Customer Experience Crossroads

This just in: Facebook payments, gold dispensing ATMs

Virtual currencies, Micro-payments and Facebook

Lots of people have been dabbling in Facebook as a financial interface, including linking to secure banking, apps related to peer-to-peer lending sites, and many more. Facebook is now testing virtual currency in partnership with GroupCard. Users would buy credits for 10 cents each from Facebook, paying with their credit card. They could then use credits to pay for things inside Facebook. The intention is to enable merchants to offer services for small amounts on a viable basis. Facebook would take a cut, generating a new revenue stream for the application.

Facebook may succeed here, where other microcurrencies have not. (Remember Beenz?)  Someone is going to get the micropayments thing right eventually, I think. This is not so different from the credits you buy on stock art sites such as istockphoto (and probably other places too).

Loyalty points are practically a currency, since you can buy a wide variety of items with points now.

Source: Finextra, June 1, 2009 Facebook begins testing virtual payments system

Gold works better than flowers department

A German precious metals trader, TG-Gold-Super-Markt is testing ATMs that will dispense gold.

Thomas Geissler, chief executive, told Reuters that the initiative is "more than a marketing gimmick.' The current plan is to place as many as 500 machines in locations like rail stations and airports.

I'll say one thing: it's easier to carry a gold wafer with your luggage than a bouquet. And the value lasts longer than a stuffed animal or a key-chain. It even works as an environmentally correct gifting strategy, since it's unlikely to wind up in landfill. 

Sources: Finextra, May 29, 2009. German firm plans gold-dispensing ATMs.
Reuters, May 19, 2009. German firm plans gold ATMs to meet growing demand.

This just in: the $40,000 coupon; direct mail on the cheap

The $40,000 coupon

In today's Globe and Mail, [my daily addiction]  I saw this coupon for $40,000 off advertising agency fees on a contract of $250,000 or more. Offered by The BrainStorm Group. [New clients only, of course. There's no escaping the switching bonus anymore.] 

It certainly caught my attention. I really loved how easy it was to find the coupon page online through their sponsored link on Google. A good illustration of how they can coordinate the elements in a campaign. Very impressive web site too. And you've totally got to admire the chutzpah of this approach. Are they desperately seeking clients? Perhaps. But with brio.

Direct mail on the cheap

Seeing the coupon above put me in mind of a clever direct mail campaign launched by a small business in my neighborhood.

A nice looking woman -- very well dressed -- was dropping letters off in the neighborhood.
The letters introduce a local law firm, Jennifer A. Bishop.

"Dear Friends: We  are a small firm centrally located at the corner of Yonge and St. Clair Avenue East (building has subway access) specializing in ...  deliver highest quality personalized legal service at a reasonable rate.... Price for a standard residential purchase or sale is $499, regardless of the cost of the property..."

I think I saw Ms. Bishop herself dropping letters off in her neighborhood to potential clients.

You've gotta love this approach. She probably met a ton of people, and got a chance to say hi and shake hands, maybe proffer a business card. Extend a little free advice. Invite people to come in for a consult. Door knocking works well for politicians. It was a strategy heartily endorsed by Edward Jones. Why not lawyers? 

And other than the time involved, you can't beat the price. [And what a radical strategy to show prices for basic services?]

But is it really about taste? Starbucks to launch instant coffee

Advertising Age reports that Starbucks has been working for decades on instant coffee, and are about to launch it into the market. The new product will be called Via, according to reports, and is being called "soluble coffee".

"The instant product has been many years in the making and is designed to mimic the taste of store-bought Starbucks -- the point the company is expected to make in its marketing for the brand."

It might be the right economy for this product, but I have never thought the brand was about the taste. I've spoken to many who don't care that much for the taste of the coffee, but they like the store experience, and the convenience of connecting at locations everywhere for informal meetings.

Can you take a "third place" experience home with you

This just in: iPhone mobile credit card processing

The Apple iPhone will soon be functional as a credit card processing device, according to this report on Finextra. 

What this means is that your landscaper, the seller at the flea-market, and other small enterprises will be able to process your credit card using their iPhone as a mobile card authorization unit. There are monthly fees and such, but that's already standard in the credit card world.

This is a potentially huge greenfield market. I've been wondering why PayPal hasn't launched some capability like this, accessible using the browser function on smart phones.

A commenter on the Finextra story says that Treo has had this capability for some time. He recounted how a tour guide was easily able to upsell customers mid-tour because of the simple availability of card processing. It is well known that having-card users tend to spend more than cash users, and this has long been a selling point for merchant services.

Resources:

iPhone world story jan 28, 2009

Credit Card Terminal information from the developer, InnerFence

Blue light specials at retailers starting early

I was in the underground concourse below TD Centre yesterday after a meeting. There's a Laura shop in a prominent location. This is a mid-priced brand that appeals to working women (not executives, but not call centre clerks either). Lots of professional clothes, stylish, many private labels.

Signage throughout the store announcing 15% off everything in the store.

And the most amazing part: a woman with a portable loud-speaker system, walking through the store and announcing things along these lines...

"...everything in the store 15% off today, with even more specials over the lunch hour. Come on in ladies, you won't believe these deals..."

This is among the priciest retail space in Toronto, and this is the state of affairs.

This just in: fast emerging trends in a weird environment

Spam scams emerge on Facebook

I got my first spam scam e-mail generated by Facebook today. These have always come via spam e-mail in the past, but this one came as a Facebook message, thereby cutting through some of my e-mail filters. And because it carried a trust-mark (Facebook message addressed to me) I read it. Here's a sample:

I came across your profile on Prosper page. Just wish to share an investment online with you that you may be keen.
It's an investment with good returns at 10% per 30days. It's web-based and available worldwide.
With only USD1,000 investment, your TOTAL returns will be 220% with USD100 credited every 30days.

This scam arrived via the Prosper Facebook app. Prosper, you will recall, is one of the peer-to-peer lending operations.

My take: this kind of thing has the potential to remove a lot of the appeal of Facebook for legitimate financial firms of any description. It's not a question of real risk to the brand so much as an issue of lying-down-with-dogs and feeling dirty by being in the same vicinity. Another tragedy of the commons. Not a good thing for Facebook or anyone else for that matter. 

See our previous articles on Prosper and peer-to-peer lending:
More than Scrabulous: Credit unions, P2P lending now on Facebook, July 15, 2008
Another entrant in the peer to peer lending show, Oct. 21, 2007
Update on Zopa and Prosper, online un-banks, Aug. 17, 2006
Financial Services Innovation Watch: The E-Bay Model Comes to Banking, March 30, 2005

Financial brands damaged by credit crisis

Speaking of lying down with dogs: that's pretty much the situation for financial brands right now, according to a number of firms that track brand equity. Read all about the ugly situation in Marketing Daily in After Bailout, Financial Brands Twist in the Wind, by Sarah Mahoney.

According to Robert Passikoff of consultancy BrandKeys, quoted in the article: "This has fundamentally shifted consumer perceptions of financial service companies." He goes on to suggest that it will take five to 10 years to restore confidence.

I think Mr. Passikoff is a little high on that number, as we seem to have shorter memories. However, the whole thing puts one in mind of the airline crash scenario played out on a Mad Men episode.

What is most important right now to keep in mind is that this mess is not over. Not nearly over. The ripple effects will continue to emerge for months if not years. The story will be in newspapers through to the end of the U.S. election, and beyond, it will be featured in magazine cover stories, and the book writing bonanza hasn't even started. 

RBC introduces SMS payments

Finextra reported today that Royal Bank is launching SMS payments capability, which would let people send money via cellphone. I see this having a lot more appeal for the under 25 crowd than e-mail payments, since they generally don't see e-mail as all that reliable.

The marketing of politics

Politics seems to be all about marketing. So much so, that you can now become a politician without having to get elected, as T. Boone Pickens seems to be doing. In his most recent newsletter he's inviting everyone to watch the presidential debate, and then log in to his chat afterward to discuss how the candidates performed on the issue of energy self-sufficiency.

After the debate is over, I want us to have an online chat about what we heard and what we DIDN’T hear the two candidates say about the foreign policy aspects of sending 700 Billion US Dollars to foreign counties every year to pay for the oil we are buying from them.

If Pickens' approach here works, we can expect to see a lot more of it. Very clever marketing.

This just in: Facecard for students

Facecard

Facecard is a new pre-paid debit card targeted to students -- it's prepaid and re-loadable, and usable anywhere MasterCard is accepted.

Although it uses the debit system, it isn't really a debit card so much as a variant on a pre-paid gift card.

Among the other features:

• usable at ATMs
• Friend to friend payments
• Loadable online by the cardholder
• Others can add to the balance like a gift-card
• Not a credit card, so no credit check is used or needed
• Parents can sign up their child

The major pitch on the site is that using a pre-paid card helps students avoid accumulating unnecessary debt and get control of their spending. Here's an excerpt from the member news section of the site:

On my birthday last year, I received probably 10 gift cards from friends and family. They were from 10 different stores ranging in amount from $5-$50. While gift cards are great and all, $20 at a nice clothing store won't buy you much.

This year is going to be different. Now when my aunts, grandmothers and friends ask me what I want for my birthday, I can say "I'd love some money on my facecard." And anyone, not just members, can put money on my card. All they have to do is come to facecard.com, click "Give Money," and they're on their way. Tada, a birthday made easy thanks to facecard!

The name appears to be a stroke of brilliance, at least as long as Facebook is around. The product is available to US citizens aged 13 and over.

This just in: lots of financial services news

There seems to be a lot happening in the financial services space these days, some of it good, and some of it clearly a wrong turn however well intentioned. [None of the latter shown below]

Underbanked Americans

The Centre for Financial Services Innovation, whose focus is the low end of the demographic spectrum, has just released new research results on the underbanked. Some 40 million households are unbanked (no active bank account) or underbanked (may have a bank account but is actively transacting with non-banks).

The demographics are interesting: more than half own a home, more than half are white/non-Hispanic, and almost half work full time. As you read the attitudinal and behavioral material, the surprises just continue. A six page download presents a good summary, including an overview of 8 attitudinal segments.   There is also a free webcast scheduled for July 8.

Payments in your watch

Why have your paypass on your key-fob when you could have it in your watch? That's the reasoning behind the launch of the Altair's PayPass wristwatch that uses MasterCard's contactless payment technology. This is not the first such innovation, but we're bound to see more of this in the future, through the competing technologies related to telephones or cards. Reminds one of the cable versus telephone battle that still wages. (Read more about this in Finextra here).

Visa on Facebook target SMBs

Visa has launched a new social networking application through Facebook target SMBs. The incentive to join is $100 toward targeted Facebook advertising, an interesting idea. Features include expert Q&A that would be similar to LinkedIn. I applaud them for trying this, and building an application that could potentially  provide support for things other than information. What I'm not sure yet is how you prevent these things from becoming a really giant version of the Yellow Pages. (Thanks again to Finextra for the heads up)

Mobile P2P payments

MasterCard has launched a P2P payments network accessible through your mobile phone, in the US. The story from Finextra references Tower Group research suggesting that the growth curve here is exponential. The target market here is the underbanked -- the 40 million households referenced above -- and the huge international remittance business.

The major impediment to widespread adoption of this kind of service will be that it threatens the existing infrastructure. But people are bound to like the idea of having the bank machine in their pocket.

Teens and technology

I did some research on teens use of technology that gives strong support to the notion of the handset as the main access device. Imagine mobile computing without having to drag a laptop around -- how cool would that be! I put the slides for a recent presentation on this project on slideshare.

This just in: WD-40 finally fixes the straw problem

WD-40 and the Red Straw

Marketing Daily reports that WD-40 has finally created an attached "red straw," which formerly was taped to the side of the can. The company has been making the product for 55 years, and losing the straw has been customers' most consistent complaint. The straw is used to direct the lubricant into hard-to-reach places. My question is this: why on earth did it take them so long???

Where the heck is Susan these days?

If you've noticed a notable absence of the usual biting insight on this blog, it's not because my brain has shriveled away. Not yet anyway. [Or perhaps I'm just the last to hear.] But I'm having the annual spring convergence of events, among which the following:

[1] Various volunteer commitments came home to roost [Learn from my mistakes. Assume that all such commitments will take 4 - 5 times the expected time, and generate 10 times the anticipated e-mail. Plus if you start having fun, you're cooked.]

[2] I've just bought a Vespa 150S, and I am as excited as a kid going to Disneyland. It's more distracting than Facebook, and I haven't even taken delivery yet

[3]  All the clients who weren't in a rush in February are in a rush now [Of course I don't mean you, I know this is a genuine crisis. I mean those other clients.] The projects that had no clear timetable, they have one now. That delivery date that was flexible before? Now it's not.

[4]  I have a personal life. Every now and again I get reminded of that. Sorry, but that's just the way it is. Sometimes the blog just has to wait.

[5]  When the sun is shining, we all want to go play. If you live somewhere the sun always shines, you may not understand this. But here in the great white north, this is the time of year we all crawl out of our cave, grab our ball glove, and put a smile on. It's hard to focus on reports and proposals when the crocuses start to come up.

Things will get back to normal soon. But I bet you are having the same problems, and you're probably as behind on your blog reading as I am!

[Yes, it's red. Everyone asks. And I need to know where I can find cool-looking girl-type scooter boots. If you see some, call me immediately.]

This just in: total sensory environments; emotions; service recovery; avoiding middle markets

Welcome to our Friday roundup of bits of interesting info...

Environmental design smelling better all the time

Why would Credit Suisse be attending a marketing research conference about fragrance? Perhaps because they were thinking about their five senses project. Customer experience guy David McQuillen is leading the charge with pilot branches that play customized music that varies throughout the day, as well as providing a blend of aromas that make people feel at ease. [And you thought your new carpeting was cool.]

Advances in chemistry are enabling more scent related products, including devices that will let you design your own scents, scent devices connected to computer games, and even scents in fabrics. (Businessweek April 18, 2008)

Emotions in advertising

I heard Terry O'Reilly speak a few weeks ago, and came across this in my notes. "Emotions should be felt, never stated." How very true this is. Consider a vodka ad that evokes the emotion of feeling special, versus one that says, this vodka can make you feel special. Makes total sense. But it's easy to lose that clarity when you're in the middle of message development.

He had other gems too. Consider these:

"People don't want to be targeted, they want to be understood"

"The only way to explode a paradigm is to be armed with a detonator called 'the insight'"

Service recovery at Air Canada

Avid reader Bruce W. told us about his recent experience with Air Canada on a five hour flight. When the entertainment system didn't work, apologies were made and vouchers were handed out. Vouchers were reported to be for "future travel" or Aeroplan points. When BW went to collect via the internet, there was a choice of "Goodwill Options", either points or a travel voucher. But how could he choose when no value was provided for each? A quick call to the customer service centre revealed that the points option is usually a better deal. But you couldn't tell from the form.

Still, it's a big improvement over the past. It's just such a big hill for them to climb.

Avoiding the mushy middle

Coach, the luxury handbag maker, announced in March that they are opening 40 more stores and are upgrading stores to the larger flagship format (as large as 5000 sq.ft.). They see more of their sales coming from the high end stores, and also have research that suggests women are still splurging on bags even if they cut back elsewhere.

Tiffany, on the other hand, is opening smaller stores that focus on the lower end of the product line.

The middle is often the danger zone, where you are too expensive for the mass-market, and too ubiquitous for the luxury market. Plus the middle is where all the competitors are.

Doesn't this just make you wonder where Starbucks is going to go?

This just in: bits of news to start your Friday

There are so many interesting things going on in the world, are there not? I want to share more of these with you as I hear about them, but they're not all worthy of a full post. So starting this week, I'm going to periodically bundle up a few of these in a Friday "This just in."

These summaries will not have our regular level of analysis. For those of you using an e-mail subscriber, I'll keep the title the same so you can easier manage your in-box. 

So off we go.

Everyone can be a creative director: Getty Images has sound
Stock art libraries put high-quality photos and illustrations in more hands, and gave visual artists new outlets. Now the same thing is happening to sound. Let's say I want to add some sound to my PowerPoint presentations. Or to my website. I can now do that *legally* and relatively cheaply, with someone else managing the rights.

The me generation plans for transition: Requiem For You

You don't have to wait for a composer to write something in your honor, you can commission a Requiem or Laudatio to mark the major milestones in your life (or death, as the case may be). Vienna-based company Requiem For You will commission a composition to commemorate your life and achievements, arrange for an audio recording in your choice of media, and arrange a performance.

Social networking for the stock-option crowd:  FT Executive membership forums

You have to apply. You have to qualify. And a one-year membership costs 1700 £.

Social networking for the no-stock-options worker bee

The latest to add internal social networks is Scotiabank. IBM and other major tech/knowlege organizations have been working on internal social networks to share knowledge for a while now. Seeing a bank join in suggests that there will be much more of this happening in future. Will it prove to be a competitive advantage? Stay tuned.