Web Trends

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Trendwatching in this month’s briefing had collated some useful statistics:

  • In the US, almost USD 400 billion of store sales (16% of total retail sales) are directly influenced by the web as consumers research products online and purchase them offline (Forrester Research)
  • UK sales online are over 4 billion GBP per month (Brand Republic)
  • 2006 South Korean ecommerce transactions reached 13.45 trillion won (USD 14.29 billion), year-on-year growth of 26% (YonHap)

They also christened narrow-focus social networks ‘nethoods’, property developers are utilising online services to help build a social community in new developments. This was also extended to frequent flyer programmes and online book clubs

Word of Mouth

 

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I was asked the other day by a friend what did I think was the sign of good PR and I replied that truly great PR would be PR that you weren’t aware was PR. And in this answer lies the root of the problem of what is wrong with word-of-mouth marketing.

Some of the biggest word-of-mouth marketing campaigns on Facebook such as the HSBC student overdraft backtrack and the campaign to get Cadburys to reissue the Wispa chocolate bar were both orchestrated by marketers (the NUS and Publicis on behalf of Cadburys). I know that this was the case and so does the general public. It is easy to assume that people are stupid because they like Hello magazine, but they know when they are being sold to or played.

Real-world world-of-mouth marketing is almost anti-marketing. Why the picture of Tiger Balm? I have never seen a Tiger Balm advert, yet it has been recommended to me dozens of times by friends and colleagues to help with colds, helping you staying awake when your driving or muscle aches. The same is true for New Balance trainers which doesn’t have a marketing budget and third-party endorsements like Nike or adidas/Reebok yet still manages to attract the cool kids and avoid employing sweatshop manufacturing.

I wanted to finish this post with a quote from Jonney Shih, CEO of Taiwan-based technology company ASUSTeK in a recent interview with DigitimesCurrently, we don’t think working on sales and marketing is a good idea. We believe that if ASUSTeK can do the best job it can, then there is no concern that the market will have a bad impression of the brand. Think of it this way, most people only know of the highest mountain, Everest, not many remember the second highest.

You may have not heard of the ASUS eeePC (made by ASUSTeK), but it is one of the fastest-selling laptops this Christmas on Amazon, putting it in the gadget hotness zone with the Nintendo Wii, Nintendo DS, the Nokia n810, the Apple MacBook and the Apple MacBook Pro. Nuff said.

Lufthansa disappoints with online bait-and-switch

I am looking to travel to Hong Kong again in January and looked at booking my ticket via Lufthansa.

I like their quality of service and I have never had a bad experience with them. I think that their frequent flyer scheme is one of the fairest available and they fly from London City Airport making my occasional commute to our Munich offices much easier.

However my online experience of Lufthansa when I went to book my tickets to Hong Kong didn’t live up to my expectations. The best way for me to show you what was wrong is for me to show you two screen shots.

If you want to see these pictures full-size click on them to take you through to the original flickr page that I have them hosted on.

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This a screen shot where I was asked to select my preferred dates for flying to and from Hong Kong. (I had already given them a date range and destination on the previous page). Ok the important things about this image are the price in the yellow boxes (1,002 GBP) and the text at the bottom of the page which says:

‘The total price is in Pound Sterling(GBP) and includes airfare, taxes, fees and other charges for 1 adult.

A Ticket Service Charge of 10 GBP per person applies for residents of United Kingdom, when choosing a ticket by mail.’

Seems fair enough, they are not the cheapest way to fly, but I think this looks like good value.

Contrast this with screenshot number two which is what I saw immediately after selecting one of the flights and clicking the continue button (the blue one on the bottom right-hand side of the screen).

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Whoah, with one click, the lowest price changes to 1,456 GBP a naughty 454 GBP price increase happens. That’s 935.83 USD at the time of writing (this was a public service announcement for our American readers.) This is what is known amongst grifters and con-artists as a bait-and-switch.

As you can imagine, I wasn’t terribly happy and booked instead with another airline (British Airways), despite their pretence that air travel is glamourous (yeah right) and poor baggage return rate. Now I am not saying that Lufthansa are a bunch of con artists or charlatans, but I am saying that it is a shocking user experience on their website. I am holding off judging Lufthansa more harshly, until I have answers to at least some of the following questions:

  • Why the sudden price hike over one screen change?
  • Why wasn’t it explained on screen?
  • Why can I not take advantage of the lower price?
  • Why had no one thought about the likely customer reaction to this?

I would be interested in hearing Lufthansa’s take on this and would be happy to publish their response.

Will I be flying Lufthansa in the future? It depends on how the online experience changes and whether they were deliberately trying to bilk me out of the money. At the moment I probably won’t fly with them if I am paying myself.

Notes and recollections

 

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Here is the notes that I made mostly from the morning sessions of the mobileYouth trend workout. There will be presentations and videos of the event available from the site next week.

Graham Brown – mobileYouth

Event introduction

  • Young people spend about 1.3 trillion USD per year, 130 billion of which is spent on mobile services (or roughly ten per cent of their total income). This impacted the sales of chocolate, music (in the form of CDs) and cigarettes
  • Young people spend an average of 20 – 25 GBP per month
  • Mobile services of young people grow at about 4.5 – 5.0 per cent year-on-year. This growth comes at the expense of, and in competition with television, entertainment and clothing

Brown asked the audience of mobile operators to think beyond ARPU and instead think about lifetime spend. By the time that consumers are 33, they have already completed half their lifetime spend. Yet this is the age group that is currently most attractive to carriers looking at the ARPU model. It was an interesting counterpoint to marketers viewing the grey market as the next big opportunity.

Mobile marketers run the particular risk of ending up with an aging or aged brands due to the virtue of a misplaced focus. Brown delivered a case study on Harley Davidson to prove his point. In the 1960s circa Easy Rider, Harley Davidson was a youth brand, now their average customer age is 51 years old.

If things carry on this way, in a little over twenty years, their customer base will be 70, possibly only ready to ride a zimmer frame. According to Brown the consumer lifecycle begins at 10 years old.

Geoff Goodwin and Marc Goodchild – BBC

Children still view as much children’s television as ever, however their consumption of television overall has declined as expected

The BBC is now looking for integrated media properties and partnerships. No one organisation has it right, hence the need for partnerships. Young audiences churn at an incredible rate so the BBC is constantly having to rework itself to remain relevant, rather than having the brand advantage that most people thought they had.

Important mobile technologies for young people are FM radio, SMS and Bluetooth. This low-level tech is because most young people get by with found technologies: hand-me-down mobile phones, an old TV from the living room or a discount model picked up at ASDA or Tesco and vintage computers from work or the living room.

Roundtable: Johan Winbladh mobile channel editor – Danish Broadcasting, James Davis head of mobile – News International, Michiel de Gooijer business development manager – Endemol, Giovanni Maruca director interactive and mobile EMEA – Paramount and Tim Hussain head of mobile monetisation – AOL UK

Mr Winbladh was the hawk in the discussion: mobile devices weren’t ready to put to the kind of mobile experience that users wanted and the industry thought was appropriate, whereas the other audience members felt that the latest generation of mobile handsets and all you can eat tariffs are readdressing the issue.

Maruca was excited about the way that advertising could be delivered in a context aware manner. By adding value to the advertising it can become unobtrusive and essentially no longer be advertising, but information.

Roundtable: Richard Miller general manager for consumer convergence – BT and Derrick Heng director segment marketing and communications – Singapore Telecommunications Limited

BT’s vision of Wi-Fi as a mobile technology is at odds with the GSM/W-CDMA orthodoxy of the mobile industry.

SingTel in contrast has complete fixed and mobile integration and pay TV. SingTel segments its customer base and actively manages the customer relationship with a long-term view. They provide email to mobiles on an ad-funded revenue model. In Singapore the killer apps for mobile usage by young people were email and SMS. By comparison audience member Jonathan MacDonald sales director of Blyk pointed out that for UK mobile users the three killer apps are voice, SMS and the phone’s alarm clock.

The audience debate then raged, the killer application for young people is doing the basic things well, providing decent customer service, having a decent relationship with the clients and not charging them excessively for that relationship.