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Mobile Analytics: The Key to Higher ROI and Engagement with Holiday Shoppers

Guest Blog by Brendan O’Kane

Could a holiday shopping season in which big retailers stay open around the clock be somewhere in our near future?

It may seem farfetched until we consider that Thanksgiving, once a day when almost all stores were closed and people stayed home with family, is in the process of becoming Black Thursday. Macy’s recently announced that, during the weekend before Christmas, it will stay open for 48 hours straight. It probably won’t be long before other leading large retailers follow suit, hoping for an even bigger slice of the year-end profit pie.

These trends line up perfectly with growing consumer spending during the holidays. During the 2010 and 2011 seasons, even with all the recession-driven belt-tightening, retail sales rose 5.5% and 4.1%, respectively. This year, they’re expected to reach a record $568.1 billion, perhaps a reflection of the fact that, as research from Experian shows, consumer optimism is at an all-time high.

With device-toting consumers already visiting both brick-and-mortar and online stores in record numbers to score the top gifts, gadgets, toys and appliances, retail marketers are scrambling to launch mobile campaigns. By December 31, 2012, they’re expected to have allocated twice as much in their budgets this year as they did last year to connect with holiday shoppers on their ubiquitous “third screens.”

Action Analytics as a Force for Greater Holiday Revenues

However, when it comes to marketing through feature phones, smartphones and tablets, some messaging campaigns aren’t having their intended effect. Why? Too often the messages are irrelevant, ill-timed or excessive – or all three. And an overload of messages that add no value to their lives simply turns most consumers off.

During the holidays and beyond, brands and retailers have the tools to boost engagement with consumers – as well as ROI – by measuring the effectiveness of their messaging.

For example: a top discount retailer with a mobile app is offering 15% off on a new line of tablets. The retailer deploys two versions of the same message to app users who fit the profile of a likely tablet buyer to see which delivers higher value:

  1. “Holiday Special 15% off on Mega Tablet 3!”

Message A had a 40% open rate and a 20% coupon click rate. For every 100,000 messages sent, 8,000 coupons were clicked.

  1. “Mega Tablet 3 Now 15% Off. Hurry, Deal Ends Soon!”

Message B had 30% open rate and a 30% coupon click rate. For every 100,000 messages sent, 9,000 coupons were clicked.

Message B yields better ROI even though it had a lower open rate, because it had a higher coupon redemption, or conversion rate (9% vs.8%). This type of message analysis, which has been used in print, television and Web campaigns for decades, is known as A/B split testing.

The process doesn’t end there, however. The retailer wants to rework its push notifications to reach particular customer segments, including those who didn’t open the push notification, SMS or mobile email message and those who did open it but failed to click on the coupon.

That’s retargeting. The retailer renews its focus on those consumers by using gathered data to make follow-on messages even more relevant and increase conversions even further. By testing message content for optimal relevance and sending only when the data says it should, the retailer can sidestep the major pitfall for companies marketing on mobile: being perceived as intrusive or spammers.

To Engage Rather than Annoy, Measure, Then Measure Again

Mobile phone spam is such an annoyance to consumers that some companies have elected to skip mobile marketing altogether. I know of one major retailer that has resisted the pressure to market on mobile. An executive told me the company’s fear of having customers see it as a spammer has kept it from taking the plunge. Luckily for this company, it still does a great business.

However, not all marketers can say that. In less than two years, mobile is expected to overtake desktop as the primary Internet access point for most consumers and to channel over half of all online revenues.

Regular measurement of mobile messaging can help brands and retailers gain actionable business intelligence by taking the pulse of their audiences. That information can be used to design thoughtful, intelligent and timely push, SMS and mobile email campaigns.

This also applies to all other times of year when retail shopping spikes, such as Mother’s Day and the late-summer “back to school” sales blitz.

The slow recovery isn’t slowing down determined mobile consumers looking for great deals. Through action analytics, retailers can find the right moment and the right messaging to drive higher ROI and customer engagement no matter what holiday it is.

Brendan O’Kane is CEO of OtherLevels, which helps mobile game developers, brands and publishers using Push Notification, SMS and Mobile Email Messaging engage, retain and maximize the value of their audiences through mobile messaging analytics and retargeting.

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