aberdeen research: the mobile channel unites marketing and it

Opposites Attract The Mobile Channel Unites Marketing and IT

July 2011

Andrew Borg, Omer Minkara

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based

July, 2011

Opposites Attract

The Mobile Channel Unites Marketing and IT Research Brief

Aberdeen’s Research Briefs provide a detailed exploration of a key finding from a primary research study, including key performance indicators, Best-in-Class insight, and vendor insight.

Organizations today are under increasing pressure to grow their market presence in the face of heightened market competition and an overcrowded and noisy media landscape. In May of 2011, Aberdeen surveyed more than 220 end-user organizations for its Metric-Driven Mobile Marketing study, scheduled for publication in August 2011. The research findings indicate that high customer adoption rates of mobile devices, combined with the constant need to increase customer loyalty by improving customer satisfaction are driving organizations to invest in implementing marketing campaigns and programs through the mobile channel.

Forty-four percent (44%) of the companies in this survey with existing mobile marketing activities in place indicate that they are developing mobile software applications ("mobile apps") as a critical part of their efforts to reach consumers through the mobile channel. This Research Brief will outline the key factors driving marketing and IT roles within an organization to invest in mobile application development as a key marketing initiative, the collaborative relationship between marketing and IT in developing those applications, as well as the business processes required to drive organizational success from these initiatives.

Mobile Apps as Market Drivers Fast Facts: Mobile Apps & Opt-ins

√ 3-fold Increase: Respondents who included mobile apps as an integral part of their mobile channel mix saw the growth of opt-ins in their CRM database increase 3-times more than those whose mix didn't include mobile apps

In May of 2011 Aberdeen surveyed more than 1,300 business executives for the Quarterly Aberdeen Business Review. Mobile app development was identified as one of the top priorities for IT spend, with 41% of respondents indicating that they had already designated a portion of their IT budget for mobile app development over the next 12 months.

Although all types of mobile apps are experiencing a high level of interest, such as Business-to-Business (B2B) and Business-to-Employee (B2E) apps, one key driver has been the growth of interest in consumer- or market-facing apps. Business-to-Consumer (B2C) mobile apps have emerged as potent weapons in the marketer's quiver, in part because they offer several distinct advantages over more conventional marketing vehicles: they can deliver immediate and measurable benefits relevant to the individual end-user (such as secure remote data access, customized promotional offers, and personalized messages); they can be optimized to take full advantage of the capabilities of the specific mobile platform being used; they can track and adapt to user behavior and geographical location, and they are able to extend a branded User Experience (UX) that can be tightly integrated with

research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

Opposites Attract: The Mobile Channel Unites Marketing and IT Page 2

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the UX experienced through other marketing channels. They are a brand manager's dream come true.

Impact on Company Performance Survey Demographics

The demographic breakdown of survey respondents by their role in the organization is as follows:

√ Marketing: 41%

√ IT: 11%

√ Other (e.g. Operations, Sales): 48%

Aberdeen's Metric-Driven Mobile Marketing study uncovered several findings relating to the respondent company's performance; comparing those companies using mobile apps as an integral part of their mobile marketing programs to those who do not (Figure 1).

Figure 1: Year-over-Year Performance Improvement

11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%

12%

Customer satisfactioncompany revenue

Percent of respondents, n=224

11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%

12% Using B2C mobile applications

Non-users

Marketing s contribution to

11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%

12%



11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%


Non-users

11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%

12%



11.4%

6.1%

7.8%

1.5%

0%

2%

4%

6%

8%

10%


Non-users

Using B2C mobile applications

Non-users

Marketing s contribution to

Source: Aberdeen Group, May 2011

"Integrating the mobile channel into our marketing campaigns and programs has been instrumental in growing our top-line revenue, which is a key priority of our organization."

~ Director of Sales, Large Software Company, USA

In the study Aberdeen collected data from more than 220 organizations from around the globe, including both IT and marketing roles, to identify the Key Performance Indicators (KPIs) most frequently utilized to measure the results of their mobile marketing initiatives. The top two performance measures indicated by all companies were customer satisfaction (70%) and marketing's contribution to company revenue (61%). This affirms the relevance of these two KPI's in ascertaining the effectiveness of marketing campaigns executed through the mobile channel.

In addition to these performance measures, the results showed that companies using mobile apps as integral to their marketing campaigns grew the number of opt-in subscribers in their prospect/customer database more than three-times greater than non-users on a year-over-year basis.

Goals Driving Mobile Marketing Investments Juxtaposing the data provided by respondents in marketing and IT roles illuminates the two primary goals that are driving investment in the mobile channel: increasing top-line revenue, and improving customer retention. Research shows that while both goals are top of mind for marketers and IT

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roles, increasing top-line revenue is a greater focus point for marketers. IT respondents on the other hand focus comparably more on improving customer retention (Figure 2).

Figure 2: Marketing vs. IT Goals

50%

39%41%45%

0%

10%

20%

30%

40%

50%

60%

Increase top-line revenue Improve customer retention

Percentage of respondents, n=224

Marketing roles

IT roles50%

39%41%45%

0%

10%

20%

30%

40%

50%

60%

Increase top-line revenue Improve customer retention


Marketing roles

IT roles

"Our entire organization is being prepared for the mobile market; all our services are now available at the convenience of consumers through mobile devices."

~ Finance Manager, large media company, USA


Why does overall business contribution matter to the marketing or IT departments, which have historically been viewed as 'cost centers,' not revenue generators? All departmental budgets have been under significant pressure during the economic downturn, and there's a growing demand to quantify the direct contribution of all functional roles to the overall health of the business. This has been a primary driver for the increased interest in augmenting the 'gut instinct' of the traditional marketer with a more modern, metric-driven approach. Tracking the improvement in marketing's contribution to company revenue reflects well on the marketers' ability to influence top-line revenue through specific campaigns and programs.

On the other hand, the increase in customer satisfaction we saw in Figure 1 enables IT departments to achieve their objectives from supporting mobile marketing initiatives by improving customer retention as seen in Figure 2. This reinforces the "customer-driven business" maxim, that the most successful businesses are the ones that best understand the needs of their customers, and address them with the right communication at the right place at the right time. As a result, they are more likely to hold on to their most valuable asset: their customer base. Aberdeen's March 2010 study Providing a 360° View of the Customer - Better Service - Higher Sales reported that top performing organizations that successfully managed customer interactions to ensure customer satisfaction had 22% greater customer retention than all other respondents.

IT Needs Marketing Aberdeen's November 2010 study Enterprise-Grade Mobile Applications: Secure Information When and Where It's Needed described that while the


http://www.aberdeen.com/aberdeen-library/6284/RA-customer-experience-retention.aspx

http://www.aberdeen.com/aberdeen-library/6527/RA-enterprise-mobile-applications.aspx




marketing function often drives the initiative and sometimes the budget for mobile apps, the best practices of top-performing organizations (see sidebar) highlight the crucial role that IT plays (Figure 3).

Figure 3: IT-Driven Mobile App Development Processes Best-in-Class Definition

The November 2010 Aberdeen report Enterprise-Grade Mobile Applications: Secure Information When and Where It's Needed defined Best-in-Class performance as follows:

√ 94% Frequency of timely decisions

√ 62% 1-year change in the frequency of timely decisions since the inception of the mobile app initiative

Cross-functional team toCross-functional team to

initiative conforms to IT

IT standards for mobilesoftware deployment

define mobile softwarerequirements

Mobile application

service mgmt. framework


67%

64%

50%

29%

42%

26%

10% 20% 30% 40% 50% 60% 70%

Best-in-Class

All Others

0%



Cross-functional team toCross-functional team toCross-functional team toCross-functional team to

initiative conforms to IT



Mobile application

service mgmt. framework


67%

64%

50%

29%

42%

26%

10% 20% 30% 40% 50% 60% 70%

Best-in-Class

All Others

67%

64%

50%

29%

42%

26%

10% 20% 30% 40% 50% 60% 70%

Best-in-Class

All Others

Best-in-Class

All Others

0%



Source: Aberdeen Group, November 2010

Sixty-seven percent (67%) of Best-in-Class organizations have IT standards in place for software development, over 2-times the frequency of all other respondents. They understand that well-designed and well-supported mobile apps define a superior end-user experience at product launch, as well as over the long term. Sixty-four percent (64%) institute cross-functional teams that include marketing and sales to define mobile app requirements, ensuring that the apps meet the needs of end-users; this practice occurs more than 50% more frequently among Best-in-Class organizations than it does amongst all others And Best-in-Class are almost twice as likely to conform their mobile app initiative to a standardized IT Service Management (ITSM) framework, which ensures a continued high-level of usability and support, as well as minimizing cost and risk to the organization.

Does Marketing Really Need IT? The current Metric-Driven Mobile Marketing study corroborates the importance of establishing cross-functional collaboration between marketing and IT departments. In fact, when asked about the departments involved in the execution of mobile marketing initiatives, 76% of companies utilizing mobile apps in their mix indicated that marketing and IT have a strategic alliance to manage marketing initiatives within the mobile channel.

The commitment of IT is further demonstrated by their investment in mobile marketing programs. As shown in Table 1, 35% of funds to support mobile marketing activities are sourced from internal IT teams or external IT services budgets.







Table 1: Mobile Marketing Budget Resources

"As a result of the rapid increase in our customers' use of mobile devices, we have dramatically shifted our resources (both on a strategic and tactical level) to successfully integrate the mobile channel in our marketing programs."

~ Director of Marketing, large telecommunications services

company, USA

Department

Percent of Budget

Allocation Internal Marketing 45%

External marketing services (e.g. marketing, ad or PR agencies, consultants)

17%

Internal IT team 33%

External IT services 2%

External integrated Marketing and IT services (e.g. digital solutions agency)

3%


Defining, establishing, and managing customer, prospect and company data is an essential ingredient of mobile marketing. It helps organizations ensure the integrity and security of customer information, as well as the appropriate use of data to build precision marketing campaigns that comply with industry and government regulations. At a fundamental level, metric-driven mobile marketing will only be as effective as the accuracy and currency of the data gathered; as a consequence, internal IT resources are the ideal partner to provide marketing with a sound technical basis for data viability and analytics.

Eighty-two percent (82%) of the businesses using mobile apps indicated extensive involvement of IT to plan, build, launch, and manage the data-driven processes at the core of mobile apps. This affirms the need for marketing departments to establish close collaboration with their peers in IT to effectively leverage the valuable data within their marketing campaigns and programs.

Case in Point: Garanti Bank on the Move Garanti Bank is one of Turkey’s largest retail banks with 817 branches across Turkey and five foreign branches in Luxembourg, Malta and Northern Cyprus. The bank operates in an extremely competitive global environment providing retail, corporate and private banking services to over 10 million customers.

Garanti ’s success is based on outstanding customer service, and they see product innovation as a key competitive advantage. Garanti has been responsible for a number of banking firsts not only in Turkey, but across the global banking industry, including its mobile banking service.

The Turkish mobile market is one of the world’s most dynamic: with a population of nearly 75 million, the second largest in Europe, it has a mobile penetration level approaching 100%. In comparison, only 12.3% of the population has access to broadband internet, making the mobile phone the ideal channel for web services.




It was against this background that Garanti saw the opportunity to offer greater convenience and superior levels of customer service through a new mobile banking service. Garanti had already deployed an advanced internet banking infrastructure, but it wanted to take it one step further by providing its customers with the ability to access their bank accounts while on the move.

"Our goal was to offer the broadest set of mobile banking services to Turkey’s mobile subscribers on the device of their choice. We have been extremely pleased with the results.”

~ Barbarous Ugan, Head of Delivery Channels, Garanti

Bank, Istanbul, Turkey

Core to Garanti’s mobile banking strategy was eliminating the need for customers to download or activate software – they wanted them to be able to access the mobile banking service directly through any internet-enabled phone. Customers would be able to check the balance of their account, monitor the due dates and balances of credit cards, receive mini statements, buy and sell shares on the stock market, request a loan, transfer money, reach market information and even top up their mobile phone - all through their mobile device of choice.

Garanti needed an integrated mobile banking solution that would make the service available to all mobile users, no matter what mobile device they had. As Barbarous Uygun, Head of Delivery Channels explained, “ We needed a vendor with experience in delivering carrier - grade mobile software solutions across a wide variety of mobile devices. We also wanted our mobile banking service to mimic the online site as much as possible so that users would be familiar with its operation.”

After a rigorous vetting process, they selected Antenna Software to develop their mobile banking solution. Antenna’s decade of experience in delivering solutions to some of the largest banking enterprises, mobile operators and media companies worldwide made them Garanti’s top choice.

Antenna’s mobile banking module was integrated with Garanti’s existing banking platforms, website and security infrastructure for user authentication and data encryption. Garanti also valued Antenna’s advanced UI design, as well as its patented web rendering, agile content adaptation, rapid deployment, and support for the widest possible array of mobile devices and features, with over 8,500 devices supported.

As a result, Garanti was able to create a seamless customer experience from online to mobile, reduce customer service costs while maintaining high levels of customer satisfaction, and provide the mobile banking service over any customer’s phone. This has enabled them to serve 310,000 mobile banking customers with a monthly average of 200,000 secure financial transactions and 4 million mobile web page views.

Mobile Apps: Recommended Actions The broad adoption of powerful mobile devices among end-users has created what is essentially a new marketing medium, whereby consumers have vast amounts of information at their fingertips; and when opted-in, marketers can amass a vast amount of valuable information about those consumers' behavior.



© 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

With all the "noise" in the mobile channel, businesses are attempting to rise above the din to deliver targeted and relevant marketing messages to individual consumers. The use of mobile apps provides companies with a precise tool to reach consumers where they live: in the mobile channel, with the right message, at the right time.

Aberdeen recommends the following actions to marketing and IT professionals that implement mobile app initiatives to maximize the business benefits.

For Marketers: • Listen closely to the market. Interacting with prospects and

customers to ascertain their needs and desires in mobile access can empower the mobile app initiative to be most effective. Data from the May 2011 Metric-Driven Mobile Marketing study shows that businesses that deploy targeted and relevant mobile marketing campaigns by reaching consumers through appropriate platforms outperform their peers that don't by 32% in annual revenue growth.

• Reach them where they live. Consider a mobile channel strategy that integrates mobile apps and mobile web – it shouldn't be an either/or proposition. Approximately half (46%) of all companies targeting consumers through the mobile channel are incorporating the mobile web as an essential element of their strategy. A comprehensive and coordinated approach which reaches the consumer with relevant offers no matter what mobile platform they're using, leveraging native mobile apps, web apps, and mobilized web sites, should be the objective.

• Think beyond the campaign. The mobile channel is about increasing customer intimacy and an expanded dialog that unfolds over time. It's ultimately a long term, strategic approach to increasing customer loyalty.

• Collaborate with IT to ensure the security and compliance of apps accessing end-user data. The growing use of mobile devices brings additional responsibilities to each business function, inclusive of marketing. The breach of a company's security system can expose valuable customer information to any hostile entity, which could result in significant financial risk, including loss of business from existing customers as well as legal costs. Marketing departments should consult with their peers in IT to ensure the security and integrity of end-user data. In organizations where marketing and IT are working together as strategic business partners those risks are mitigated; they also outperform those that don't collaborate by approximately 2-times in terms of the percentage of increased business obtained from their existing customers, year-over-year.



For IT: • Streamline marketing's data management processes.

Understanding the workflow that enables marketers to capture, record, manage, and update end-user data collected from mobile apps is a key factor in streamlining those processes. In this way, IT departments can empower their peers in marketing to build more personalized, relevant, and robust B2C mobile apps; which serve the need of marketing to accelerate prospects through the sales cycle, thereby improving marketing's contribution to company revenue goals.

• See marketing as collaborators, instead of provocateurs. Cross-functional teams that incorporate both IT and marketing staff help mobile initiatives find common ground. They can ensure that mobile apps meet the needs of end-users, serve the requirements of marketing, and are secure and compliant with IT policy. Establishing this internal process allows multiple departments to provide input into mobile marketing initiatives, reducing redundant processes between different departments as well as facilitating buy-in from key stakeholders within the organization. Streamlining potential overlaps between departments through such an entity enables companies to reduce customer acquisition costs by 1.3% on a year-over-year basis, while organizations without this process experience a 1.5% increase in the cost of customer acquisition.

• Help marketing take the long view. Although you can appreciate their need to rapidly deploy mobile marketing campaigns to respond to competitive market pressures, you can bring a broader perspective to collaboration; focus on building sustainable differentiation with a strategic vision. The correct infrastructure can help ensure long-term growth and success, versus scrambling to meet the demands of the campaign "du jour."

For Both Marketing and IT: • As a team, clearly communicate the business value of the

mobile channel initiative. The ability to identify the business value of mobile marketing initiatives through performance measures, such as improvement in company revenue, enables businesses to link mobile marketing activities to specific financial outcomes. Tracking, measuring and reporting of mobile campaign results is a primary driver of an organization's ability to identify the benefits of its mobile marketing activities. This is essential for obtaining executive-level support of those activities: organizations that implement this strategy are 60% more likely to gain executive sponsorship for their mobile marketing initiatives.

• Come together. Marketing and IT need to come to a common definition of program success for the mobile channel strategy. Define mutual objectives that reflect the validity of both world views: for marketing, measures that reflect market growth and



brand penetration; for IT, measures that track channel performance, reliability, accessibility, and reach.

For more information on this or other research topics, please visit www.aberdeen.com.

Related Research Optimizing The Marketing-to-Sales Lead Lifecycle; March 2011Enterprise Mobility Management 2011: Mobility Becomes Core IT; March 2011 Email Marketing: Customers Take It Personally, December 2010 Enterprise-Grade Mobile Applications: Secure Information When and Where It's Needed, November 2010 Marketing Asset Management - It's More Than Just An Image, November 2010 On-Premises Mobile Retail: Empowering Deeper Customer Engagement, October 2010

The 2011 Marketer's Agenda: Accessing and Understanding Customer Experience Data Is Life or Death; July 2010Enterprise Mobility Management: Optimizing the Full Mobile Lifecycle: May 2010 A Busy Spring in Mobile City: Mobility Moves from Enterprise Periphery to Core IT, May 2010 More Mobility – Less Budget: Enterprise Strategies for the Current Economic Downturn; March 2009

Authors: Andrew Borg, Senior Research Analyst, Wireless & Mobility ([email protected]) Omer Minkara, Research Associate, Customer Management Technology Group ([email protected])

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This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2011a)

http://www.aberdeen.com/

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