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Innovative Mobile Marketing via Smartphones: Are Consumers Ready?

March 1, 2013

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Ajax Persaud, PhD (Canada) and Irfan Azhar, MEBT (Canada)

Today, the smartphone is central to the lives of most consumers regardless of age, gender or education level. In fact, many consumers cannot seem to live apart from their device - it is always on and being checked. The widespread adoption of mobile phones represents a significant marketing opportunity to reach and serve consumers anytime, anywhere.

The latest smartphones have larger and higher resolution screens and offer consumers a wide array of features, including mobile web browsing, thousands of applications, email, instant messaging, text/picture messaging, video, music playback, and much more. Further, smartphones can employ technologies such as RFID and e-wallets to enable a whole range of marketing innovations not available until now. Most telecommunication carriers offer consumers flat-fee unlimited data and social media plans that encourage consumers to use their smartphones more often and for a wider variety of purposes. The increased capabilities of the smartphone combined with the decline in costs for devices and data plans are having a very positive impact on consumers' smartphone usage. In fact, the smartphone is emerging as consumers' device of choice to access the Internet, conduct online searches, and complete financial transactions (comScore 2012).

The smartphone has opened up a wide range of mobile marketing possibilities that were previously unattainable with either traditional or Internet marketing. For example, a consumer in a physical retail store can use an app on his smartphone to make immediate price comparisons and check customer reviews while looking at the product in the store. Moreover, mobile marketing tools such as text and multimedia messaging, mobile apps, Bluetooth, location-based services, and QR codes combined with social media sites such as Facebook and Twitter enable marketers to integrate offline marketing strategies with mobile marketing strategies to offer consumers a wider range of pull-based services and promotions.

Paradoxically, while marketers see the mobile phone as a communication channel with virtually unlimited possibilities to reach and serve customers, consumers adopt mobile phones primarily to enhance their private and social lives. Most consumers view their smartphones as personal devices for business, entertainment, and social networking. These two very different perspectives could have profound implications for the sustainable success of mobile marketing. A deeper understanding of why and how consumers want to participate in mobile marketing is key to the development of successful mobile marketing strategies.

The aim of this study is to deepen our understanding of the factors that motivate consumers to engage in innovative mobile marketing via smartphones. The results of our study can also have important implications for real estate agents looking to develop or fine-tune their mobile marketing strategies.

Our Study

The data in our study were collected through a web-based survey. A total of 428 completed questionnaires were obtained and used in the analysis. The survey focused on consumers' intentions to participate in innovative mobile marketing services and mobile phone usage behavior. Most of the questions asked respondents to indicate their level of agreement or disagreement with a series of statements on a scale of 1 to 5, where 1 = strongly disagree and 5 = strongly agree. The survey instrument was developed based on a review of the literature and in consultation with potential respondents and experienced researchers in the field of e-business. The survey instrument was then pretested on a small sample of 15 smartphone users who were asked to complete, evaluate, and suggest improvements for the questionnaire. This procedure generated minor editorial improvements and was used to fine-tune the survey instrument.

Our Study's Implications for Real Estate Agents

The study has several important implications for real estate agents. First, before embarking on a mobile marketing strategy, real estate agents need to develop a thorough understanding of what home buyers want when they decide to go mobile. Although it may be easy to reach buyers through their smartphones, it does not necessarily mean they want to receive messages from you. And although a customer may participate in one campaign does not necessarily mean they want to participate in all of your mobile marketing campaigns.

The study found that consumers prefer pull-based marketing communications, that is, marketing messages and services that they request or voluntarily opt-in to receive. Consumers also show a strong preference for targeted, personalized, in-context information and services. This suggests that real estate agents should tailor their initial marketing communications towards creating awareness of who they are, the services they offer, and how they can assist home buyers achieve their goals. The idea is to encourage dialogue with potential buyers in order to gain their trust and better understand their needs. Building this type of relationship is a key first step in influencing buyers' purchase decisions and positive word-of-mouth recommendations, which can generate new leads and sales.

Further, building brand trust is extremely important for mobile marketing. Real estate agents should use mobile social media (e.g. Facebook, Twitter, Youtube, etc.) more for building their own brand reputation than for selling. Agents can also enhance the value of their brand by using tools such as QR codes, SMS, and location-based services to provide potential home buyers with relevant, accurate, and up-to-date information on the home-buying process, available homes, comparative information on home prices, features, and neighborhoods, locations, maps, and driving directions. This type of approach tends to encourage potential buyers to become more trusting of the agent as they learn more about her and perceive the information provided as trustworthy and helpful. Also, seeking home buyers' permission to engage in mobile marketing is crucial for developing a trusting relationship. The goal is for real estate agents to ensure that their mobile engagement with home buyers is mutually beneficial without being too intrusive.

Next, real estate agents should ensure that their mobile marketing efforts always offer the specific value or benefits individual home buyers are seeking rather than assuming that all home buyers want the same information or services. For example, if a home buyer is looking for information and services that will enable him to execute the home buying process efficiently and conveniently, then agents should provide only relevant information and services in a format (audio, video, graphics, text, website, etc.) that is easily comprehensible. Real estate agents could use a variety of mobile pull-based tools such as mobile apps, SMS, and QR codes to get potential home buyers to contact them or to request information, which could enable agents to quickly learn what the potential home buyer needs and how he prefers to be engaged. For example, if a potential home buyer is looking for additional home purchase-related services such as a moving company, a lawyer, a building inspector or a renovation company, then agents must be ready to provide references of reliable companies or individuals to buyers. On the other hand, if a home buyer is a price/value or bargain-conscious customer, then real estate agents could shape her expectations of such benefits by providing a variety of comparative information. Regardless of the expectations of specific home buyers, all information and services provided must be current, accurate, and delivered in a timely and easily understood manner.

Finally, real estate agents must make every effort to strategically integrate their mobile strategy with their traditional and web-based marketing strategies because home buyers may want to engage across multiple media. Home buyers shopping styles differ and while some may readily embrace mobile marketing for some services (e.g. information gathering), they may want to engage in a different way for other activities (e.g. discussing price). Irrespective of the benefits sought (e.g. efficiency, flexibility, convenience, value) from mobile marketing, some buyers may still choose to communicate and transact using traditional methods such as face-to-face or telephone.

To integrate mobile marketing strategies with traditional and web-based strategies, marketers must invest time and effort to understand the mobile marketing value chain -- that is, the technologies, people, processes, costs, and relationships involved in developing and executing mobile marketing. Real estate agents should choose a reliable and experienced mobile marketing vendor to not only develop and deliver integrated mobile marketing solutions but also to provide useful metrics on the effectiveness of the mobile strategy. This is extremely important for enhancing the value provided to home buyers, the brand reputation of agents, and to promote positive word-of-mouth and sales.

Conclusion

Smartphone adoption by consumers is increasing rapidly. The capabilities of smartphones have opened-up new possibilities for marketing that were previously not available. The real estate industry is a heavy service- and information-oriented industry, which makes it well suited for mobile marketing. Despite the seeming match between supply and demand for mobility, real estate agents should not assume that all buyers want to participate in mobile marketing. Agents need to understand what home buyers want when they decide to go mobile and to ensure that their mobile marketing efforts deliver value. Also, building trust and respecting the shopping styles of their buyers are crucial for mobile marketing success.

Appendix: Summary of Our Findings

The results of our study indicate that smartphone consumers are willing to participate in mobile marketing. The majority of responses indicate that consumers are open to receiving up to five marketing messages per day on their smartphones. Additionally, consumers also show a strong willingness to engage in innovative mobile marketing services that employ location-based, Bluetooth, SMS, QR and/or other advanced mobile marketing techniques (with an average rating of 4.6 out of 5). However, the majority of respondents indicated that they would only like to receive mobile marketing messages that are targeted to their needs and they opt-in to receive.

The analysis revealed some differences in consumers' intentions to participate in mobile marketing based on their age, gender, and level of education. For example, consumers over 35 years old tend to use their smartphones more heavily for utility or task-oriented purposes (e.g., email, news, research, maps, commerce, and banking) whereas younger consumers use their smartphones more heavily for social and entertainment purposes. No difference was observed in terms of consumers' willingness to participate in mobile marketing.

In terms of gender, both males and females are equally open to participating in mobile marketing. However, males and females differ in their response to marketing offers through their smartphones. Men are more likely than women to respond to offers distributed through their mobile phones. Also, men's usage pattern is somewhat different. Men use their smartphones for gaming, entertainment, and shopping, especially when incentives are offered. Women tend to use their phones more for social networking, research, and obtaining information on health and fashion. We also found that more educated consumers (those with graduate degrees and professional qualifications) place a higher value on the content they receive through their smartphones over discounts and promotions. These consumers place a premium on mobile marketing services that increases their shopping efficiency, convenience, and flexibility by providing relevant, timely, and targeted information and services.

Apart from these demographic considerations, our results also indicate that consumers' willingness to participate in innovative mobile marketing through their smartphones are significantly influenced by three other variables - perceived value, shopping style, and brand trust. Perceived value is the consumer's overall assessment of the benefits of a product based on perceptions about what is received and what is given up (Zeithaml 1988). Basically, if consumers perceive the value they are getting from participating in mobile marketing is high, they will be more inclined to engage in mobile marketing. Conversely, if consumers perceive the value as too low, annoying, or intrusive, then they may decide to avoid mobile marketing since they may conclude it is not worth the effort. Mobile marketing could provide greater value to consumers by making it easier, faster, better, or cheaper to accomplish a variety of shopping tasks. Our results indicate that consumers evaluate the benefits of mobile marketing differently. For example, consumers who travel frequently or lead busy lives find location-based marketing more helpful and of greater value because it reduces their search costs and increases their shopping efficiency by providing just-in-time, in-context, personalized marketing offers and services. On the other hand, value-conscious consumers place a higher value on discounts, promotions, and other financial incentives.

Trust is the foundation of online buyer-seller relationships (Hoffman et al. 1999). In the context of mobile marketing, consumers who are suspicious of or uncertain about marketers' motivations for engaging them may try to avoid their offers, while those who are more trusting are more likely to accept their offers. Our results indicate that brand trust is a key determinant in mobile marketing, especially with respect to location-based marketing. This is hugely important because location-based marketing uses tracking technology to determine a consumer's location in order to deliver context-specific, personalized information to consumers. Hence, it is more intrusive than other types of mobile marketing because it is capable of delivering marketing messages from virtually any company at any location with no concern about appropriateness. Respondents in our study indicated that they would be wary of messages from marketers or brands they do not know or trust and of messages received at inappropriate times.

Consumers' shopping behaviors, patterns, and scripts in both online and offline contexts vary widely (Mattson & Dubinsky 1987). For example, consumers looking for personalized or customized products know exactly what they want and their shopping patterns and behaviors are different from those who prefer standardized products (Pine 1993). Consumers who are interested in customization are more likely to participate in the design of their own products and believe that customized products offer greater value because they more closely meet their needs. Our study shows that consumers' shopping style is a key factor influencing their willingness to participate in mobile marketing. Those who see mobile marketing as inconsistent with their preferred methods of shopping will find it difficult to participate in mobile marketing. Conversely, those who view mobile marketing as a good fit with their preferred methods of shopping will embrace mobile marketing.

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References

comScore (2011), "2010 Mobile Year in Review," (accessed January 30, 2013), [available at: http://www.comscore.com].

Hoffman, D.L., T.P. Novak, and M. Peralta (1999), "Building Consumer Trust Online," Communications of the ACM, 42(4), 80-5.

Mattson, B.E. and A.J. Dubinsky (1987), "Shopping Patterns: An Exploration of Some Situational Determinants," Psychology & Marketing, 4(1), 47-63.

Pine, B. (1993), Mass customization: The new frontier in business competition, Boston, MA: Harvard Business School Press.

Zeithaml, V.A. (1988), "Consumer Perceptions of Price, Quality and Value: A Means-End Model and Synthesis of Evidence," Journal of Marketing, 52(July), 2-22.

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About the Authors

Ajax Persaud, PhD
Associate Professor of Marketing, Telfer School of Management, University of Ottawa

Dr. Persaud's research focuses on the commercialization of new technologies, R&D and innovation management, new product development, technology adoption, and e-business. Dr. Persaud received several nominations and awards for teaching and research excellence. His research has been published in leading refereed journals and peer-reviewed conference proceedings including IEEE Transactions on Engineering Management, Journal of Product Innovation Management, Journal of Technology Transfer, Canadian Journal of Administrative Sciences, Engineering Management Journal, and Technovation. He has authored/co-authored five books including Marketing, 1st Canadian Ed.

Irfan Azhar, MEBT
Project Coordinator, Canada Revenue Agency

Irfan Azhar is currently a Project Coordinator at the Canada Revenue Agency. He is interested in the advancement of mobile technology in Canada.

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