The purpose of this post is to provide ideas on how Microsoft can leverage the powering of streaming (xCloud) to gain access to the two billion gamer who game on mobile, tablet devices or other devices.
Mobile Gaming and its Significance
According to a report published by newzoo.com mobile gaming represented 18% of total gaming revenue in 2012, by 2014 it had grown grew to 34%. Mobile gaming revenue is estimated to represent $70.3 billion in 2018 nearly double console game revenue in the same year.
According to a report by limelight.com gamers play on average 5.96 hours per week with mobile devices globally being the predominate device of play.
Gaining Traction in the Mobile Space
As the market is moving toward mobile gaming, companies like Sony, Google and according to rumours Amazon and Verizon are all investing in game streaming technology. Microsoft could take a number of different paths to gain traction within the mobile gaming space that include:
Microsoft could produce games on Android and iOS, an example of this would be Gears Pop.
Become a platform holder, the Microsoft Phones was an example of this position.
Providing services to the mobile space. Services like Azure, Xbox live or the Havoc engine can be used my mobile game developers.
Provide a cloud gaming platform that runs on mobile devices. Microsoft Project xCloud is an example of this.
What is Project xCloud?
At E3 2018, Phil Spencer Microsoft VP of gaming announced a cloud gaming/streaming project that Microsoft has been actively working on.
Project xCloud is enabling Console Native games to stream through our Azure-hosted game servers and streaming clients. Any Console Native game currently shipping in the Microsoft Store on Xbox will be capable of streaming to a mobile device. Project xCloud is an open platform with a customizable Client UX where streaming starts with Xbox game developers not having to modify a single line of existing game code. source
Competitor Space – Google Stadia
Google in March 2019 announced their cloud gaming platform – Google Stadia.
Engaging Mobile Gamers by leveraging Project xCloud
I am going to use the AIDA model developed by E. St. Elmo Lewis to illustrate how Microsoft could create engagement with gamers.
Introducing the Purchase Funnel – AIDA
The AIDA model is used to describe the steps or stages a consumer goes through to make a purchase. The stages are:
A – Awareness – the customer is aware of the existence of a product or service.
I – Interest – actively expressing an interest in a product group.
D – Desire – aspiring to a particular brand or product.
A – Action – taking the next step towards purchasing the chosen product.
Creating Awareness of Project xCloud – Gaming with You at the Centre
Using Google Trends comparing search volume for Google Stadia vs xCloud shows that Google achieved significantly more search volume/interest for the Google Stadia platform then Microsoft has for Project xCloud in the last 12 months.
Idea 1 – xCloud Event
Separate the presentation on Project xCloud from other Xbox announcements at E3. Have its own event, use a time to achieve maximum day coverage throughout the world. For example, 9am PST, is 12pm EST, 5pm GMT, 6pm CET, 9pm GST and 9pm IST. It may not need to be live or in front of an audience, reach is more important.
A separate event allows for breadth and depth within the presentation. Media can focus on reporting on xCloud, rather then juggle xCloud, new hardware, new studios, new IPs or in depth story about Halo/Gears of War.
A separate event also gives marketing an opportunity to build top of mind awareness for the event and project xCloud. The focus of the event should be:
Why game in the cloud?
What makes Microsoft solution unique?
What games do they expect to see?
What can they do to learn more about xCloud? Get an email address or a follow in Social Media.
The road map for the future i.e. what to expect.
Post event, measure online sentiment, search volume and ensure the conversation continues. Marketing tools such as YouTube Ads, Banner ads, ads over social media, press releases, exclusive interviews or outdoor advertising can be all used to keep the conversation going.
Idea 2 – Website
Searching on Google or Bing for the keyword ‘project x-cloud’ brings up a blog post from the Microsoft blog site and a news posts from the Xbox site in position 1 of the SERPs.
As of April 2019, I could not find a sub-domain or an entire site or a social media handle owned by Microsoft about Project X-Cloud. Having a website and being social activity has numerous benefits which are established and beyond the scope of this article.
Idea 3 – Mobile Game Discovery
A typical model for mobile gaming:
Discovery -> Download -> Play a freemium game -> Pay
What if we took a existing game or created a game title that was optimised for mobile devices (included touch control), wrapped it in an app and launched on the App Store. Optimise the app to rank within the store and marketing the game (banner advertising, influencers, reviews etc).
The marketing model would be:
Discovery -> Download -> Play for limited time -> Pay subscription for that title to unlock game.
Now that we have a paying user for single title, it would be all about upselling full access to xCloud or selling access to other games.
Creating Interest for xCloud
Awareness is the doorway to interest. The purpose of this section is to how to generate interest for xCloud.
Idea 1 – Demos and Previews
Let users see the technology running on their devices. This will allow them to actualise what is possible. Give access to press, influencers to generate reach and hype and then the general public.
Idea 2 – Hands on Events
Organise hands on event in major cities. This will allow users to try the technology and help maintain top of the mind awareness.
Idea 3 – Content Marketing
Using different content types (audio/video, written, visual, Q&A) develop material on the following areas:
What is Cloud Gaming?
How does it work?
Will it work on my Internet connection? (Giving the ability to test)
Can I play whilst I am travelling?
What do I need to play? And how do I sign up?
Which devices will it work on?
Is it safe for my children to play and how do I ensure they remain safe online?
Can I play on my TV?
Can I play co-op?
What kind of games can I play?
The cost of freemium games vs xCloud.
How much does it cost?
The purpose of this section is to provide recommendations to help create desire for xCloud.
Idea 1 – Leveraging Existing Titles
Take a popular mobile game and develop and optimise for the xCloud. This could be improved AI, better graphics, the removal of freemium content, new and unique content or improved multiplayer/co-op options.
Idea 2 – Cost Calculator
Playing a AAA games at its highest fidelity requires investment, especially if you looking to play it on a PC. Over time additional investment will be required. Having a simple cost saving calculator showing how much money will be saved over time will help build desire, Also including other benefits to cloud gaming e.g. time to install, hardware scaling to meeting the demand of developers, freedom to choose where and how you play will also help.
Idea 3 – Playing Together
Gaming can be very social. Make it easy for users in a single location to share a device eg a 4K TV, tablet (e.g. split screen gaming), allow users including guests to drop in with a simple sign in process so they can play together. Save the set-up to make it easy to replicate in the future. Taking this a step further; based upon the users and the location recommend which games to play, pick up from a previous game played game, keep score on a leader board, create videos of key moments to share (scoring a goal or point in a sports game).
Idea 4 – Game Challenges
Allow gamers and game manufacturer to set up unique challenges to test the players skills or for fun by sharing a link to a game in play. For example having a baseball game in the last round when you team is down, or a fighting an end of level boss whose difficulties has been tweaked. The idea is to take an existing game and extend the experience for players.
Idea 5 – Game Demos
For an Xbox player having the ability to demo a game on the cloud before buying the physically or digitally helps achieve two things:
Help the user make an informed decision about the game.
Let a user experience the benefits of cloud gaming.
Idea 6 – USPs, IPs and Gaming Franchises
When consumers have the option to choose from multiple different cloud gaming services, every distinguishing factor can lead to a competitive advantage for one service over another. There is no doubt a soccer game like Fifa will be incredibly popular on the cloud especially if cross-play is supported, but in many ways seen as must have. An exclusive game can be seen to an competitive advantage as it helps create desire.
Some gamers would be interested in Marvel games, some would want remakes or sequels, some new IPs and others new experience that could only be possible due to the power of the cloud. It is all about understanding what consumers are looking for and providing titles to match that desire.
Like the stock market you make an investment today with the belief that tomorrow would be even more bountiful. A platform like xCloud needs a strong catalogue of games across the various genres, a transparent pipeline for games in the short term and an understanding of the road map for the future.
Idea 7 – New Types of Games
Taking this genre of games further. Subscription services offers a way to fund games that may not exist in the freemium or the outright purchase model. Cross referencing games that are played vs the audiences that play them could reveal genres that need to be strengthened or types of games that should exist. This insight can then be used to build games that may not exist without a subscription model. Educational games could be one example of this.
Idea 8 – Social Media
With user consent show which xCloud games are popular amongst your friends on social media. It could as simple, your friend X is playing Y would you like to join them? Make it easy for them to try a game.
Idea 9 – Make it Easy to Set Up
One of the use cases for xCloud is to be able to game on a home television without the need of a console. From a user perspective the application should be readily available on Smart TVs, TV dongles or Android boxes. From a marketing perspective is all about convey how easy it is to get up and running.
The purpose of the final section is to look at ideas on how to move the users from desire to taking action. Taking action is to provide a compelling reason to buy and removing any lingering doubts.
Idea 1 – Tailoring the Offer
Not one shoe size fits all. Some users would require a free trail, other a heavy discounted first month, others a discount over a longer period. Some would only want to pay when they play (pay per day), others monthly, other quarterly/yearly. It is all about testing and giving a user the ability to build a bundle that works for them. At the same time, it is important to consider that too many options can lead to confusion which reduces the chance of a sale.
Idea 2 – Bundling Offers
Bundling or providing offers are a great way to provide value to a potential customer and adds additional leverage to help acquire a paying customer. Examples could include:
Buy 12 months of xCloud and get a free digital Xbox game worth $60
Buy the Deluxe of a game and get 3 months of xCloud.
Gift a month of XCloud to a friend and receive a month for free.
Buy 6 month of xCloud get 6 months of Xbox Live for free.
Buy a game and get the xCloud edition of the game for free.
Idea 3 – Set up costs
Owning an Xbox controller could be a barrier to signing up. It could be the price of a controller or the size of the controller relative the size of a mobile phone. Including the cost of the controller within the monthly fee of xCloud or offer a 50% discount on a controller from Xbox Design Lab could help the cost more attractive to a potential xCloud user. Having a smaller Xbox controller may appeal to some users as it will be easier to carry and use whilst travelling.
Idea 4 – Mobile Data
Playing on the go using a mobile network will consume data from the user’s phone package. Build relationships with mobile phone networks to provide uncapped data on mobile phones for gaming on xCloud. This will help remove a barrier to entry.
I have outlined a number of different strategies that can be employed to help Microsoft grow the user base for xCloud. With every idea it is all about testing and taking the learning to iteratively improve.
Running a business has always been a challenge and especially today with all the possibilities and challenges that globalisation creates. Businesses can run 24/7, 365 days a year so having real time or near real time data helps in decision making, but the number of different metrics available can make it difficult to decide what to optimise for. Should it be revenue? Repeat business? Time spent of Site? Facebook Likes?
Optimising for some KPIs may have little to no impact on the success of the business. Sometimes different departments within a company may choose different KPIs to optimise for, but these departmental KPIs could negatively impact other departments. Simplifying metrics and creating an overarching metric not only makes decision making easier, it also help focus a company in a single direction. This is where the idea of a North Star Metric comes in.
Product Core Value and an ‘a-ha’ moment
An ‘a-ha’ moment is a moment of sudden realization, inspiration, insight or comprehension, when something was unclear or uncertain becomes clear, we call that an ‘a-ha’ moment. For example, when a customer realizes that your product resolves a problem that they are facing they have an ‘a-ha’ moment, they see can see how the core value of a product helps resolve their problem.
To illustrate with an example let’s take a look at Instagram.
Once the founders identified Burbn/Instagram would be all about photographs, they removed all other functions in the app. Photo and photo sharing became the core value of the product. Instagram launched and within a few hours became the number app in the app store.
Imagine for example Instagram after becoming the number one photo app focused on generating revenue rather than optimising and improving its core product, would it still exist today? This is where the idea of a North Star Metric comes in; it focuses a company to optimise their core value over any other priority. Businesses which optimise for their core value have great customer engagement, lower acquisition costs, higher retention rates and stronger referral rates.
What is a North Star Metric?
The North Star also known as Polaris sits almost directly about the North Pole. It isn’t the brightest star but before we had GPS or even road signs, the North Pole would be a reliable indicator of where North is, and once you know where North is you can calculate where South, East and West. Sailors or travellers once they located the North Star in the sky that could reach their destination safety.
The North Star Metric is a concept that has emerged from companies from Silicon Valley who invested in long term sustainable growth by creating and optimising that ‘a-ha’ moment with their customers. The North Star Metric is a single metric that focuses on the product’s core value. It defines the relationship between the customer problems that the product team is trying to solve (the ‘a-ha’ moment) and then the revenue that the business aims to generate by doing so. It has helped teams move beyond focusing on surface-level growth to long term customer growth as everyone and everything is focused on a single metric.
A North Star Metric may not be the flashiest number, nor is it a vanity metric, such as Facebook likes or Twitter followers. Getting one hundred new Twitter followers doesn’t equal growth. Likewise, focusing all your effort on a free trial signup, will not provide insight whether those people will actually use your product, or whether they’ll stick around when the free trial period has ended. North Star Metric is a leading (not lagging) indicator of a future business outcome that your company cares about.
What do you need a North Star Metric?
The North Star Metric provide three essential benefits.
It provides the company and its staff clarity and alignment on what needs to be optimised and what can be left alone.
It communicates in a simple single metric the progress of the product to the whole company.
It holds the company accountable to an outcome.
A north star metric should consist of 2 parts:
A statement of your product vision
A metric that serves as a key measure of your current product strategy.
Examples of North Star Metrics
Before we provide some guidance on how to define your own North Star Metrics I believe it would be beneficial to provide examples of different North Star Metrics.
Amplitude on their blog in an article called Product North Star Metric define their vision, their Key metric and North Star Metrics.
Core value: Connecting people who need a place with people who can host.
Core value: Facilitate the sharing of knowledge in the world.
North Star Metric = Number of questions answered.
Core value: Online shopping made easy.
North Star Metric = Sales
Core Value: Where people share ideas and stories.
North Star Metric: Total Time Reading.
Other examples of North Star Metrics include a real estate agent: number of open houses, restaurant: average meal check size, or a car salesman with number of test drives per day.
How do you define your own North Star Metric?
“Your product north star should be specific to your product and what your customers value.” Amplitude
To understand what your North Star Metric should be, look at how your product adds value to your customers. The data could be qualitative or quantitively. What is the one thing that they would miss the most if the product no longer existed?
Product Manager for Growth at GrowthHackers Hila Qu gives five points to keep in mind when selecting your North Star Metric:
The metric should be used to measure if a user has experienced the core value of your product.
It should reflect user’s engagement and activity level. The more they are engaged the higher the value, and vice versa.
It is the single metric needed to indicate that the business is heading in the right direction.
The metric should be easy to understand.
It may not be possible to have the perfect North Star Metric. What you are trying is to find here is a metric that makes the most sense for the entire business to focus on. It might take a few iterations to finally find the right one.
Areas of the business that can help define what the North Star Metric could be, can come from the customers, the customer service team, the sales teams, analytics, marketing material or even a competitor.
When looking for a North Star Metric it should be the focal point of the business, a statement of your product vision, a persistent metric for real growth opposite to a vanity metric.
Customer retention refers to the ability of a company to retain its paying customers who continue to buy over a specified time period.
Why is customer retention important?
According to a data by KPMG in 2014 a survey of 100 senior US retail executives revealed that customer retention will be the most significant retail revenue driver in next 12 to 36 months.
According to Econsultancy, 70% of respondents from a cross channel marketing report believed it was cheaper to retain then acquire a customer.
A retained and happy customer is more likely to refer other customers to the business, increasing the customer base and further grow the business.
What can we do drive customer retention?
According to a report from RightNow Technologies, 89% of customers begin doing business with a competitor following a poor customer experience. Take the afternoon and sit and listen to the customer calls, read customer emails or visit online review sites that talk about your brand. Make a list of common problems and score them on the impact on the business and the amount of effort required to fix it. Find the sweet spot where effort to resolve the issue is minimal and the impact is greatest, and go resolve those issues or begin the process to resolve them.
Transpomo emails come from the terms transactional and promotional. A transpomo email is when a promotion piggybacks on an existing transactional emails such as order confirmation, shipping confirmation or your account has been created email. Transactional emails have the highest open rates, so it makes sense to piggy back of these.
If you already do transpomo review the results. What can be improved? Can you create a schedule to promote specific events or products. For example in June you could have a banner for the Summer sale, in November Black Friday. Or add a special offer.
If you do not do transpomo email, create a offer banner and get it added to a transactional email and test.
Leverage customer feedback (good and bad). Once a order has been shipping, it is common to ask the customer to leave a review. If the review is positive, send a follow up offer. It could a store wide percentage discount, money off discount, a promotion for a related product or a promotion for a popular product.
If the review is negative, get the customer service team to follow up with the customer to resolve any issues they may have. Once the customer is happy, give them a special discount for their next purchase.
What can be done on a Friday afternoon? You can place an order, follow the process and see what happens over the coming days, arrange a meeting between customer service and marketing or put a plan together how you think it should work and how it can be tested. A simple hack could be to take customers from both pools (those who left a positive review and those who left a negative review but have had their issue resolved) and send out an offer. Measure the uptake on the offer. Test different offers to see what works best.
Provide incentives for the second purchase. Once a customer has made their first purchase it is common to treat the customer no different from a loyal customer who has bought several times from your business. For a first time purchaser, give them the opportunity to leave more about your company, what makes your company special or the values that the company believe in. It could involve giving them a free gift on their second purchase, free delivery/shipping on their next order or a free upgrade. Spend the afternoon defining what you could offer and a way to test to determine the most popular offer.
Social media and TOMA (Top of Mind Awareness). Being in regular communication with your first time purchasers helps develop TOMA, which increases the possibility of a second purchase. A first time purchaser may follow a brand over social media for different reasons (latest offers, for fun, new products or to communicate with the brand). Check if you have a program to introduce social to you first time purchasers. If you don’t, spend Friday afternoon developing a plan how you will to connect to first time purchasers and how it can be tested. Look for a quick and an easy way to test the impact of social on first time purchasers.
Subscription Service. A subscription service allows a customer to select a product and determine how often they want to receive it. The benefit to the customer is convenience and knowing it is less likely to run out. Examples of subscription services include contact lenses, food or beauty products. Not all products lend themselves well for a subscription but being able to identify the rights one can lead customer going from single time purchasers to multiple time purchasers. Spend Friday afternoon identifying what product you can currently sell that could be sold on a subscription service or new products that be sold. Find a quick way to test it (having a product page with the option to sign up to a subscription, just a banner advertising the service and monitor the clicks).
Packaging Insert program. An insert program can be a discount offer, it could include a product sample, a small gift like sweets, a thank you card or a request to share on social media . Creating a delight or surprise with a first-time purchaser can help to generate that second sell. Spend Friday afternoon defining what are the possible options you can test in an insert program.
Loyalty program. Loyalty programs not only can help achieve that second sell, it can also help strengthen the brand affinity and build long term benefits. Make a list of all the loyalty programs that the people in office subscribe to. Identify the characteristics of the most popular programs and how they could relate to your ebusiness. Once you have some ideas run them by the team. See what resonates and develop a way to test it out. For a hack, invite a handful of customers into you office on a Friday afternoon and walk through each of the offers. See which one is most popular and why.
Complimentary products campaign. If I have purchased a pair of jeans, a pair of trainers, an iPhone over an Android device or a book there will be a complimentary good or goods that a customer could be interested in buying. Look at what your competitors offer and compare to your offering for your top selling products. Do you see a gap? Is there something you could add to your product category? Is there something that could differentiate from your competitors? Make a list. Also make a list of how you target these customers? In basket as a cross sell? On the order confirmation page? As a transpomo email? An offer email? Paid social? For a hack, if you have a customer service team who take phone orders, test different complimentary offers when customers call to place an order.
CRMs have a wealth of customer insight if you ask the right questions. For example, what can you learn about your loyal customers that could be applied to first time purchasers? On a Friday afternoon make a list of open ended questions that help you determine the key characteristics of a loyal and regular customer. For example, what are the commonly purchased products for loyal customers versus those single time purchasers. What is the average frequency of purchase for loyal customers? What was the time gap between the first and second purchase? Did they full price for the second purchase or was it discounted? Did they purchased through an offer on email or social? For a hack, if you know which products are commonly purchased by loyal customers determine which ones can be tested over email on first time purchasers. Put together a test plan.
“The world is being re-shaped by the convergence of social, mobile, cloud, big data, community and other powerful forces. The combination of these technologies unlocks an incredible opportunity to connect everything together in a new way and is dramatically trnsforming the way we live and work.” Marc Benioff
The focus of this article is to suggest how we can utilise the convergence between social, mobile, big data, AI and community to build a more profound and deeper user experience. The article will look at the purchase funnel, the impact of the Internet on the flow of information, a strategic model for Microsoft and then propose ideas on how to improve the user experience.
The Purchase Funnel – AIDA
The Purchase Funnel was developed by St. Elmo Lewis in 1898. It is a consumer-focused marketing model that illustrates the theoretical journey that a customer takes towards the purchase of a product or service.
AIDA stands for:
Awareness (A) – the customer is aware of the existence of a product or service.
Interest (I) – the customer expresses an interest in the product or service.
Desire (D) – the customer aspires to own that product or service.
Action (A) – taking an action towards purchasing the product or service.
If there is no awareness of a product there cannot be an interest in the product. Without interest, there is no desire to buy, and without desire, no purchase will be made.
If we can optimise awareness, for example, running a banner campaign introducing a new game, we get visitors into the funnel. If the visitors watch a video or read an article about the new game we can generate interest. We can then run a retargeting campaign over social, web or in-app to generate desire. Once we have desire we can follow up with a direct response campaign to lead to a sale.
Before the Internet
Before the Internet, if you wanted to learn something you would attend a lesson, read a book, visit the library, buy a magazine or talk to someone. Yes, in those day people used to talk.
If you wanted to know about a video game you would buy a computer magazine. Information flowed from the software houses to the magazine writers and then to us, the readers. The information was managed, controlled and in one direction.
The dawn of the Internet
The Internet allowed information to flow in real time to anywhere in the world. Search Engines like Google and Bing crawled the Internet to discover new information that could be accessed in the blink of an eye through a simple search.
Platforms like YouTube or microblogging sites like Twitter gave anyone the ability to express their opinion and be heard globally.
With the Internet, information became accessible for free, models for generating revenue for reporters had to change. One such model of generating revenue was the use of click bait. Click bait is content whose sole purpose is to attract attention and encourage visitors to click on a link. It is a form of journalism that presents little or no well-researched news, rather focuses on eye-catching headlines that exaggerate news events or to cause sensationalism. Katherine Viner, editor-in-chief at The Guardian wrote in How technology disrupted the truth, “chasing down cheap clicks at the expense of accuracy and veracity undermined the value of journalism and truth.” Journalism can take the backseat if it is more profitable to create sensation.
As humans, we all form opinions and they do not always agree with each other. When it is done in person it usually carries a level of understanding and respect. In the online world, someone can easily create an anonymous profile and troll someone else. So rather than encourage an environment of learning and respect it can lead to a witch hunt where differences of opinion is crushed or humiliated.
The Internet has provided gamers with the ability to access a wealth of information but can also contain elements of bias and the distortion of facts.
Starting with Why
Before we discuss how we can leverage the convergence of technology I believe it is important to have a framework or foundation for such a discussion. For this blog post, I intend to use the framework suggested by Simon Sinek in Starting With Why.
The Ted Talk by Simon Senek was published in September 2009 and is the 3rd most watched Ted Talk of all time.
Some organisations and people are more innovative, generate more profit, are able to retain customers and staff longer than other organisations, but why? According to Simon Sinek the way they think, act, and communicate are in line with each and the opposite of what everyone else does. Most leaders talk about WHAT they do – the products or services that generate money. Some leaders talk about the HOW – the process they use that differentiate themselves. Very few leaders talk about (or even know) their WHY – the reason the business exists in the first place (money is a by-product of the WHY).
Simon Sinek argues that when we start with WHY in everything that we do, we inspire action in a way that WHAT does not. That is because WHY engages our emotions, while WHAT engages our logical brain.
As an example, which of these statements is more compelling:
I write code (the WHAT)
I create magical gaming worlds (the WHY)
If you want to inspire others, always communicate your why first. If the why resonates with them, they will be inspired. Simon Sinek said, “people don’t buy what you do; they buy why you do it.” Employees who are inspired by the why are the best resource for any business.
Benefits of Starting with Why?
Organisations live or die by their culture. A toxic culture eventually kills the organisation, the confused culture is like taking two steps forward and one step back. A culture based on a Why where the employees rally around it would lead to several benefits.
Speed– Every decision can be seen in the light of whether it is in line with the objective of the organisation or not. This makes it quicker to make decisions and decision making can be decentralised.
Direction– Everyone within the organisation knows the direction the company is headed towards.
Motivation– If an employee believes and is motivated by the company’s Why they will be more motivated then somebody who is motivated to make money.
Trust– A leader of an organisation whose actions are in line with the Why will generate trust amongst their employees.
Recruitment & Retention – Everyone is passionate about something but we are not all passionate about the same thing. When an organisation takes a stance, and defines its Why some people will be attracted towards that organisation whilst other will not. Those who are attracted will both want to work for the company and want to stay with the company longer.
The External Benefits to Microsoft include:
Microsoft, Nintendo and Sony all make consoles to play video games. Demand is influenced by changing prices, improving technology or adding exclusives. Having an identity (the Why) that resonates with gamers can be a more significant factor in the purchasing decision than price, technology and exclusives.
Starting with a Why establishes trust. If someone trusts a brand they are more confident to invest more time and money with Microsoft.
A mistake or an error of judgment by Microsoft is more likely to be forgiven and forgotten.
Brand advocates. A company with a Why is likely to have a greater number of promoters. And a promoter has two distinct benefits. They can take a detractor and help them so they become either passive or a promoter. Or they can help attract new customers to the brand.
Millennials and identity- By 2015 the millennials became the largest generation in America overtaking the baby boomers.
According to a blog post from Oracle by Michael Svatek, “millennials are particular, easily distracted, and more demanding of brands than any other generation, that is, when they choose to engage with them.” Millennial marketing state over 50% of millennials would be more willing to make a purchase from a company if their company supports a cause, and brands that stand for more than their bottom line receive greater millennial brand love. By Microsoft having a Why it stands a greater chance to be relevant and engaging with a millennial.
Does Xbox need to have a separate Why to Microsoft?
I believe Xbox should share the same Why with Microsoft for the following reasons:
As much as Microsoft Excel is a Microsoft product so is the Xbox. Brands need to speak one language and be consistent, so the customers will view all products as one.
Xbox does not work in a silo, resources sharing works better when the individual has a single and unified direction.
Both Xbox and Microsoft are in the technology business and bring people closer together, so it makes sense to have the same Why..
My Suggestion for a Possible Why?
This is my suggestion for a possible why:
We believe through technology we can bring the World closer together
Microsoft’s 5 key principles are:
Xbox’s 3 key principles are:
The Xbox App: the centre of the new AI, Social and Chat Bot Experience
The focus of this section is to show how the Xbox App can leverage AI, user content, user input, and Cortana to create a richer and deeper user experience. This will be highlighted in the following sections:
Guide a user through the pre-purchase funnel.
Setting up the Xbox for the first time.
Extend the current feature set of the Xbox app.
The history of the Xbox App
Xbox Smartglass was originally announced at the 2012 Electronic Entertainment Expo (E3). It was the second screen for the Xbox 360 promising ‘new ways to interact with your Xbox 360.’ With the release of the Xbox One it is simply known as the Xbox App.
The Second Screen – Discovering Together
Current scenario –If someone wants to learn about the Xbox, they can ask their friends, do a search on Google/Bing, read a review on Amazon or search in social media/YouTube. There is no doubt there are lot of positive reviews, comments, videos, and tweets on Xbox but at the same time there is a lot of content that would create FUD (Fear, Uncertainty or Doubt), and for every positive Xbox story, there is going to be another that is negative.
Proposed solution – to create an environment where a user can learn more about the Xbox One console and its family. Using an app, we can integrate analytics, a chatbot to respond to user queries and AI to deliver a highly tailored experience (Discover Together).
Pre-purchase Funnel – DiscoverTogether
In this section, we are going to assume we have a user who is interested in purchasing the Xbox One and has installed the Xbox One App.
Guiding a user through the pre-purchase funnel
Different ways people learn
Before jumping into the app and how we can apply the idea of Discover Together it is worth mentioning the different ways people learn:
Visual. Learning through diagrams, charts and watching videos.
Auditory. Learning by listening through audio files, live transmission or listening to a video.
Experiential. Learning through reflecting on doing. It is a form of active learning.
Kinesthetic. Learning by carrying out physical tasks.
Read/write learning. Learning by either reading or writing.
We should ensure as best as we can to cover as many content types as possible when we put together content for the Xbox App. These could include:
Ask questions (active learning)
Modelling and predicting the user’s journey
Bryan Eisenberg defines four different personality types:
To be inclusive the user journey must appeal to all four personality types, so, for example, we need pages that:
Have a call to action above the fold (competitive and spontaneous).
Talk about the benefits of the Xbox One (spontaneous and methodical).
Talk about the Why of Xbox e.g. Play Together (spontaneous and humanistic).
Have detailed specifications, FAQs, video, reviews etc. (methodical)
Data mining customer QAs and AI
There is over 16 years of queries from customers, retail, e-tail and online discussions. Compiling all the data together will help determine what are the common questions that a potential customer may have. These questions and answers can be incorporated into the Xbox App to help with the user journey.
Launching the Application
The more we learn about a user, the better we can tailor the experience. Putting too many hurdles in front of the user will result in frustration and then exiting the app prematurely. My suggestion is to ask three simple questions with the option to skip.
Question 1 (Yes, No)
Have you ever owned an Xbox?
Question 2 (Multiple Choice)
What is your prime reason to buy an Xbox?
The new Xbox One X
Playing online with friends
Playing Xbox exclusives
Looking for a gift for friends or family
Question 3 (Textbox)
What would you like to know about Xbox?
Taking the answers from these questions, we can build a personalised experience for that user. If I said I have owned an Xbox in the past, interested in buying the Xbox One X and wanted to know more about 4K games then an experience optimised for me would include content (video, text or auditory) that was centred around:
Xbox One X being the most powerful console
The 4K difference
Xbox One X building upon the Xbox heritage
The biggest franchises in 4K
Xbox live reimagined on Xbox One X
Xbox Game Pass, EA Access and Play Anywhere
If on the other hand, I said I have never owned an Xbox, am interested in playing online and wanted to know about which games I can play online, then an experienced optimised for me would include:
What makes the Xbox unique
An introduction to the Xbox family (S and X)
Xbox Live – the most powerful platform for online gaming
Play the best franchises on Xbox Live
Xbox Live and Games for Gold
Xbox Live in 2018
The home screen should contain the information that could encourage a spontaneous and competitive person to act.
Having integrating analytics would allow us to understand which content resonates (read or watched to the end, shared or upvoted) and which content does not. If I have a user who is interested in getting an Xbox to play Xbox Live who reads an article about Xbox Live – the most powerful platform for online gaming and then watches a video on Xbox Live in 2018, I could offer the user a bundle with an Xbox One and 12 month of Xbox Gold and EA Access to that user. As another example, if I know a user is interested in Xbox Live when they are reading an article on the Xbox Elite controller, there should be a section on how the elite controller is the best controller for online gaming. If they were interested in Fifa 2018 and read an article on the Xbox Elite controller, there should be a section on how the elite controller can be optimised for Fifa 2018.
In addition to answers from the user questions from the original survey, I envisage having multiple tabs with different themes. These could include:
An introduction to the Xbox family.
An introduction to Xbox Live and Xbox Gold.
Playing with younger children and safety online.
Exclusive Xbox games.
The best place to play multiplatform games.
What is 4K, HDR and Dolby Atmos?
Xbox Apps and non-gaming activities
Buying an Xbox
To take the interaction further, having a chatbot who can ask and answer questions could provide valuable insight to the user. For example, after reading an article or watching a video I have a chatbot asking me if I found the content useful and relevant?
If I answer Yes
The chatbot would suggest other relevant pieces of content. For example, if I watched a trailer for The Witcher it could recommend a video about The Witcher running on the Xbox One X and its improvements (especially if I stated I am interested in the Xbox One X) or similar games I may be interested in.
Taking this a stage further, if the Chatbot knows I am interested in Xbox One X, the Witcher in 4K and Rise of the Tomb Raider, it could create a special bundle of the fly and ask me:
Would you be interested in an Xbox One X, The Witcher and Rise of the Tomb Raider for a special price?
If I say yes, it then takes the user to a shopping basket and checkout.
If no, then it needs to understand what is missing – is it the price? The offer?
Use of Push notification
Buying an Xbox could be a single use of the app (competitive or spontaneous), but there are others who will use the app multiple times before deciding to buy an Xbox (humanistic or methodological). To encourage the user, we could use push notifications to highlight relevant pieces of content. The idea is to get the user to use the app on a regular basis to become more familiar with the Xbox.
Purchase and Set-up
In this section, we have assumed a user has now bought an Xbox One and our objective is to introduce the user to the Xbox family.
Setting up the Xbox
Setting up an Xbox for the first time and installing a game can be a long wait, anything we can do to make the experience more enjoyable will help.
As soon as the Xbox is on the local network (wireless or wired) it pairs with the Xbox App.
The Xbox App welcome the user to the Xbox family and explains what will happen next (updates, user account login etc.).
The App has a countdown timer and pushes notifications to tell you when the Xbox is ready. This gives freedom to the user to step away from the Xbox.
Any sort of text entry on Xbox can be done using the smartphone keyboard (much quicker than using a controller).
Once the dashboard is ready and the user is logged in. The next steps are all about welcoming the user to the Xbox family.
What We Want to Achieve
Help the user to connect with their friends and family.
Help the user to understand the benefit of Xbox Gold and sign up if they wish to.
Help the user to understand the benefit of Xbox Game Pass and sign up if they wish to.
Help the user to understand the benefit of EA Access and signs up if they wish to.
Help the user understand Xbox clubs and sign up for any relevant clubs.
If the user uses twitter ask them if they wish to connect to the Xbox Twitter Account of @xbox, @xboxuk, @xboxP3, @majornelson, @xboxqwik and @xboxSupport.
Ask the user if they are interested in subscribing to the Xbox YouTube channel.
Forcing a user to sign up to multiple accounts all at once may leave the user overwhelmed. If done gradually using the Xbox Dashboard, push notifications, emails and the Xbox App, there may be a higher chance of engagement and sign up. Taking inspiration from gamification and lead page generation it is all about getting the consent of the user and then rewarding their action.
We could build a program that starts with an email to introduce Xbox Gold – if they agree to learn more, the next time they open the Xbox App or play on the Xbox, they get the option to watch a video on the benefits of Gold. If they do not open the email, then we can use a push notification asking them if they would like to learn more about the benefits of Gold.
As another example, adding friends and family can be time-consuming, but we could leverage the Xbox app to search out friends and family from the phone contact list or social media. We could reward that action with a free 7-day extension to Xbox Gold once we get their consent.
We could use banner adverts within on the Xbox Dashboard or the app advertising the benefit to follow us on Twitter e.g. latest news or win a game of your choice.
What if we could recognise when a user has set up their Xbox for the first time, finished a game or had not played a game for a while and promoted Xbox Game Pass or EA Access through multi-touch points?
We could create an introductory series where each day the Xbox app has a new topic. Day 1 could be adding friends and family, day 2 the benefits of Gold. Opens, clicks and views could all be tracked and follow up emails and Xbox Dashboard banners can be used to facilitate action.
Extend the Current Feature Set of the Xbox app.
The purpose of this section is to suggest some additional features for users who have an Xbox One.
Idea Number 1 – The Second Screen
I am a great fan of watching E3 and Gamescom – what if the Microsoft event could support a second screen (the Xbox App)? Whilst a game is being presented on stage I could get extra information about the game, the ability to pre-order online, save the game in the recommended tab (more later) and the ability to share a screenshot or a trailer on social media.
Idea Number 2 – The Xbox Button
There is a game I really want to buy. I saw at E3 2017, it looks like Blade Runner but I have no idea what it is called or who is making it. I searched for ‘Blade Runner type game for Xbox One’ but I didn’t find anything. I searched on Twitter, I found a tweet that linked to a list of all E3 games on the Xbox news blog. I found the name of the name, but I, unfortunately, have already forgotten the name before I could pre-order it.
What if, whenever I come to an advert or a mention of the game, be that on YouTube, a web page, a live event, a billboard or TV advert, I press a button and the details of the game is stored. The game information can then be stored in the recommendations tab and updated whenever there is more information available (previews, pre-orders etc.)
Idea Number 3 – Email and In-App notification. Talk to me
I have been playing the Xbox since the original OG Xbox so there should be a lot of information about me:
What games do I own?
What games have I played?
Which games have I pre-ordered?
Which games did I get Day 1?
Which games do I buy on sale?
Which games have I finished?
Which games do I delete and which games I keep?
Do I buy digital or physical? Or do I buy both?
How often do I play?
For example, I own Forza Horizon 2 and Forza Horizon 3 but I do not own Forza Motorsport 7. I own Halo 1 all the way to Halo 5 but do not own Halo Wars 1 or 2. There is an opportunity to generate a multi-touch campaign around Forza Motorsport or Halo Wars. What if the game is discounted on the Christmas Sale, it could be beneficial to highlight this to me. What if I installed a demo of Forza Motorsport 7 but never played it? I could get an email about how Forza Motorsport takes what’s best about Forza Horizon 3 and improves on it. What if that email arrived on the day I am most likely to play on the Xbox?
With a little AI, my game preference can be figured out. Or a Chatbot can ask me what my favourite games of 2017 were.
This information can be used in the following ways:
Games that I have yet to buy but may have a potential interest in. Offer free play days, demos, discounted prices or bundle offers. Making it unique and personalised to me.
Games that are coming out soon, let me know the ones I would potentially be most interested in. Create anticipation and excitement.
Predict what type of games should be produced and when they should be released. With enough data and knowing the general schedule for other multiplatform and exclusive games, it should possible to predict the type of games people would want to play and when they would want to play it.
Idea Number 4 – what game should I buy?
There are Indie games, backwards compatible games, AA and AAA games, so sometimes it is easy to miss a game.
Ideas on recommending a game:
List the games my Xbox friends have played that I have not, ordered by popularity or review scores (recommendation tab).
Have Cortana predict what I want to play next or have a conversation with me (see below).
The recommended tab (see below)
The review tab (see below).
Idea Number 5 – Cortana and what game I should buy next?
Cortana or any AI agent is as good as the data available to it. If I ask what is the weather like today, the AI will check my IP address to determine where I am and return the weather in that area. Cortana, given the right level of permission and support from game developers, can easily build up a picture of my gaming preference.
Do I prefer single player games? Do I pay for DLC? Do I play at a professional level? Do I play multiplayer games? Have I watched, read or listened to any content of any upcoming game?
Cortana could ask, have you considered buying Mass Effect Andromeda (knowing that I like Sci-Fi games)? If I say no, the follow-up question is why? If I give a reason why, this information can be used to find a suitable piece of content to read or sent to the developer as feedback.
Cortana could inform me of the latest DLC for Destiny 2 either when I reach a certain point in the game or if I have stopped playing Destiny 2 to re-engage me.
Or I could tell Cortana I am a fan of Portal 2 or Capcom’s Power Stone therefore any game like these could be recommended even if it is two years in the future.
As a final example, I am a fan of Dishonoured but never really played Tom Clancy’s Splinter Cell. What if Cortana could create the association between the games and ask me if I am interested in Splinter Cell? And if said tell me more, it would show me a video, an article, a developer interview etc. If I showed interest, the Xbox backwards compatible team would be informed or even Ubisoft can be told.
Idea Number 6 – The Recommendation Tab and what game I should buy next?
Scenario – Knowing what game to play next can be difficult at times.
How to get games added to the recommendation tab?
Through the Xbox Button.
What my friends are playing or have played.
What information on the game should be available on the recommendation tab?
Video content (previews, reviews, behind the scenes)
Written articles about the game.
People playing the game on Mixer
Images of the game
A link to demo links if available.
How to buy?
What can I personalise?
Whether I am interested in that specific game or not
How much am I prepared to pay for it? if it reaches that price I will get an email, push notification or a dashboard notification.
Share the game details with a friend.
Idea Number 7 – The Review Tab and what game I should I buy next?
Scenario – Spending $60/£45 on a game is a risky affair for some and for others it is the opportunity cost of playing one game over another. What if I could find someone whose experience and taste in games was like mine and see how they feel about a game I am interested in?
Two possible ideas:
I build my own query i.e. I want to see a video review of Gears 4 from someone who prefers single player story games AND has completed all the other Gears games (including Judgment AND Gears of War Ultimate Edition) on the most difficult setting. (it is beyond the scope of this article on how we can generate user content, but I have a couple of ideas).
What if you took my preference in games, my Gamerscore and what I have unlocked and apply some AI and then look for similar patterns with other gamers/reviewers? Cortana could get my feedback on reviewers (things like watching the review from start to end, or whether I follow the reviewer or unfollow, comments left could all help to build up a picture of what I like) and then improve its recommendations based upon this. What if I could use the Xbox button to tag a reviewer on YouTube I like. Their content, assuming permission is granted, is now available for me for on the review tab. What if a friend of mine likes a specific reviewer – could that not be recommended to me as well?
Idea Number 8 – help me get into a game
Scenario – I buy a game based on hype e.g. it’s a Microsoft exclusive. I install it, play it for 5 minutes, get stuck/confused or face a bug then move onto another game.
Impact – The games developer and Microsoft have my money but the possibility of future investment including DLC or microtransactions is uncertain.
A possible solution – track where I have reached in a game, understand what achievements I have not unlocked (micro-conversions) and the time I have not played the game. If the time not played is above average or usual for my usual gaming preferences send me a notification (an email or Cortana asking me a question) guiding me on what to do next. Imagine a conversation with Cortana for example:
Cortana: What do you think of Destiny 2? (instead of Cortana asking me I see you have not played Destiny for 7 days, 8 hours and 10 seconds and did not pass the first mission, are you stuck?)
Me: This light score thing does not make sense to me.
Cortana: I know an excellent guide to light score in Destiny written by one of your favourite reviewers:
Me: Please show me.
The purpose of this section is to focus on playing together. Usually, when we talk about playing together we think about multiplayer games, but I want to focus on how we can play together on single player games.
Single Player Games
Why would we want to play together on a single player game?
Competitive – adding the element of competing against a friend can make the experience more enjoyable
Working with friends to get through a tough section of a game.
Competitive Single Player
A single player game is usually played by one person, so running a competition between friends is either ad-hoc or post-event. What if Xbox Live allowed developers to build competitive elements into the game with minimum effort? Microsoft would do the heavy lifting and the developer and ultimately the user would benefit. Every game is different but there are common features that could include:
Real-time updates when you are playing against a friend (they have just unlocked an achievement and you have this much left to do, they have 90% accuracy with a rifle vs your 72% accuracy with your rifle, you just defeated the boss, whilst they just died or they just unlocked a hidden feature which you have yet to find). The idea is having real-time updates so there is always competition. We can even take it a step further and set up tasks, the first person to defeat x number of zombies, or keep possession of the ball for more than a minute etc.
What about creating a video of shared gameplay e.g. this is me jumping and landing safety vs my friend falling off the cliff and falling to his doom.
End of level section updates compared to your friends. Your friend did this section in X minutes, 2 attempts and 4 headshots. Here is a video of them doing it.”
I am Stuck – Help Me Out
There are times when you are stuck in a game and do not know what to do next. Usually, that means figuring it out or leaving the game and finding a solution on YouTube or online. What if you could ask a friend? Xbox would need to be able to determine who could help me in my circle of friends and help me connect with them. Once connected I would want to share my screen and have the option for them to take over my game and either commit their action into my game (once they get through the bit I am stuck on) or let me redo it myself. I may want them to guide me on what to do, or I may want them to do it for me. The idea is I have the option.
Co-operative – Team Battle
Microsoft clubs are a great way to organise a meetup, but it does it still involve organising a number of people to agree a time to play together. What if we could add some AI with an understanding when I play and access to my diary/calendar? I can create a simple query:
I want to PLAY Halo 5 with my friends (A, B and C) Cortana to set TIME and DAY.
Cortana would have to understand my day/time preferences and my friend’s day/time preference, offer options that are localised to each user. For example, my friend A gets a notification: are you free to play Halo 5 on Friday night @ 11 pm GMT, B at Friday evening @ 6 pm EST and C @12pm CET. Once we have reached an agreement a calendar appointment is created and a reminder is set. Taking this a stage further, Cortana would have to manage cancellation, lateness and no-shows. For example, finding last-minute replacements if needed. By Cortana managing the event the gamers can focus on what they enjoy. Let’s say for example we agreed to play at 2 am – I would want Cortana to set my alarm on my iPhone just in case I fall asleep.
As another example I can ask Cortana who can I game with now? Cortana would understand who I game with usually and who is online now. It could send invites for me and provide options of what to play. I could be on the bus and be asked, would I be free at 8pm to play with X, they are interested in playing Destiny 2 or COD.
Who can I challenge? Getting better at gaming
To improve your skills involves playing people who are better than you, so they stretch your capability. We could analyse user performance on a game to create a global ranking system. For example, I want to get better at Killer Instinct, I would want to be able to identify who would be the best people to play based upon the characters I use or the experience I want to gain (I want to practise fighting against Character X). It would return a list of users and invite them to play Killer Instinct even if they are playing a different game at that time.
By having a ranking system, you have regional champions, for example being the best Killer Instinct player in London. Having such an award and the ability to defend it would take the game to another level.
Watching a movie or a TV show can be a solo experience or at least shared with the people in the same physical location as you. What if you could watch a movie or TV show with friends at the same time but in different locations?
Examples of how it would work
I rent a movie from Xbox with the option to allow for one or more of my friends to watch it at the same time as me. I pay a higher price (but still lower than each one of us renting it), but can share the payment between the users and we can watch the movie at the same time.
Xbox could then facilitate text chat on screen or in the app or allow us talk to each other. The idea is to allow people even if they are 1000s of miles away to share the experience of the movie/show together. Taking it a stage further what if you could add gameshow/quiz elements during or post the show or movie?
I really hope you have enjoyed reading this article and found at least some of the ideas useful. If you want to discuss this with me further, please drop me an email, leave a comment or DM me on Twitter.
It may just be me, but there are times when I look at Google Analytics or look at an A/B test and the page in question does not convert. So I rack my brain looking for ideas, the page loads fast on a mobile device, the call to action is clear and above the fold, the audience is relevant but no one wants to buy. I Google, I look at competitor sites and I even consider changing the colour of the button but nothing seems to works.
Then one bright sunny day (ok it wasn’t that sunny or that bright) something changed. A clever algorithm recommended that I buy a book. Not just any book but a book that The Economist reviewed as:
“Profound . . . As Copernicus removed the Earth from the centre of the universe and Darwin knocked humans off their biological perch, Mr Kahneman has shown that we are not the paragons of reason we assume ourselves to be (The Economist)
The book is called Thinking, Fast and Slow by Daniel Kahneman
Before I explain the link between the book Thinking, Fast and Slow and why visitors may not convert, we should first discuss how classical economics views the rational man.
Homo economicus, or the economic man, is the concept found in economic theories that portray humans as rational and narrowly self-interested/self-focused agents who pursue their subjectively defined ends optimally. If any decision is sub-optimal then over time, the economic man will learn from his mistake and choose better. In other words, humans are intelligent and self-benefit focused.
How to sell to Homo Economicus
If Homo Economicus are rationally motivated, then the following factors will impact conversion:
Price – the lower the price or the bigger the discount, the higher the demand for a product.
Quality – if the quality of a product is better then a competitor’s product it will sell more.
The greater the features or benefits that a product has, the more it will sell.
Delivery – if delivery is fast and reliable, it will sell more.
Introducing Behavioural Economics
Behavioural economics postulates the idea that man makes ‘irrational’ decisions because they are influenced by psychological, social, cognitive, and emotional factors. Behavioural economics is therefore primarily concerned with the limits of the rationality of economic agents.
There are three prevalent themes in behavioural economics:
Heuristics (is a mental short cut to problem-solving or learning that not guaranteed to be optimal based on previous experience): Humans make 95% of their decisions using mental shortcuts or rules of thumb.
Framing: The collection of anecdotes and stereotypes that make up the mental emotional filters individuals rely on to understand and respond to events.
Market inefficiencies: These include mispricing and non-rational decision making.
Introducing Thinking, Fast and Slow
In 2011 Nobel Memorial Prize Daniel Kahneman published the best sellerThinking, Fast and Slow. It was winner of the 2012 National Academics Communication Award for best creative work that helps the public understand science, engineering or medicine.
A Summary of the principles within the Thinking Fast and Slow
There are two different systems for thinking. Daniel Kahneman called them System 1 and System 2. Each has their own unique characteristics and each has unique advantages and disadvantages.
Automatic System – is a fast, automatic response system based on intuition, past experiences and it is commonly impulsive. It’s the decision making and recognition you do every waking moment, even though you may not be aware of it. System 1 drives your car while your thoughts wander. It’s how you recognise a friend’s face from afar in a crowd. System 1 is effortless in its management of these tasks. Other examples include:
Locate the source of a specific piece of sound.
Determine which one of two objects is further away.
Answer questions based upon memory e.g. 8 times 5 is 30 (eight fives are thirty).
Read a car number plate.
Understand simple sentences.
The Effortful System – is slow, calculating, takes energy, factors in restraint over impulse. System 2 is what we call deep thinking or mathematical calculations. System 2, corresponds to our idea of rational reasoning, it is slow, deliberative and effortful.
Daniel Kahneman has said, “thinking is to humans as swimming is to cats; they can do it but they’d prefer not to.” Humans default to using System 1 over System 2 as it requires less effort and energy.
A human may believe that they have made a rational decision but often, the conscious mind is merely post-rationalising decisions that have already been made using System 1. This can be a problem if you are trying to understand why your customers took a certain action as they don’t have full introspective insight into their decision making process and what they claim motivated them to take action could be inaccurate.
Illogical decisions can occur choosing System 1 over System 2 or vice versa.
Heuristics – are simple, efficient rules which people use to form judgments and make decisions. They are shortcuts that usually involve focusing on one aspect of a complex problem and ignoring other aspects. System 1 thinking associates that aspect to an existing pattern or thought rather than develop a new pattern for a new experience. An example of this would be to consider every tool in a tool box to be a hammer because they all have flat edges. The resulting errors are known as cognitive biases.
Anchoring – influenced by irrelevant numbers. Most people, when asked if took over 200 litres to fill a bathtub would give a much larger estimate than those who were asked if would take over 35 litres of water.
Availability – judging the probability of something occurring based on how easy it is to think of examples of it. In other words, the easier it is to recall the consequences of something, the greater we perceive these consequences to be. If someone has read news reports of a recent fire, they are more likely to believe a fire will occur then a flood.
Substitution – if you were to be asked the question, “how popular will the Fidget Spinners be six months from now?” You may have thought about it, you may have even researched into the topic, but usually, an answer will appear in your mind straight away. Even though there are uncertainties about the future and without considering them at length, you have reached a conclusion. What has happened is you have substituted the question to how popular is the Fidget Spinner today?
Optimism and Loss Aversion – this bias generates the idea that we have substantial control in our lives. That is, people overestimate their ability to control events and dismiss the chance of loss. System 1 also responds more strongly to losses than to gains. This is called loss aversion. For example, losing a penny/cent is more important than gaining a penny/cent.
Framing – involves processing the same piece of information in different ways, depending upon the context it was presented in e.g. as a loss or a gain. Amos Tversky and Daniel Kahneman explored how different phrasing affected participants’ responses to a choice in a hypothetical life and death situation.
Participants were asked to choose between two treatments for 600 people affected by a deadly disease. Treatment A was predicted to result in 400 deaths, whereas treatment B had a 33% chance that no one would die but a 66% chance that everyone would die. This choice was then presented to participants either with positive framing, i.e. how many people would live or with negative framing, i.e. how many people would die.
Treatment A was chosen by 72% of participants when it was presented with positive framing (“saves 200 lives”) dropping to only 22% when the same choice was presented with negative framing (“400 people will die”).
Sunk Cost – throwing good money/time/effort after bad, because of the belief that one is already too committed at this point to change direction.
How to apply the lessons of Thinking Fast and Slow to m-commerce
Don’t make me think – use simple language and keep things easy to understand. Less mental effort means greater buy in.
Don’t confuse me – confusion leads to doubt and doubt requires System 2 thinking to resolve. So rather than resolve the confusion, a visitor may visit a competitor site.
Don’t make me speculate – if I have a question about a product, I know I have to put effort in to find the answer, so it may be easier to go to a competitor site. Ensure all relevant information about the product is available and easily accessible.
Giving too many options – have multiple options on a product page can lead a drop in revenue, as choice requires System 2 thinking. Reducing the options available can lead to an increase in conversion rate as the decision is easier. Taking this a step further, offering upsells and cross-sells is a way to increase the value of the basket (AOV). Test to see if conversion rate improves by reducing the number of options in the cross and upsell or eliminating it completely.
Running limited offers can lead to impulse buys. Many people do not like losing out on an opportunity to save money. You can tap into their FOMO (Fear of Missing Out). Voucher codes with expiration dates also tap into user emotions of FOMO. Daniel Kahneman writes about Loss Aversion and how the fear of loss is a much stronger driving force in human behaviour than the evaluation of gain and this can lead to irrational behaviour.
Consider limiting product availability. Both McDonalds and Nintendo do this.
Providing solutions to problems that are currently trending – these are more likely to sell than solutions to problems that are less known about.
If selling a product requires thinking, simplify it. Uber simplified moving from A to B.
If there is uncertainty buying a product (will it be suitable?), leverage trust. Providing expert advice, independent reviews or being in the field for many years builds trust. Generating trust reduces the need for System 2 thinking. In order to build trust in their products, Zappos use 365-day return to eliminate the fear that the shoes they sell may not fit.
If you found this article useful, please share it. Every tweet, every post and every link helps 🙂
The purpose of this article is to look at the how we can create emails that convert whilst on the go, in the bathroom or in bed. Sometimes it is easy to forget an email which you spent days creating can be simply ignored or deleted because of a football match or the constant message notifications being delivered.
Before we look at strategies to get the conversion on a mobile device it would be beneficial to state some facts on email marketing.
Facts on email marketing:
Email remains a significantly more effective way to acquire customers than social media—nearly 40 times that of Facebook and Twitter combined (McKinsey).
70% of those surveyed checked emails whilst in front of the TV, 18% whilst driving and 42% whilst in the bathroom; it would be fair to say customers may not be fully focused on your emails.
How to Create Emails that Generate Attention
Attention grabbing subject lines
Did you know that just under half of email recipients open emails based only on the subject line ? This shows the power a subject line can have, it can make or break your email marketing campaign.
Some simple tricks to get someone to open your email.
Keep it short and sweet. Make it easier for your customer to understand what they will receive if they open your email.
Ask a question. Questions create curiosity, and curiosity can lead to engagement.
Make it personal. If the subject is relevant to the person reading the email it will grab their attention.
Surprise. A surprise grabs a person attention and interest.
Avoid spam words where possible. Spam words include buy, save, help, % off. To learn about spam word I recommend reading this article.
Test subject lines. Your customers are the best judge of what works and what does not. Test different subject and measure which results in the highest open rate.
Attention grabbing content
Once you got someone to open your email the next step is to ensure that they engage with your content. Here are some tips on achieving this.
Headings should contain two to more of the following characteristics: be unique, specific, useful and convey a sense of urgency. With being unique it should stand out from the other emails in their Inbox. With urgency, It should include something that compels the reader to continue reading. The sense of the possibility of losing out can be sufficient to keep the reader engaged.
Useful: if your content is identifiable as relevant it will read, kept and even forwarded or shared. To understand what is useful survey your readers.
Personalise. Personalisation from a user perspective includes giving the user the choice on how often they receive your emails and what the email should contain. From m-commerce perspective, it means delivering content based upon the reader interaction with your m-commerce platform. Using your mobile/web analytics and ERP you can develop an understanding of their order history, what categories and products they have looked at, what items are in their basket. With this information, you can develop emails which relevant and personal to the user.
Be brief and concise, less is more.
Use white space to focus attention.
Use colour to draw attention to what is important.
Have a clear call to action and ensure it is above the fold. Repeat the call to action before the footer of the email.
Communicate your value proposition. What makes your offer unique?
Getting the timing right
Sending an email at the right time can lead to a higher probability of a sale. The opposite is also true. Should you send an email before work? At lunch time? In the evening? During the weekends? Below is a tongue in cheek response to the question by Silverpop know known as IBM Watson Campaign Automation.
To answer the question to boils down to two elements. What does your data tell you? And what have you tried? Using your analytics what day and when do you have the highest sales volume? When do you have the most visitors to your app/website? This will give you a picture of when customers are most likely to purchase.
Have you tried sending at different times of day and different days of the week? If not set up a test. If you have tested in the past, test again.
Remember every industry is different and every website is different.
Tying email to m-commerce
An email will grab someone attention and if it relevant they are likely to visit your landing/product page.
Here are some tips to take someone from the click on the email to the final purchase.
Loading times is king, especially on a mobile network. Look at the speed at which the landing page loads and the time it takes to take payment. To improve the speed performance look at using a CDNs, ensure images sizes are optimal, removing unnecessary images and code, try minification of HTML on live servers and reduce the number of steps it takes to make a purchase.
Be consistent. Use the same images, same facts between email and landing page. Confusion leads to doubt and doubts lowers the chance of a sale.
Make sure your value proposition is not only consistent with the email it is clear and visible on your product page/landing page.
Where possible ensure all relevant information (such as sizes, colour, warranties, guarantees, FAQs or any USPs) are easily accessible on or from the product page. If a customer has a doubt or a question that is not answered it will impact the likelihood of a sale.
Provide credibility, be that customer feedback, independent reviews or guarantees of security/data protection.
Create a sense of urgency or scarcity. If an offer is limited by time or quantity this may induce a person to make a decision to buy and not delay any further.
If are there any special offers make sure they work and it is clear and simple for the customer to use. Consider auto applying the discount so that is one less thing the customer has to remember to do.
Allow guest logins, Paypal or Amazon Pay to speed up the checkout process.
Can you find a way to allow the customer to save the item to buy later?
If it the item is out of stock offer an alternative.
Offer an upsell and a down sell of the product but ensure the decision is easy to make. If someone cannot distinguish and decide which version of the product to buy you may lose the sale.
Email and Retargeting
If you already using retracking on your website have you ever considered incorporating your email offers into your retargeting banners?
A simple update could see your email offer follow your customers over the Internet and Social Media.
Email and Facebook Marketing
Have you considered using custom audiences on Facebook to amplify your email campaign? Facebook gives you the ability to import your email database which then matches the email addresses against its own database. In my experience, I have seen Facebook identify over 65% of the email addresses you import. You can then use Facebook advertising to target these customers with your email offer.
I hope you found this article useful if you could share it that would be fantastic. Every tweet, every post and every link helps 🙂
I love Fridays, it’s my favourite day of the week it’s even better than Saturday and that is saying a lot. But Friday, especially Friday afternoon, is usually associated with being lazy so I thought wouldn’t it be cool if I could put together 10 simple hacks to improve conversion rate on a product page that you could do on a Friday afternoon. The idea is to make an immediate change or be simple enough to encourage you to begin a cascade of changes. As they say from small beginnings, come great things.
This is my version of the Grandmother test. To do this you need a product page, the physical product, two volunteers and a pad of paper (yes you can use a digital device but, I recommend writing on paper). For this to work, the volunteers cannot have seen the product before or be able to communicate or see the other volunteer.
Give the first volunteer the product, and let them spend a few minutes with it. Then ask them the following questions; describe the product and what are the benefits? Make notes on what they say.
Give the second volunteer a print off, of the product page (so that they are not tempted to Google it). Ask them to describe the product and what are the benefits? Make notes on what they say.
Now compare the two descriptions of the product; ask the question what changes can you make to the product page to improve the product description?
Rational– there is one thing to be given the physical product and another to understand something by reading about it.
The higher your advert ranking in the SERPS (Search Engine Results Pages), in general, the more traffic you will receive. An important factor to consider is the CTR (Click Thru Rate) this is the percentage of clicks relative to the number of impressions for that search term, or in simple terms does you advert gets lots of people to click on it. It is possible to have a lower position in the SERPs but, still get a higher number of clicks compared to someone who is higher on the page than you.
Google has a really cool tool that lets you preview what your mobile snippet looks like on Google.
Pick a product page you wish to optimise. In one browser (PC or mobile) have the mobileserps tool open and on a mobile device search for the product page that you wish to optimise . Have both browsers viewable so it is easy to compare the results. In the mobileserps tool type the title, meta description and the URL of an existing product page . In the browser search for the exact same product. Review your competitor’s results. Is there something missing from your snippet compared to your competitor? Does any snippet stand out from the others? What is unique about it? What can you change to improve the CTR? Edit your snippet until you are happy with it. Once your editing is complete, change the Meta Title and Description on the live site.
Rational – the more relevant and customer-focused your snippet is, the more clicks it will generate.
Not everyone uses their phone in portrait mode for every task, some people use their browser in landscape mode. Yes, they hold their phones sideways when they use an Internet Browser.
Hold your phone in landscape mode and look at your product page. How does it render? Did you get an OMG moment? Did something break? Is it easy to find the add to cart/basket button? Compare your page to your top competitor, can you see something they do better than you? Go around the office show people, see their reaction, create a conversation. Do you use Basecamp? Teams? Slack? Take a snapshot of the page, upload and begin a conversation. Sometimes you do not need to have the answer you just need to initiate the conversation. Or find someone in the office who can make the change.
Rational – people use mobile phones in ways you would never expect, so sometimes it helps to consider about possibilities.
Not everyone has access to super-fast WiFi or able to benefit from 4G/LTE. You may hate me for asking you to try this, switch the WiFi off and change the connection speed on your phone to its lowest connection speed. On my iPhone it is 2G. Now your phone is on super slow model; go to the homepage of your website and try and buy a product.
Before you scream in frustration, take note of the areas of the website that you feel are super slow. You can use tools like Google testmysite or Pingdom to independently test your site.
Once you have identified a possible culprit ask the question; what change can I make today? An example of a change you can make immediately is to compress the sizes of the images on the page. There are online tools available to do this or use Photoshop and the save to web function.
Rational – Sometimes it is easy to miss very heavy page(s) because of a fast Internet connection. People use phones on the train, in big metal buildings or in crowded areas . In these situations, speed plays an important part of whether to buy now from you or buy later or from someone else. And we know buying later can mean don’t buy at all.
Wear a pair of gloves and use your website to place an order. To make this work it cannot be just any pair of gloves (even the ones that your grandmother knitted) it must be a pair of touchscreen gloves. Extra tip; the bigger the Touchscreen gloves the more you can learn.
What did you learn when placing an order? Were the buttons too close to each other? Were the search boxes easy to use? Make a note of an improvement you can easily make.
Rational – people can have a disability or use a phone whilst simultaneously doing several other things at once. Reducing the chance of making a mistake improves conversion rate.
There are two ways you can do this hack.
Open a product page on your smartphone and then hold the phone at arms length. If you have a super large phone (Phablet) you may have to step away from the phone. The other way is to borrow the smallest screen smart phone in the office.
What can you see on the page? What should you be able to see? Is the price visible? What about the add to Basket/Cart button? Does the product image do justice to the product? Make a note of what you should change.
Rational – If there is anything that can a cause a distraction or if the most important elements on the page (price, description, image or add to cart/basket) are hidden, it can lead to a lower conversion rate.
Pick a product and, now, search for the same product on a search engine. Can you find it cheaper elsewhere? Can you get free or cheaper delivery? If you can find it, on then your potential customers can do the same. Ask the question what should I change on my product page to combat this potential loss of revenue? Dropping prices isn’t always the best answer.
Rational – The Internet gives you the freedom to check multiple sites easily. Knowing that you are in a marketplace helps you remember; what may have worked yesterday may not work today.
Find a product page where sales volume is low and ask the question if six months from now sales for this product were to be tenfold higher, what did I do to cause this today?
Rational– These types of questions open the mind to think of a place of plenty and a belief that it did and can happen as opposed to scariness and a belief that it may never happen. That positive shift in focus will lead to different answers than just asking what can I do improve sales.
In some way similar to Hack 1 but different enough to be its on hack 🙂 Open you product page on your mobile and read out aloud every thing on the page. Does something sound strange? Odd? Could something be improved? Does it flow?
By reading out loud it is much easier to identify mistakes in punctuation, spelling and things that do not make sense or are missing.
A study by VWO showed better image selection can improve conversion rate. With the phone in hand, open a product page and this is where the fun starts. Find people in the office or in the street you don’t know and ask them, if I were to re-shoot the product shots, what could I improve or add? Brownie points for you if you can find people who are your target audience. Once you have enough data, brainstorm ideas on what images you need. With a little determination and maybe Photoshop or a camera person, you can have something ready in a short space of time.
Rational– a picture is worth a thousand words. Conveying more information or a better quality of information in a picture can ignificantly improve conversion rates.
Mobile phones are one of the great revolutionary devices of the recent past. While the transmission of voices over the airwaves has a long and fruitful history, mobile phones as we know them have only been around since the 1970s. That’s when the first devices that were: 1. able to connect to conventional telephone lines; 2. were wireless and 3. actually were mobile were developed.
But the long and interesting story of the development of the mobile phone actually begins long before the era of disco music and bell bottoms.
Hopes and dreams
At the turn of the century – the twentieth century, that is – an inventor and scientist by the name of Prof. Albert Jahnke claimed to have invented a mobile telephone. Just 30 years before, the first commercial telephone network was opened, with a mere 21 subscribers, so many were dubious of Prof. Jahnke’s claim. In 1908, charges of “using the mails or a scheme to defraud” were brought against Prof. Jahnke and J.B. Allen, Dr. Bardach and M.P. Allen, of the Oakland Transcontinental Aerial Telephone and Power Company, which was advertising the amazing new invention. But several witnesses came forward to testify that they had used the wireless invention successfully. One man testified that he had used the mobile phone in Kansas City, Missouri, back in 1904, to call a place seven miles away. With all the testimony, the charges were eventually dropped, but for some reason, the invention was never produced or sold.
Still, the idea of talking to others while on the move was persistent. In 1918, the German government developed a way to communicate between military trains using telephony, and they worked to provide that technology to the wider public. In 1924, first class passengers on trains between Berlin and Hamburg were able to call any telephone in the country – or even passengers on other trains – by connecting to a switchboard.
In fact, once the telephone was established, it didn’t take much to imagine pocket-sized phones that we would carry around with us. In the seminal magazine Punch, caricaturist Lewis Baumer anticipated the social isolation mobile phones can create when he published his cartoon “Predictions for 1907“. In the image, a man and a woman with aerials stretching from their hats sit next to each other in Hyde Park, turned away from each other and fixated on the large boxes in their laps. The caption (“These two figures are not communicating with one another. The lady is receiving an amatory message and the gentleman some racing results.”) makes it clear that the pair, while close in proximity, are not remotely interested in one another. And in 1927, artist Karl Arnold drew a cartoon for German magazine Simplicissimus that envisioned a street full of pedestrians with telephones hanging out of their pockets.
By the 1940s, hand-held communication devices that used radio waves were, if not commonplace, at least not completely unheard of. They played a prominent role in communication during the Second World War, and in the 1940s, some telephone companies offered telephones for use in cars. Unfortunately, these devices were cumbersome (some weighed in at 80 lbs) and used massive amounts of power, and the networks – each owned by competing telephone companies – could only support a handful of conversations at a time over a limited range.
While all this mobile technology was being developed, authors continued to imagine a world of wide-spread ‘pocket phone’ use. Sci-fi writers like Robert Heinlein, Erich Kästner and (unsurprisingly) Arthur C. Clarke all described mobile phones of one kind or another in their writings. Even low-brow entertainment used the idea: comic book series Dick Tracy and TV show Get Smart both conceived of communication devices embedded in watches and shoes.
Early devices and mobile networks
Humanity began to inch towards the mobile phone during the late 1950s and early 1960s, when Russian engineer Leonid Kupriyanovich developed a series of experimental mobile phones. One of the latest models, finished in 1961, weighed just 70g and could easily fit in the palm of a hand. Still, the Soviet government prioritised the “Altai” car phone system instead, setting the development of handheld mobile phones back decades.
While the development of the mobile phone stalled, the development of mobile networks was moving quickly on. The popularity of phones in cars meant demand, limited as it was, still outstripped the capabilities of the telephone networks, so companies around the world developed their own mobile networks. Since standards were not uniform, however, few customers could use different networks.
In the US, two Bell Labs engineers called Douglas H. Ring and W. Rae Young imagined a system of hexagonally shaped “cells” that would allow large numbers of car phones to access the network. The technology wasn’t around to put their ideas into action, however, until Richard H. Frenkiel, Joel S. Engel and Philip T. Porter, also Bell Labs engineers, took up their ideas and began to create a solid plan 20 years later. This plan included important concepts that would allow phone users to move between “cells” without interruption and access the network much faster, concepts essential to mobile phone use today.
Throughout the 1960s and 1970s, crucial concepts continued to be honed and officially described, and they would be implemented as soon as the technology could be created. During the 1940s and 1950s, manual networks, which required people to operate switchboards, were in use in countries like the US, Norway, Bulgaria, Finland, the UK and West Germany.
Then in 1956, Sweden launched the first automated mobile phone system for vehicles, called MTA, which was phenomenally successful. In the US, the first such system was operated in northwest Kansas. The system launched in 1959 and for unknown reasons was shut down less than a year later, never to be relaunched. In 1967, “Altay”, a similar system, was launched in Russia. Unlike the US’s first network, the Altay system is still used as a trunking system in some parts of the country.
The mobile phone emerges
Car phones were becoming more popular and easier to use, but the idea of a phone you could carry just would not die. In 1973, Motorola became the first company to produce just such a device. It weighed in at 1.1kg (nearly twice Kupriyanovich’s 1961 phone), and it was 23cm long, 13cm deep and 4.45cm wide. It offered a talk time of 30 minutes, after charging up for 10 hours. Motorola executive Martin Cooper made the first public call on a mobile phone on that device, ringing up his competition at Bell Labs, Joel Engel.
Once the principle had been established, companies found it was easier to develop the networks and the devices simultaneously.
The first generation of mobile phone networks (today called 1G) used a system called the Advanced Mobile Phone System (AMPS). It started out in Japan in 1979, before rolling out to the Nordic countries in 1981, the Americas in 1983, Israel in 1986 and Australia in 1987. This wide adoption meant the mass market could more easily utilise the technology, even though it had some glaring security faults.
On this system, the breakout device was the DynaTAC 8000X. Despite its charge time of 10 hours, talk time of just 35 minutes, bulky size and hefty price ($3,995 in 1984, or $9,366 adjusted for inflation), it was popular: waiting lists for the phone reached the thousands when it was released.
The battle of the standards
The 1990s brought about smaller phones and a second generation of more reliable networks (now called 2G networks). It also brought about a battle for standard supremacy. As countries developed their own networks, there was little in the way of standardisation, so phones that worked in the US couldn’t work on European networks, even if the device itself could get over there.
Eventually, two networks battled for global domination: the European GSM standard and the US CDMA standard. Both systems used digital rather than analog transmission, so connections were faster and more reliable. This caused mobile phone usage to truly explode: innovations like flip phones and prepaid mobiles became common.
Phones in the 1990s shrank in size and increased battery capacity. For the first time, phones could send SMS messages – on Europe’s GSM network at first, before spreading to other networks. The first SMS message, written by a machine, was sent in the UK in 1992, followed quickly by the first person-to-person text message, sent in Finland in 1993.
Arguably the first smartphone, the IBM Simon, was released in 1993. It had a calendar, touchscreen with QWERTY keyboard, notepad, email function, fax machine, pager and more. Simon could also use apps, if you installed a special memory card. It was expensive, however, and the market wasn’t ready for such an advanced device. It was considered a commercial flop.
In perhaps the biggest development, mobile phones in the 1990s could begin to access content and be used to buy things. Finland’s Radiolinja (now called Elisa) introduced the first downloadable ringtone in 1998. Also in 1998, Coco-Cola installed vending machines in the Helsinki area that could use SMS to pay for drinks. In 1999, Philippine companies Globe and Smart simultaneously launched mobile payment services that could provide banking services.
Finally, in 1999, Japan’s NTT DoCoMo introduced full internet services on their mobile phones.
By the end of the decade, the 2G networks’ capabilities were exhausted, but they clearly set the tone for today’s mobile phone technological developments and uses.
3G, 4G and more
The first network to utilise 3G technology was launched by NTT DoCoMo in 2001. This set the stage for a rollout that wouldn’t exactly standardise network technologies, but would make it easier for them to be compatible. The US’s CDMA technology became WCDMA, after developing a way to be compatible with the 3G technology, while maintaining backward compatibility. Now, mobile phone users could use the same device, no matter where they were, so long as they had a signal.
The increasingly advanced speeds meant content streaming could be a reality. Instead of waiting ages for a song or video to download, customers could just watch or listen to it straight away.
By 2007, nearly 300 million people subscribed to the 3G networks, with about two-thirds of these subscribers using the WCDMA standard. Those 300 million made up nearly 10% of all mobile phone users worldwide, generating over $120 billion for 3G network providers.
At this time, popular phones included the Motorola Razr, the Blackberry Pearl and, of course, the first iPhone. The iPhone revolutionised the wider mobile phone market, bringing smartphones to the masses.
Just two year later, in 2009, it became clear that all those people doing all that streaming would quickly overwhelm the 3G network, and work began on 4G. The main difference between 3G and 4G is that phones on the 4G network treat all their functions as digital content. That means a call and watching a YouTube video are both essentially streaming content, as both were turned into digital signals.
Despite the many changes in the mobile phone sphere, one thing hasn’t changed. We still want to be able to talk to whomever we want, wherever we are. And although we now expect to settle pub debates, look up the name of that actor from that thing, send contact information or share a picture instantly, that basic idea – that we should be able to send and receive information wherever we are – is still present in every interaction we make with our mobile phones. And it will be for the decades to come.
Even if you don’t know the terminology, chances are you know what m-Commerce is. If you’ve ever researched a product or even purchased something from your phone, you’ve participated in m-Commerce. At its simplest, m-Commerce just means “mobile commerce”. More accurately, it’s “any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device.”
In practice, this means customers carry the online shops they love in their pockets. From looking at what the latest products are and comparing prices to finding coupons and pressing ‘confirm purchase’ right on a mobile phone, m-Commerce covers the range of purchasing activities people engage in on their mobile devices. It might seem like an obvious thing today, but the concept of m-Commerce took a lot of collaboration and plenty of imagination to become a reality.
The Late 1990s: the beginning
It all began back in 1997, the same year Tony Blair beat John Major in a landslide victory, scientists in Scotland made Dolly the sheep famous and the film Titanic assured us that our hearts would go on.
While the rest of us worried about the futuristic year of 2001, telecoms companies were thinking about the future. Logica and Cellnet, which later became O2, came together to launch the Global Mobile Conference Forum. During the launch, Kevin Duffey, the Group Telecoms Director at Logica and the forum’s first executive chairman, coined the term m-Commerce, and though the terms weren’t set in stone, the aims of the forum were clear. The goal of the forum was to figure out a way to get customers to use their increasingly advanced mobile phones to make purchasing things easier.
Collaboration was an important part of the forum’s strategy, and many others soon saw the benefit of working together. Within the first year, more than 100 companies joined the forum to collaborate and try out different ideas.
In fact, it didn’t take long before the first practical application of m-Commerce occurred. The same year the forum launched, two Coca-Cola vending machines were installed in Helsinki, Finland, that allowed customers to purchase a beverage using SMS. Shortly after, Merita Bank of Finland also utilised SMS to develop the first mobile banking system.
1997 ended with the advent of the m-Commerce server. We might not have heard of it, but the server, created by Duffey and Logica’s Andrew Tobin, was key to an m-Commerce solution developed by Logica, De La Rue and Motorola. The innovative solution was recognised in 1998 when it won the Financial Times 1998 Global Telecommunications Award for “most innovative mobile product“.
Finland continued to pave the way in mobile innovations in 1998. Radiolinja (now owned by Elisa Oyj) began to make the first downloadable ringtones available through purchase, but that doesn’t mean all developments happened in Europe. In Asia, national commercial platforms for m-commerce were launched in both the Philippines and Japan in 1999. In the Philippines, it was called Smart Money, and in Japan, the i-Mode Internet service was provided by NTT DoCoMo. It was an mobile internet service that allowed customers to purchase items through their phones.
Turn of the Century: wider acceptance
The turn of the millennium brought with it an international proliferation of m-Commerce. Back in Europe, Norway introduced the ability to pay for parking from a mobile phone. Customers in Austria could buy train tickets. And in Japan, airline tickets were available to purchase through mobiles.
In 2001, the adoption of m-Commerce began in earnest, since the rollout of 3G mobile networks made online browsing easier and safer than ever. Finnair, the Finnish airline, began to allow mobile check-ins. By 2009, half of all passengers were using it on their busiest routes.
The next year, the European Telecommunications Standards Institute began to push for standardisation in m-Commerce technology. The organisation appointed Motorola’s Joachim Hoffmann and charged him with the development of standards. Then, in 2003, the US got 3G and Apple launched the iTunes store, bringing the US market into the world of m-Commerce.
The next big development didn’t have anything to do with the Global Mobile Conference Forum, servers or speedy mobile connections. On 29 June 2007, the iPhone was launched. The popularity of the iPhone meant smartphones become mainstream consumer electrics. As a result, the technological focus of m-Commerce companies shifted from SMS and internet access to the development of applications, or apps.
Once the iPhone made apps – and by extension m-Commerce – mainstream, the developments came quick and fast. Amazon launched TextBuyIt in 2008, a now-defunct service that allowed users to check prices and purchase items using SMS. In the Philippines, Globe launched GCASH, one of the world’s first mobile wallets. This service didn’t allow users to pay for items using their phones, but it did allow money to be sent electronically from one bank account to another, beginning the mobile banking revolution.
2009-2014: 4G and common use
As the decade came to a close, 4G networks began to be rolled out to selected US cities and in Stockholm and Oslo. It became clear that m-Commerce would only get bigger and bigger. In fact, a 2010 report by the International Telecommunication Union predicted that “web access by people on the go – via laptops and smart mobile devices” would exceed access from desktop computers by 2015. In fact, mobile access overtook desktop access in the US in 2014. In the UK, mobile access overtook desktop access in 2016.
Were all of these mobile users actually buying things? By 2013, they were. Nearly one-third of smartphone users and more than two-thirds of tablet users had purchased items on their devices. And that summer, “omnichannel retailers”, those with significant online and physical stores sales, found that 25-30% of their online traffic came from mobile devices. Many online-only retailers, meanwhile, reported that 40-50% of their traffic came from mobile devices.
In 2014, Apple Pay was launched in the US. It used near field communication (NFC) to allow users to tap their iPhones on a compatible reader to make purchases. The next year, Android Pay was launched in 2015, which like Apple Pay, used NFC to purchase products. Since the late 1990s, companies like eBay and PayPal were trying to get customers to use digital wallets. Even Google tried to get in on the game with Google Wallet in 2011. But customers just didn’t quite trust these purely digital wallets. Once Apple, and later Android, inextricably linked the digital wallet to the phones’ security features, people began to feel more comfortable using their mobile phones to tap a reader by a till to make small purchases.
In the past, the focus was on getting customers to use their mobiles to make purchases wherever they were. Since that has caught on, retailers now are adopting new strategies. Physical shops are trying to create a “bricks and clicks” environment. That means they are using location-based tracking, barcode scanning and push notifications to urge in-store shoppers to complete their purchases in the shop. They do this by making things like coupons, user reviews and other information readily available on customers’ mobile phones. Mobile phones can also be used to hold vouchers, coupons and loyalty cards that customers can use in-store. These are often sent to customers that are near a location to entice them to shop.
In developing countries, many people are avoiding corruption and underdeveloped systems with mobile money transfers. In Kenya, almost all money transfers on done through mobile companies – M-PESA and Airtel Money. It’s taken off in parts of Europe, too. Germany has a similar system, called MobilePay, and the Norwegian system is called Vipps.
Mobile technology has also meant we can get cash in more places. Mobile ATMs, which can be installed anywhere an ATM might be needed temporarily, use the wireless technology that mobile phones use to transmit transaction information to banks. In short, m-Commerce technology helps people get cash out at temporary fairs, conferences and more.
Finally, the way we buy things on our phones has changed, too. If we buy physical products, we increasingly turn to our favourite stores’ apps. Back in 2015, a full 40% of mobile sales were expected to come from apps, rather than from mobile browsing. And the content we buy to keep on our phones has changed, too. We mostly buy games, ringtones and wallpapers for our mobiles, but as our devices have become all-in-one entertainment devices, sales of full length music tracks and even movies have become more common.
It seems hard to believe that in two short decades, the m-Commerce environment has gone from an idea to a gigantic part of the e-Commerce landscape. In the US, m-Commerce made up 11.6% of e-Commerce sales, which hit $303 billion that year. BI Intelligence predicts that by 2020, m-Commerce will make up 45% of e-Commerce sales. That means m-Commerce will be worth $284 billion on its own, just $19 billion less than the whole industry was worth in 2015. That’s not too bad a development for a sector that didn’t have a name just 21 years ago.