Create a New Channel: Does Wireless Deserve Another 15 Minutes?

In 2000, any business proposal with “wireless” or “mobile” in it got venture capital funding. By late 2001, every business plan with the words “wireless” or “mobile” was avoided. Other words have come and gone as well. Are those once-hip terms back again? If so, what have we learned from their first 15 minutes of fame that will help plan a mobile strategy that works this time around?

How can your company make money from mobile computing? Well, not every company can. And not every company should try. Mobile devices are like any other channel. They should be entered into with the same thought and understanding you employ before opening any other new channel (a store, Web site, catalog, or call center).

When we work with clients to create new channels and craft a multichannel strategy, we use a long checklist to help determine that channel’s viability. The checklist is used to assess the merits of any channel, not just wireless. Today, we’ll talk in the context of a wireless channel.

Here’s part of that checklist:

• Is the new channel necessary? Have you properly segmented your customers and determined if high-value consumers have an affinity for this new channel? Are these people heavy mobile users? Does your service provide information that’s so critical and time sensitive this segment needs immediate access to it wherever they are? Ordering a book with my cell phone seems unnecessary. Ordering a pizza when I’m 20 minutes away from my house seems like a great idea. Reserving a book at my local store while I’m on the way to pick it up sounds like a great idea, too.
• Would your high-value customer segments use this new channel? Part of the wireless movement’s failure back in 2000 was lack of insight into wireless users’ needs. Add to that very few people (in the USA, at least) had access to the wireless Internet via their handheld devices and cell phones, and there was little hope of achieving economy of scale. The net result was a bunch of wireless apps no one really used. They didn’t solve any problems for the few who actually were using them.
• Have you studied best practices in other industries or countries? Non-American readers realize the USA made a big mistake. It didn’t look beyond its borders to understand the best practices already in place in Europe (specifically the North) and Asia. Northern Europe already had huge mobile device penetration as early as 1997. I remember walking down a Stockholm street in 1997 and pointing out the tourists. They were the ones who weren’t using cell phones.

  Americans thought the mobile computing and wireless Internet access breakthrough would come when everyone could buy a book or CD while driving home in her car. Many major e-commerce players (such as Amazon and barnesandnoble.com) came out with “mobile” versions of their sites. Within a year, all these wireless divisions either closed shop or severely limited future development. Why? No one needs to buy a CD from his car while driving home. Lessons from abroad should have taught us much earlier about the power of text messaging and information services via mobile devices.

• Is your new channel differentiated? Have you taken advantage of features offered through this new channel? Web sites once mirrored newspapers and glossy marketing collateral before the Web channel came into its own. Interactivity and personalization became defining traits of the online user experience. Does your mobile application just look like your Web page, or does it take advantage of the medium (like most PDA touchscreens, an integrated telephone for mobile phones, or contact list/schedulers in most devices)? Does the information architecture take into account user paths and time sensitivity inherent in mobile device use? Can services or products be created specifically for this channel (like a call center with voice menus that are navigable onscreen before the caller is put on hold)?

  A great example of differentiated service is airlines enabling travelers to select a seat online. This isn’t easily mirrored in any other channel. With the proliferation of world phones, I wish my bank had a mobile feature so I could convert currency with an online calculator (with up-to-the-minute exchange rates), check balances, and transfer funds between accounts while I’m traveling.

• Is your new channel complementary? If you believe in a multichannel strategy (and you should), how much thought have you given to integrating your new channel with existing ones? Do customer interactions with this channel affect other ones? Do personal preferences carry over from one channel to another? Is there a benefit for customers to use more than one channel? If multichannel users are more loyal (they are), you should encourage cross-channel use. Don’t silo channel development or customer use of those channels.

Another 15 Minutes for Wireless?

We’ve only scratched the surface of questions that need answers before creating a new channel, but you should start to understand if a wireless channel is right for you. The crop of new mobile phones promise lots of enhanced ways to communicate, including built-in cameras, better text messaging (huge everywhere else in the world), and lots of personalization. Many countries use the mobile channel for marketing purposes. Your task is to ascertain if your company’s core products and services are interesting to mobile users and if those users are your customers.

For some, the answer will be a resounding “yes.” Don’t despair, however! Wireless is merely one more channel, in much the same way we’ve come to regard online as just another channel.

There are many other channels to consider if you’re creating a multichannel strategy. The questions above should help you determine which are right for your company, products/services, and high-value customers. Equally important, they also help you determine which channels aren’t for you.

Is your company right for a mobile channel? Do you agree with my (partial) new channel checklist? Let me know!

Until next time…

Jack

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