local vendors. I'd worry less about badges and letting my "friends" tag me, and more about security, logistics and fulfillment for local promotions. I would not integrate with Facebook, and I would make that a selling point. The flying monkey hooligan tribe might reject your offering, but your Uncle Bob might find it appealing for the same reasons.

In other words, I'd let Facebook warm up the market for you - and let them take the privacy heat that is sure to come - while you build your brand now as a customer-centric, private and secure way to make people's lives better without exposing private data.

What do you think? Am I misreading the general population? Would not integrating with Facebook be a death sentence for a would-be local service? Am I just a privacy Luddite, clinging to the last desperate illusion that my data belongs to me? I'm wide open to debate here, so let's kick things off in the comments.