Local Onliner’s 2016 Trends and Predictions Re Customer Engagement Marketing

Our friends at Belly prompted me with some trend questions for 2016 for the company’s blog. I like where they were going, and responded as such:

What three marketing trends will have the greatest impact on customer engagement?

For the past several years, we always talk about (X) year being “the year of mobile.” And there has been tremendous movement towards a mobile centric environment for consumer information and services. But 2016 will represent a tipping point for mobile as people will increasingly use their mobile devices for commerce oriented features. Ewallets, mobile coupons, QR code info and card linked loyalty will become increasingly integrated into shopping activity. In 2016, there will also be something entirely new: The ability to pay all or part of purchases with loyalty points from different programs. We’ll see how that flies with merchants who don’t want to participate in such “coalition” marketing.” I suspect it will take some time to really take off.

There will be more social-oriented marketing, less “advertising.” SMBs are taking a social centric point of view in marketing. In many cases, they are beginning with a free Facebook account rather than a Yellow Pages ad or a Google AdWords campaign. Many go on to buy advertising on Facebook, or work with other social media or traditional media. But their real focus is on mastering social marketing. They are more likely to work with a marketing service that helps them get there.

We also expect to see more easy ordering and fast delivery options. Many local merchants have never really put much thought into easy ordering and delivery, whether they are restaurants, home services or speciality retail. But in many categories, national players are increasingly offering free or cheap delivery. It will be important for local merchants to match their efforts. The cost of delivery can be offset by more impulse buys, more upsells and customer loyalty.

There’s been a lot of discussion surrounding beacon technology and its impact on the customer experience. Will this technology be exclusive to the big brands or more accessible to the small business owner in 2016?

Beacons are one way to determine who is in the store and to target users with special offers based on their browsing and purchase behavior. The technology is relatively inexpensive, but managing it and acting on it takes some resources, so SMBs are less likely to use them. The exception: SMBs that buy into loyalty and CRM programs that include beacons as part of the subscription.

How crucial are brand evangelists for a business’s success? How can a small business go about building this base of loyal customers?

Brand evangelists who help SMBs with social media and commerce are increasingly important, not only for acquiring new customers, but for engaging existing customers. Getting existing customers back in the store and buying more is mission # 1 for many SMBs.

What social media trends do you predict will influence customer engagement?

Loyalty programs that include cash back, points flexibility and special perks; Opt in Messaging from favorite merchants that feature offers.

Last year we made a list of predictions for marketing trends in 2015. Which were fulfilled and which missed the mark?

A: Individualized Messaging

Not yet. Most programs don’t really have the volume of merchants or knowledge about their customer to offer truly individualized messaging. Most messaging will continue to be targeted on the general basis of locality and gender. In 2016, we might see more messaging based around recent purchases.

B: Powerful Storytelling

Better and better. Storytelling is getting increasingly powerful, especially as more merchants add video, which remains the media channel with the highest engagement. We’ll look for more “organic” testimonials via reviews in 2016.

C: Reputation Monitoring

Continues to Grow, but shifting. Reputation monitoring via social media tracking continues to grow in importance, but is increasingly integrated with presence management (web site hosting, listings updates etc.). It is all a major part of the new marketing.

D: Trackable Customer Acquisition / Lead Attribution

Critical. Attributing the right lead to the right marketing channel is a key part of the new presence management environment. With the average SMB now using 7 or 8 channels, and also reconsidering their marketing budget, attribution should shape up as being a top priority for 2016. We also look to see attribution increasingly linked to close the loop marketing, as SMBs do a better job tracking marketing efforts to actual sales, and then re-engaging these with loyalty efforts, new offers etc.

E: Customer Retention

Critical. More SMBs are planning to engage loyalty programs in 2016; and many existing loyalty program users are upgrading them from paper-based programs. From the consumer side, however, there are a glut of loyalty programs and they don’t often use them on an ongoing basis. The challenge in 2016 is to keep consumers interested and engaged.

Is Groupon ‘Misunderstood’? It Probably is Under-Appreciated

Newly Elevated Groupon CEO Rich WIlliams

Groupon is “misunderstood”; people haven’t updated their view of Groupon as a full blown marketplace rather than a “daily deals” company; and it actually is “the unquestionable leader in local.” All this per newly-elevated CEO Rich Williams, in a public letter.

“We have unprecedented experience in local, and what we believe is the right vision and strategy to make our goal of becoming the daily habit in local a reality,” says Williams, who has held executive ranks with Groupon for four years. While the company is going through many changes, “there are some very important things that are staying 100% the same: our mission to connect local commerce; and our vision to build the daily habit for local commerce, the marketplace where people discover and save on amazing things to eat, see, do and buy in their neighborhood. “

In his letter, which was sent to the press/analyst community, Williams concedes past strategic errors; and promises to move away from a reliance on the high volume,“empty calories” of low margin electronics sales. He also promises new marketing efforts and shopping features that will attract “millions” of new customers. And while Groupon has closed down a number of international programs – this week closing down the Scandinavian countries — it will redouble its efforts on several of the remaining international markets, including Australia, France, Germany, Italy and the UK.

Williams candidly acknowledges that the company has brought a lot of its troubles onto itself. It has highlighted — and then de-emphasized — one strategic initiative after another. I’d like to hear more about the status of several initiatives, including offer personalization; the food delivery effort; the Breadcrumb loyalty and POS program; self serve deals; and the extended publisher network.

Groupon also has moved away from offering exciting and creative deals. Now, its inventory includes a number of predictable and/or shoddy goods. While the company claims to personalize deals for users, I haven’t seen it. (Not to be prudish, but I recently got an email promo with a lot of sex toys in it.) Moreover, some of the pre- discount values on the site are exaggerated.

So — write off Groupon? Definitely not. At the end of the day, we’re still looking at a very large, mobile-oriented marketplace with more than 500,000 items from one million merchants being marketed to nearly 50 million consumers members. That volume speaks for itself. And it is a unique offering, if not yet a blue chip one. Based on Williams’ note, they’ll keep working to get there.

Here are six highlights from Williams’ letter:

1) “Groupon is a misunderstood company. We’re misunderstood by analysts. We’re misunderstood by media. We’re misunderstood by consumers — both those who haven’t visited our site in awhile and those who’ve never purchased from us.”

2) “Too many people still think of Groupon as ‘that daily deal email company.’ The reality here is twofold: first, we’re a marketplace — and a big one — one with more than half a million deals in three different categories. Sure, email is still important, but more of our purchases come from on-site search than email, and more than half our purchases occur on mobile.”

3) “There’s more to our marketplace than deals, including an increasing number of market rate and low discount offers, and new ways to save time as well as money. They’re just in their early stages and we want to move faster.”

4) “MYTH: Groupon isn’t growing/Groupon is going out of business. We’ve definitely grown: since going public, we’ve grown billings and revenue by over 90%; we’ve had seven consecutive quarters of double-digit billings growth in North America; we’ve doubled our customers over the past five years; we’ve increased the number of deals on our platform by 500x since we went public in 2011.”

5) “MYTH: Groupon is bad for businesses. The vast majority of our deals (82% as of the last report) are breakeven or better on the deal itself (i.e., no overspend or cross-sell required). That is simply unheard of in high volume small business advertising and customer acquisition.”

6) “MYTH: No one can win in Local — There are a number of big companies — Amazon, Facebook, Google — who’ve tried and died in local….(but) We have sold nearly a billion Groupons life to date. Add to that our nearly 50 million active consumer and 1 million merchant customers to date and you have a lot of proof of the possibilities in local.”

Empyr’s Goal: Become the Google/Twitter/Facebook of ‘Online to Offline’

We hear a lot about Online to Offline (O2O) — online ads and promotions directly attributable to offline sales. Card linked offers, buy buttons and loyalty programs are all part of O2O, which has already gotten traction in China, where research by McKinsey shows that 71 percent of consumers have used an O2O app.

In the US, O2O is just getting started, building on interest in payment-related promotions spurred by Apple Pay and other initiatives. At this point, several O2O platforms have emerged, including Cardlytics, Linkable Networks, Affinity Solutions, Edo Interactive, Spring Rewards and Thanks Again. Another player is Empyr (owned by Mogl).

Speaking at Money2020 in Las Vegas in October, CEO Jon Carder made his ambitious agenda clear: to become the dotcom “verb company” for O2O. “There is no Online to Offline equivalent of Twitter for SMS; Google for search or Facebook for social,” he declared.

At Money2020, Carder said that O2O’s success in the U.S. will come from providing consumers real time offers from the best brands; complete analytics providing marketing insight; universal redemption capabilities for the leading credit card associations; and an ability to give them a seamless, fun and even meaningful experience.

Fun and meaningful experiences are things that Mogl seeks to provide via cash jackpots for the most frequent buyers, and charity donations funded from part of the proceeds. Its cause-related marketing efforts have won it testimonials from celebrities like Virgin’s Richard Branson, a mentor of Carder’s; and Hall of Fame golfer and fellow San Diegan Phil Mickelson.

The service has also stepped out front by allowing merchants to provide on the fly, time-of-day based promotions. A restaurant, for instance, can decide at the last minute to offer 20 percent cash back for diners coming in before 6pm.

Early results have come in from various brands that have teamed up with Mogl. According to a Visa study that tracked Mogl members over a two year period, Mogl promotions have generally boosted business by around 20 percent. Some affiliates are seeing even higher returns. Certain Jack in the Box locations, for instance, are seeing a 33.2 percent boost in daily spend, and a 33 percent boost in transaction frequency.

The big question, however, is whether these services can scale. In order to boost the number of merchants and consumers using the service, Mogl has launched Empyr, which enables other publishers to use its API not only for restaurants and fast food establishments, but for a wide swath of categories. Empyr will generally take a 20 percent cut of revenue from affiliates, leaving the bulk of the money for publishers and merchant acquirers.

One company that has jumped on the Empyr bandwagon is Living Social, which is using the company’s platform and local partners to launch its Restaurants Plus loyalty program in Washington DC, Atlanta, San Francisco, San Diego and Los Angeles. Another announced partner is Virgin America.

Empyr/Mogl CEO Jon Carder

Sneak Peek at BIA/Kelsey NEXT Show: 6 Things I’m Watching For

“End of Big” Author Nicco Mele Keynotes BIA/Kelsey NEXT Dec. 9-10

BIA/Kelsey’s December event has been local’s flagship, and always ahead of the curve in all of local’s iterations. It has been widely imitated, but never totally duplicated! I‘ve been producing it for a long time, but this year, handed it off in midstream. I’ll be moderating some great sessions, though, and the conference team has ended up with 52 hand-picked speakers, a Tech Expo and two full days of programming. Here are some of the things I’m most excited about:

1. The New Cut on Local and Community. Local’s still at the concept stage in a lot of areas. Why think small? Two leaders from USC’s groundbreaking Annenberg School (my alma mater) will point to the new directions in separate keynotes. First up is Nicco Mele, the author of The End of Big (2013), a tour de Force on “radical connectivity.” He’s also fresh from his stint as deputy publisher at The LA Times, where his team’s efforts to seize new initiatives in local had already produced major new revenue streams. He’ll have a lot to say about what’s going to work. Leading off Day 2 is Dr. Karen North, Director of Online Communities, a dynamic presenter who is focused on Millenial applications and behavior – you’ve heard, perhaps, these kids live on the phone?

2. Keynotes from Google and Facebook: The latest in local from the two dominators and trend setters in local. Danny Bernstein at Google is set to highlight its deep linking efforts (Google Now). He is sharing the stage with Button’s Chris Maddern and Local Seo Guide’s Andrew Shotland.

3. Big Thinking about MarTech: Big Data’s impact on local cuts many ways – analytics, leads, targeting, planning, But it’s only a subsegment of the broader “MarTech” movement. Those in the know attend Scott Brinker’s annual MarTech conference in Boston. Scott, who also runs ionactive, is going to focus on local and highlight what’s important and why for us at NEXT. He’ll be joined on stage by Surefire Social’s Chris Marentis.

4. The Mobile App-Driven Marketplace. The mantra is that it isn’t really about search right now, because Mobile apps are driving the marketplace. What’s that really mean for local? One of the best analysts I know is Mark Plakias, who has been running Orange’s think tank in Silicon Valley for several years. He’ll be joined by Quick.ly’s Paul Ryan and DialogTech’s Steve Griffith. This will be quite a session.

5. Local and The Internet of Things. We’ve been pondering iOT’s impact on local — when everything is linked, from transit cards to vending machines. So has the new venture, Instersection, which is a partnership from Google Ventures and former Bloomberg head and NYC Deputy Mayor Dan Doctoroff. CSO Dave Etherington will provide insights on what they are up to. He’ll be joined on stage by Cisco’s Andy Noronha.

6. Close Up on The New Local Marketplaces. We’ve been saying for a long time that local marketing has gone beyond advertising. Now it’s “closing the loop” with transaction data, offer targeting and complete behavioral profiles reshaping the game. Groupon’s Dan Roarty, Microsoft’s Neal Bernstein and MOGL’s Jon Carder share their insights. Cardlinx CEO Silvio Tavares will add data and help me run this session.

Haven’t got your ticket yet? I have a *little* influence and can get you $400 off. Please use this discount code: LOCALONLINER. You may register here.

The Local Angle to Virtual Reality: NYT Launches with Google Cardboard

IMG_3252 (1)

What is the role of virtual reality as a local or vertical marketing channel? It’s an important question for the industry.

What we know is that 360 degree video and other precursor technologies are now being applied for local verticals such as real estate, auto, retail and travel. It is fairly commonplace to get a view of new car interiors by mousing over them . But as processing capabilities improve, video costs decline, hardware production scales, and major companies invest, we’ll see full blown virtual reality being presented as a brand new channel for locally targeted brands. There may also be applications by local governments and others.

We also know that interest levels and industry investment levels in VR are high. A report that includes a consumer survey and industry analysis from Greenlight VR, a new VR consulting firm I am advising, shows that VR has high awareness among men and women (but especially men); there is high interest in VR among all age groups (but especially Gen Z, Millennials and Gen X); and consumers anticipate using VR for a wide range of activities, including gaming, travel, entertainment and training.

In anticipation of a breakthrough, companies such as Facebook, Google, Sony, Samsung , VG and Mattel have invested billions of dollars. In fact, Greenlight VR reports there are 160 U.S VR companies now, up from 120 in 2014. But it’s still a greenfield opportunity with no clear leaders at this point. On the processing front, we’ve also seen major support from Intel, NVIDIA and AMD.

Media companies are just beginning to weigh in as well, seeing a potential growth avenue and, possibly, a new way into video. This weekend, The New York Times launched its NYT VR app for iOS and Android, and delivered free Google Cardboard viewers (each normally priced at $24.95) to nearly 1.15 million Sunday print subscribers.

The inaugural VR programming on the Times app – a Mini Cooper promo and a moving, 10 minute warzone documentary produced with VRSE, a VR storytelling firm — was shot with multiple cameras and let consumers take a 360 degree view of various landscapes with studio quality sound (if using headphones.)

Relying on the inexpensive, Viewmaster-like Google Cardboard reader rather than high end computing platforms (expected to cost $300+,) the NYT programs aren’t offering much more than a self-directed, 360 degree view. You won’t see head tracking tech with this.

But it gets the app and reader into the hands of its early adopter, high- end readership. Its importance can’t be under-estimated. To us, it is a major step for both the NYT and Google, as they strive in their own ways to be immersive, comprehensive media and commerce providers. One wonders how a CBS or ABC affiliate, or a local newspaper, will compete against a Google, Facebook and/or NYT that offers virtual reality options, video, listings, commerce, social media and other open loop/closed loop channels.

Fast Company profiled Greenlight VR’s new report. Here is the link to Greenlight’s purchase page.

From Wired Goodness

Big Thinking/ReThinking Angie’s List: Our Talk with CEO Scott Durchslag

Angie’s List is an iconic brand in the home services space that now has 3.25 million paying customers, 10 million verified reviews, and continues to grow its customer and advertising base. But it faces a growing group of competitors that see greater opportunities in the space and smell blood in the water, including Amazon, Google, Home Advisor, Houzz, Porch and Serviz. It also faces pressure from impatient investors who are distressed at the company’s stock price and are seeking new scenarios for the company, including possible mergers or a sale.

Did Angie’s List squander its lead and wait too long to update its interface with customers, develop ecommerce features, or move away from a customer paywall model? New CEO Scott Durchslag – a veteran tech leader from BestBuy, Skype and Expedia who just came on in September — talked with Local Onliner today about his plan and vision for the company, which includes the company’s new guaranteed leads and quality program; efforts to work with key brands on special promotions and sales; build out the B2B presence; and evolve the company’s call center to sell new products.

His three-pronged message: the company looks better from the inside than the outside; remains way ahead of rivals; but has significant upside in exploring new business and sales models. “We look at it as a pyramid,” says Durchslag.

“At the top are the kinds of things we can do to take care of things” for members, such as hiring contractors and keeping their pricing in line. At the core are Angie’s relationships with advertisers and brands. SMBs who make up the core advertiser base aren’t having all their needs met. Angie’s List has valuable analytics and can really get them up to speed with digital marketing. Brands that want to be picked by consumers are also able to upgrade their relationship with Angie’s to drive new traffic and purchasing – perhaps via the equivalent of slotting fees. Merchant and brand relationships will also receive renewed attention via dedicated sales teams and other dedicated B2B services.

Durchslag says that the pyramid’s foundation consists of new ways to monetize the service, especially upselling existing members to premium tiers, and leveraging the non-members who only access partial services. Non-members currently make up 85 percent of unique visitors to the site. They can bolster ad sales, and also might be monetized by buying “single drink” options, for instance, he suggests.

While Durchslag emphasizes that the business is sound – it just had its first profitable quarter –there are always new ways to do things and create more efficiencies, he says. Take the company’s telecall center, for instance. To Durchslag, the “Care Center” is something that is not offered by competitors like Amazon and Google and helps to differentiate the service. It also serves as a state-of-the-art CRM facility. “It is a precious asset,” he says. But the company might evolve the nature of what it does, perhaps using its knowledge of customer needs to offer a wider range of services to members.

Booze As a Digital, ‘Shop Local’ Story: Craft Spirits Exchange

A key part of the Shop Local movement in recent years has been sparked by the rise of Craft Beer, with many city and states dropping nuicense regulations inhibiting breweries from providing samples, selling food or selling take away bottles smaller than 22 ounces. At this point, the contribution of breweries, wine makers and craft spirts to local economies has been felt in hundreds of markets.

The role of digital media in promoting and selling local beer, wine and spirits has been a significant one, with social media rating products and creating buzz for products and events; directories pointing consumers in the right direction; and now, on demand services like Driz.ly delivering booze directly to your door (a fad, ok?)

One entrepreneur I’ve watched carefully over the years is Steve Gilberg, who created the Happy Hours website and then Facebook directory of bars and drinks, which partially inspired my creation of the Marketplaces research program for BIA/Kelsey; and then also created Wine Twits, a national happening of promoted wine with hundreds of local parties tweeting away.

Gilberg’s newest project is Craft Spirits Exchange, a website and app dedicated to promoting local craft spirits to craft enthusiasts around the U.S. He’s CMO for the Exchange, reporting to Luis Troccoli, a native New Yorker who was inspired to launch the exchange in 2013 when he moved to Florida and couldn’t get access or even news about his favorite spirits.

The Exchange is a spirits marketplace that combines bright editorial; more than 1,100 profiles of spirits products; community reviews; and marketing from local craft retailers. More than 40 states now allow direct shipping of spirits, acting as major contributors to local commerce. My own state, Oregon, has more than 60 spirits producers. Troccoli says a major role for the exchange has been to enable east coast consumers to buy west coast spirits, and vice versa.