Mobile commerce offers SMEs a wealth of untapped business opportunities

As SMEs move into the next phase of growth, the worry remains how to achieve differentiation and USPs which create a distinct mind space against the competition and build a culture of innovation. In the fiercely competitive world, innovation is the only way forward for cutting though the clutter.

M-commerce (Mobile commerce) offers a tremendous opportunity for SMEs to achieve this innovation and ifferentiation. A revolution of sort is taking place in the world of telecom and commerce this year, as mobiles make their first attempt to replace the credit card and wallet. With over 300 million mobile subscribers in the market place, the Indian telecom market is undergoing a metamorphosis.

Increasing the average revenue per user (ARPU) is now on the top of the agenda, along with adding more subscribers. There are over eight million new subscribers being added into the wireless world each month. Hence with over 300 million customers, this offers a good opportunity for SMEs to embrace m-commerce. It becomes more pertinent when we realise that by the year 2010 the country is expected to have 500 million mobile subscribers.

What is Mobile Commerce?

Mobile commerce may be understood as commerce on the move. It is defined as the ability to charge an amount of currency to a mobile phone. It is the ability to conduct commerce, using a mobile device, while on the move. With ‘m-commerce’ the user can complete any type of transaction, including buying and selling of products, availing services, transferring ownership or rights, transacting and transferring money by accessing wireless internet service on the mobile handset itself.

Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. In the current commerce industry, m-commerce has entered travel, entertainment, information and retail sectors. There are clearly two sets of opportunities for SMEs – one, making their existing products and services available for m-commerce and the second, joining the value chain and becoming an m-commerce value chain partner.

These opportunities clearly exist in establishing industry standards for m-commerce transactions, biometrics, application developers and others which are still evolving.

While the following products and services are currently available on the m-commerce platform, many more are being conceptualised as you read:

Mobile ticketing

Information services

Content purchase and delivery

Mobile banking

Mobile purchases

Mobile brokerage

Auctions.

Retail and M-commerce

Mobile purchase allows customers to shop online anytime, in any location, using a mobile device. Customers can browse, order and pay using their mobile phone or any other mobile device, thereby completing a purchase on a mobile phone alone.

Brokerage, Auctions and M-commerce

Stock market services offered via mobile devices are gaining popularity across the world and are known as mobile brokerage. These services in their mobile avatar allow the subscribers to react to stock market developments in a timely manner irrespective of their physical location.

Snapdeal expects its online sales to cross Rs 2,000 cr in FY14

Online market place Snapdeal.com expects the total sale of products traded on its platform to cross Rs 2,000 crore in the next fiscal helped by its robust growth in the past two years and the growing popularity of e-commerce in India.

“We expect the sale of goods on Snapdeal’s platform to cross Rs 2,000 crore in 2013-14 fiscal on the back of a strong growth. We have maintained a growth rate of about 400 per cent year-on-year in the last two years,” Snapdeal.com Co-founder and CEO Kunal Bahl told PTI.

Besides, there has been a constant increase in the number of online transactions, which will also help Snapdeal increase its reach, he added.

Independent experts have estimated e-commerce segment to have more than doubled in India to about $14 billion in 2012 from $6.3 billion in 2011.

Last year, Snapdeal had said that it expects to garner revenues of about Rs 600 crore in the current fiscal, which will end this month.

According to Bahl, the company presently has 5,000 brands and over a million products listed on its website, which it expects to increase to 25,000 brands and 20 million products in the next 2 years.

Betting big on the growth of mobile commerce, Bahl said at present 15-20 per cent of the sales on Snapdeal comes through m-commerce.

“In the next 18 months about 30 per cent of the sales will come from m-commerce,” he noted.

According to a report by Internet and Mobile Association of India (IAMAI) and IMRB, India is expected to have close to 165 million mobile Internet users by March 2014, up from 87.1 million in December 2012 as more people are accessing the web through mobile devices and dongles.

On the outlook, Bahl said “2012 was a good year for firms like us and in 2013 the economic sentiment seems to be recovering.”

Launched in February 2010, Snapdeal employs over 1,500 people and delivers to more than 5,000 cities and towns in India.

MobileFirst: IBM asking companies to design mobile applications first, rest later

ING Vysya Bank, with around 500 branches and an additional 500 ATMs, is too small to compete with the banking titans directly. So it does what small companies do in such situations: use tact and finesse to lure and retain customers.

The bank was evaluating technology options to use mobility as a strategic edge, when it was attracted to an Israeli company, Worklight. This startup, set up in 2006, had a useful piece of technology.

It enabled companies to create, in one seamless process, an application that could work in any device: a laptop, iPad, iPhone, Android phone… Its capabilities were impressive, but there was one problem.

Worklight did not operate in India. This was in early 2012. Soon after, ING Vysya heard an interesting piece of news: IBM was acquiring Worklight.

IBM, which had worked hard to build formidable products and services in cloud and analytics, had suddenly found itself inadequate in mobility, a rapidly-emerging area that was becoming a conduit to these two businesses.

With IBM having a substantial presence in India, ING signed up with Worklight quickly. IBM went on to acquire more companies, totaling 10 in the mobility space in four years, and launched a brand called MobileFirst on Thursday last week.

“We are planning to double investments in mobility this year,” says Ed Brill, director of IBM Mobile Enterprise Marketing. MobileFirst, as the name implies, asks companies to turn their current development philosophy on its head.

Instead of making mobile applications an extension of their desktop software, IBM is asking companies to design mobile applications first and then think about the rest later.

For them to do this well, IBM has spread a splendid set of tools: a mobile development platform, a security platform, a mobile device management product, mobile analytics, an ecosystem which includes service-provider A&T (only in the US) and universities, and a plethora of services around of them.

Although not mentioned explicitly, it would include a cloud service also, often serving as a critical part of mobile services. Mobility is now considered as one of the mega trends affecting the IT industry, on par with three trends that defined and directed it earlier: Mainframe, client-server and Internet.

Many chief information officers and analysts now bundle mobility with other recent developments like social, cloud and analytics. These four trends are together called SMAC, a term that describes the close association between social, mobile, analytics and cloud.

All four areas are bustling with startup innovation. Big IT companies are watching them closely. Mobile applications have been growing slowly over the last decade, but mobile commerce had not, till recently.

Phones were not good enough then. The networks were slow. Enterprises had legacy applications that were not easy to extend to a mobile. So you could, in theory, buy stuff on the mobile or do other financial transactions, but customers were often put away by the poor experience.

Yet, many companies underestimated the power of mobile commerce. In just two years, a number of enabling factors began to coalesce into a powerful wind that pushed customers to mobile commerce.

Phones can now compute as fast as desktop computers five years ago. 4G took off in developed markets. Clever startups made mobile application development easier. Customers who have started complex transactions on their mobile are often left frustrated, and companies began noticing that they end up not making purchases.

“During the Internet days,” says Sowri Santhanakrishnan, vice-president of mobility at Cognizant, “the enterprises and the consumer had pushed equally hard. With mobility, the consumer is pushing the most, and also saying ‘I want my experience my own way.”

Companies did not understand the speed of change — Facebook is a good example — and struggled with the development of mobile applications. Phones had smaller real estate when compared to laptops.

There are a large number of these mobile devices, and each one needs to be treated differently. Mobile browsers were not good enough for complex transactions, as even HTML 5 is still not fully mature.

IBM says its products and services convert these problems into a revenue opportunity. Worklight helps customers build applications once and deploy everywhere.

The Rational Test Workbench helps companies test these mobile apps. The new Appscan for iOS — it had launched Appscan for Android devices — finds and fixes security issues in iOS applications early during development.

IBM Endpoint manager helps CIOs manage multiple devices that employees use these days. Tealeaf mobile solution analyses the mobile behaviour of customers and converts them into revenue opportunities. And so on, with more products and services. It is an impressive array to match for competition, but other IT companies are building their own strategies to penetrate this market.

The 5 Minute Guide To Cheap Startup Advertising

The following is a guest post by Rob Walling. Rob Walling has been an entrepreneur for most of his life and is author of the book Start Small, Stay Small: A Developer’s Guide to Launching a Startup. He also authors the top 20 startup blogSoftware By Rob, that’s read by tens of thousands of startup entrepreneurs every month and he owns the leading ASP.NET invoicing software on the market in addition to a handful of profitable web properties.

Imagine that you’ve just completed version 1 of your product and you’re preparing for launch. You’ve greased the wheels with a few bloggers, targeted some keywords with SEO, created a bit of linkbait, and scheduled the press release to launch in the morning. At this point your co-founder turns to you and says: “What are we going to do with the $300 we have stashed away for advertising?” Consider this your lucky day. The goal of this article is to provide you with the core of what you need to know about cheap startup advertising as quickly as possible, so you can start spending that ad budget wisely. Let’s get started.

Two Key Advertising Strategies

The half-life of advertising traffic is zero. This means that the moment you stop shelling out cash, the traffic stops. The problem is that with typical conversion rates of 1-2% you’re paying for 98 or 99 out of every 100 people to walk away and never come back to your site. To combat this inherent wastefulness of advertising, I have two key strategies I recommend no matter which method of advertising you use.

Strategy #1: Try to Get Permission

Seriously consider offering something in exchange for a visitor’s email address. It can be a free trial, a free report, or maybe even a free book. But gaining the means and permission to contact that customer again will increase your conversion rate over time in most cases. There is great power in an email list.

Strategy #2: Use Advertising to Test

Use advertising as a testing tool rather than a long-term stream of customers. Very few startups can withstand the cash outlay required to turn advertising into a marketing activity with positive ROI. Even if you figure it out, advertising is a volatile marketing medium. Prices increase rapidly in online advertising as new competition crops up or prospects grow bored of your ad and your click through rate drops. When this happens, all of the time you invested in optimizing your ad campaign is *poof*…gone. So instead of relying on ad traffic as an ongoing stream, use it for what it’s best at: the ability to generate a slew of visitors very quickly, and to be turned off just as quickly. This kind of traffic source makes it great for split testing and user behavior testing using tools like Clicktale and Crazyegg. It also gives you insight into how certain traffic converts for you. With properly tracked conversions and an ad on Facebook, you can determine that men from 35-45 convert at a rate 15% lower than women of the same age. This is valuable information, especially early in your marketing effort when you’re still trying to figure out the ideal market for your application. Often this is not the largest market; it’s the one to whom you can market for the lowest cost. As another example, with AdWords you can learn in a hurry which keywords convert for you, and which don’t. This is insanely valuable as you invest the time and money on the long-haul of search engine optimization. Knowing the keywords that really convertfor your business, as opposed to the ones that you think will convert, can save you piles of cash and many months of SEO effort.

The “First Five” Advertising Options

With the above strategies in mind, let’s look at the first five advertising options you should consider.

Option #1: Niche Advertising

As a startup, there are hundreds of general advertising options available, and thousands more niche opportunities. Depending on the niche you’re catering to you should be able to find a forum, blog, magazine or website in which to spend some ad dollars. The tighter the niche the better. Remember that niche sites tend to be cheaper to advertise on and drive more targeted traffic, which makes a huge difference in your conversion rate. (And if you’re not targeting a niche because you want your audience to be the “whole world,” you’re going to need a lot more than $300 in your ad budget). In general, if you are marketing to a niche you will know the sites to target. If you don’t it’s time to pound the pavement and find out what they are. By “pound the pavement” I mean search on Google and contact people in the niche to find out where they hang out online. Two reputable niche ad networks I’ve worked with in the past are:

• InfluAds – With an increasing number of advertising “communities” covering design & UX, startups and entrepreneurs, work & productivity and web development, InfluAds can work with budgets as small as the $300-400 range. They sell a minimum set of granted impressions, and if more traffic is available during a month then existing advertisers receive it for free. Image ads only.
• BuySellAds – Though they’ve traditionally focused on the design & UX space, BuySellAds is in the process of branching into many other niches. This image-only ad network was the primary source of traffic for a design-oriented website I owned, and made the difference between a few hundred dollars a month in sales, and a few thousand. Advertising is purchased by impression or on a monthly basis from individual advertisers, meaning each offers different pricing. But the minimum buy is very cheap – in the $10-$20/month range.

Option #2: Google AdWords

• Ad Format: Text or image
• Ad Components (for text ads): 25-character deadline, 2 lines of body copy @ 35 characters each, 35-character display URL
• Approval Process: Automated, with manual review if you trip a filter

A few years ago, Google AdWords was great for startups. Many niches were untouched, and 5 and 10 cent clicks were commonplace. But these days, the vast majority of niches worth pursuing have ever-escalating click prices as more advertising dollars move online, including dollars from large corporations that don’t blink an eye about spending $5 to produce a single visitor to their website. With a 1% conversion rate you need a $500 lifetime customer value to break even. This is more than a stretch for most startups who are scraping by on 0.5% conversion rates and sub-$100 lifetime customer values (at least to start with). But with Google carpet-bombing $75 AdWords coupons to every business in the civilized world, the number of advertisers, and thus the competition, is increasing. For the most part, the days of cheap clicks are over. The $1-2 per click I used to pay to advertise my invoicing software has become a negative ROI for me at $4-5 per click. But all is not lost. There is still a place in the backwoods of AdWords where the wild-west mentality (and cheap clicks) reign. That place is the content network. People traditionally think of Google AdWords as the ads that appear to the right of the search results. But the lesser known cousin of search ads are the ads that appear in every AdSense block you see around the web. These are ads placed through the Google AdWords content network. The content network is less targeted, higher volume, and typically much cheaper to advertise on, than the search results. While we don’t have time here to delve into specifics of how to place ads on the content network, the most consistent approach I’ve seen that works over the long-term is to use their cost-per-action tool called the Conversion Optimizer. There’s a great write-up of how it works from Patrick McKenzie of Bingo Card Creator fame, here. There are also some helpful tips on advertising on the content network here. And if you’re willing to drop a few bucks, by far the best AdWords book available is the Ultimate Guide to Google AdWords, which includes a section on using the content network.

Option #3: Facebook

• Ad Format: Text with required image
• Ad Components: 110×80 image, 25 character headline, 135 characters of body copy
• Approval Process: Manual (sometimes slow)

Facebook is still viable for startups with its ability to deliver 10-15 cent clicks under the right circumstances. But it’s a bit like the Wild West: if you approach Facebook advertising incorrectly you will pay a premium, around 75-90 cents per click. The value of Facebook is its ability to show your ads to exactly who you want to see it based on information in a user’s profile. You can easily segment on gender, age, location, relationship status and a number of other fixed parameters, along with thousands of interests and occupations you can target using keywords. The key to low cost Facebook clicks is having a high click through rate (CTR). The key to a high CTR is a combination of a powerful image, an engaging headline, and laser-focused targeting. Due to space constraints we’re not going to cover the basics of choosing a powerful image or writing an engaging headline. Not when there are perfectly good articles already written on the subject for those who would like to know more: choosing an image / writing a headline. But once your ad is written, there is a trick to achieving those 10 cent clicks. Based on a tip from my friend JD, I now use the following method with Facebook ads:

1. Target your demographic information so tightly that you can write a headline that addresses them specifically. Example: if you are selling shoes online to the U.S. market, create 10 different versions of the ad, one for each of the major metro areas in the U.S. Also include the qualifying “interests” keyword: shoes. Now make each ad headline address its group specifically, using a formula like “Need Shoes in [city name]?”
2. Start the ads with a modest budget of, say, $5-10 per ad per day.
3. After 12-24 hours review the ads. Some will have high CTRs and costs per click around 10-15 cents. Others will have low CTRs and clicks in the 80-90 cent range.
4. Pause the higher cost ads and increase the budget for the low cost ads to whatever you can afford; $100 per day or more per ad.
5. For a few days you will receive extremely low-cost, targeted traffic. But since you’ve chosen a small group of people, they will start to tune out the ad rather quickly. At this point your CTR will drop and your cost will climb. Pause the ad, and start over with new cities, new images or new headlines.

This approach requires ongoing maintenance but if you can generate targeted, 10-cent clicks it’s worth the effort.

Option #4: StumbleUpon

• Ad Format: not applicable
• Ad Components: just your URL
• Approval Process: Manual

I recently advertised my developer’s guide to launching a startup on StumbleUpon. The plus side of StumbleUpon is that all clicks are 5 cents. The downside is the bounce rate is high since people are basically channel surfing. I achieved a 96.88% bounce rate in my experiment, with an average stay of 2 seconds. I wonder if it was something I said? In my test, only 25 visitors stayed longer than 5 seconds. I paid $50 for 1000 clicks, but since only 25 of them stayed long enough to read anything, I effectively paid $2 per click. Your mileage may vary, but through this and other experiments I’ve gathered the following tips for advertising on StumbleUpon:

• Your #1 goal is to get stumblers to stay longer than 5 seconds. Your #2 goal is to get them to up-vote your page. Paying $50 for 1000 clicks is one thing. Having it go viral and receiving 10,000 clicks for the same price is another.
• Don’t send StumbleUpon traffic to a landing page that asks for an email address. StumbleUpon users are notoriously fickle about providing their email.
• People stumble to be entertained, so if your page doesn’t have the potential to go viral or turn into linkbait, you will not likely fare well.
• Blog-like content and videos seem to work best. Anything that resembles a traditional landing page will bomb.

Option #5: Reddit

• Ad Format: Text with optional image
• Ad Components: 70×70 image, title, URL
• Approval Process: Manual (two-day lead time)

Reddit uses an interesting approach for their ad pricing: advertisers bid a certain amount per day, all of the money goes into one big pot, and each advertiser receives their share of the impressions based on the percetage of funds they contributed. It’s a simple system, but it means there’s a bit of uncertainty about what you’re going to get for your money. However, Reddit has the potential to provide some very cheap clicks – I’ve seen as low as 3 cents – if you play your card right. Similar to StumbleUpon, Reddit provides your ad with the potential to go viral. Gabriel Weinberg has agreat write-up of the 20,700 clicks he scored for 3.14 cents each for his new search engine Duck Duck Go. His eye-catching image and tech-focused startup served him well with the audience. As he says:

First, a search engine ad is a good fit for reddit ads in general. It has broad market appeal and redditters in general like trying out new technology. Second, I think the ad is particularly well structured. The circular duck icon draws your attention, is contrasting to site colors, and sticks out because it is a circle (as most images are square). I believe the title also has appeal.

Gyutae Park also has a nice write-up of the 434 clicks he purchased for 9 cents each here. One of my recent experiments was a bit more pricey: 187 clicks at 40 cents each. My lackluster performance was a combination of landing on a competitive advertising day, and using a poor-quality header image. In retrospect, I have no idea what I was thinking using this unreadable image: Reddit ads are so simple (just two visible components) that the only tip I have is self-evident: your image has to rock, and so does your title. It’s all about choosing an image and headline that makes people click.

Conclusion

To conclude, I want to reiterate what I said early in this article: unless you have deep pockets think of advertising not as a long-term traffic strategy, but as a testing tool to improve your website and find out more about your ideal visitor. Few bootstrapped startups can withstand the cash outlay required to turn advertising into a marketing activity with a positive ROI, but that shouldn’t keep you from testing the waters to find out for yourself. I look forward to hearing about your advertising experience and recommendations in the comments.Like this site? Help spread the word.

How to Hire a Marketing Agency

The process of hiring  a Marketing agency feels old… and somewhat broken.

What used to be an experience about finding a true, valuable partner (someone who will sit there with the brand managers in the darkest of nights trying to get the brand just right) has morphed into a vendor/supplier type of relationship. Yes, there are some exceptions, but we live in a world where a Chief Marketing Officer’s lifespan is under two years long and it’s not a much better track record for the average agency either.

RFQ? RFI? RFP?

As procurement continues to play a more predominant role in the choosing of an agency, and as search consultants become that much more commonplace, there has not been much attention given to the concept of agency search reform. Instead, most experiences and initial outreaches revolve around a request for standard information or a request for a proposal. Both steps are checkbox littered in an attempt to create a balanced playing field for the competing agencies. These documents and exercises may explain how an agency positions itself along with how it thinks both strategically and creatively, but that’s only a fraction of what a brand should be looking for.

Fits like a glove.

A lot of the question answering in text form can be removed and discarded (saving a lot of time and energy on both brand and agency side) and replaced if the brand committed itself to three one-hour in-person meetings. Let the agency introduce you to its space, to the people and to the work (and vice-versa). The brand should send a creative brief over and sit in as the agency team reviews the document and discusses initial strategies and areas that might be interesting to explore. I know this is going to sound antiquated, but go for lunch with the agency people or go to an event together. Try to figure out if the culture, people and work is a fit for the brand.

Don’t box out of your weight class.

It’s not just about size (how many people the agency employs), but I’ve often seen brands work with agencies that are either too small or too big – in terms of capabilities. There are certain agencies that are good at servicing very big, multi-national brands with steady and ongoing work, there are agencies who are  good at servicing start-ups and small-to-mid-sized businesses, and yes, there are agencies who lie somewhere in between. Brands – like professional fighters – should try to box in their weight class by ensuring that their agency partner not only has the competencies to deliver the final product, but understands the complexities of what it takes for that brand to be successful.

Look for lateral experience.

It’s always interesting to see a brand that would like an agency partner that has direct experience in their industry. It’s understandable. If an agency has worked with a competitor, odds are that they understand the industry and already have a perspective on what it takes to win. It’s safe. The truth is that lateral experience is how to really inject a sense of innovation and newness to the marketing. I once heard an insurance company ask their agency to figure out who is the best at selling insurance online and beat them. My only thought was, “why look at who sells insurance best online, when you can study Amazon – a company that is proven to be one of the best players in selling online… overall.” Having lateral experience (worked in another industry but selling to a similar audience) is – without a question one of the easiest ways to breathe new life into a brand’s marketing.

Don’t ask for credentials.

Asking to see an agencies’ work is almost as bad as asking for their website URL. There’s nothing that a Google search box can’t tell you about an agency – from their work to awards to community recognition and beyond. If a generic online search can’t generate enough information to tell you the kind of work the agency does and the media attention generated from it, you may be best served looking for another agency. Great marketing work gets attention and that attention is usually indexed in the major search engines.

There is a better way.

It’s important to remember that a marketing agency is a service-based industry. An agency is only as successful as the work it accomplishes for its clients. That work is rarely created in silos or by one, specific, individual. It’s a team effort. The trick in choosing the right marketing agency partner is to find the right team to join your team (and that’s why you’re hiring them in the first place). You have to be confident that the relationship is as strong as the work and that the agency is truly acting on your behalf – as a partner (and not as a supplier). Mistakes and hiccups will happen regardless (if you didn’t have an agency to blame for the mistakes, odds are you would be blaming one of your employees), so be willing – up-front – to acknowledge and work with your agency partner to correct the path. At the end of the day, both the brand and agency don’t succeed when both companies are not firing on all pistons.

Yes, there is a better way.

There’s the old sales adage that, “all things being equal, people buy from those they know, like and trust. All things being unequal, people still buy from those they know, like and trust.” Choosing an agency partner is quite similar: work with a team that you like and trust… and a team that you have a keen interest in getting to know as well.

What do you think?