Welcome to my blog. I know you are very busy. You want the big picture and you don't have the time for the history lessons, you have people to verify the finer details. Someone sent you to this blog. Lets make this the most productive session of today.
WHAT YOU SHOULD KNOW
This is the CEO Guide to Mobile Strategy so it will be main points and summaries. This is a complex matter, so this will run 5,500 words and will take about 25 minutes of your time. At the end I have a bonus section for your associate to dig into more details and facts, with the 'appendix' section of some of the data, running another 4,000 words. It is clearly delineated.
So why mobile ie 'cellphones'. Why now? Four reasons: Biggest Reach, Tech Migration, Change in Behavior, and Competitive Advantage. After those 4, I have a short 'what next' part for you as well.
1 - Reach Is Biggest (ever)
Every Fortune 500 sized company uses three major technologies in roughly the same way: computers, telephones and the internet. Ten years ago only about one in three telephones on the planet connected to the cellular network, ie was a 'mobile phone' or what in the USA is called a cellphone. How big is it today? The mobile side of the telecoms business is now bigger, more connected phones globally are mobile than fixed landline phones. What of personal computers in use globally? Yes, mobile is bigger than that too. What of the internet? Yes, there are more mobile phones (cellphones) worldwide than all users of the internet. If you are a CEO with a techie bent, you may have known that already. I bet you didn't know this: today there are more cellphone subscriptions than all landline phones, plus all personal computers, plus.. yes.. all internet users - combined. Yes, 5.2 Billion currently active, paid cellphone subscriptions are in use worldwide, for a population of only 6.9 Billion people alive on the planet. Literally the per-capita penetration rate of mobile telecoms subscriptions is 75% of the total planet's population. Compare that with about 1.2 Billion landline phones, 1.2 Billion personal computers, and 2 Billion internet users at the end of 2010.
The reason you did not know this, is simply because it happened so recently, and so fast. In the past decade mobile telecoms (cellphone users) have become the widest-reaching technology on the planet, more mobile phone accounts than television sets, DVD players, videogaming consoles, radio receivers, wristwatches, alarm clocks... It was measured last year that mobile phones are used by more people than have access to running water, and more mobile phones used globally than toothbrushes. No technology ever has been this widely spread. Every economically viable person on the planet has a mobile phone, yes even in countries where the average wage is 2 dollars per day. Even in Africa the mobile penetration rate per capita is over 50%!
Why is this of interest to a CEO? I have many reasons, I will only use one. What is the most valuable resource your company has? Probably your employees. Now the fact you did not know. All of your employees have cellphones. I don't mean just the staff at your HQ in the USA. I mean all of them, literally! Not just in the USA, globally! Not just middle managers and sales staff and office workers but everyone. I mean literally everybody. Even the janitors, the cooks, the cleaning ladies; even the temps that come in for a couple of hours of work, hired from the temp agency. Every employee in every office you have, across the globe, from California to Canada to Cameroon - will carry a cellphone (every day, everywhere).
WHAT YOU PROBABLY DIDN'T KNOW
We come to the second part of the story. The key message is not that each of your technology platforms as you use them today will become extinct within your reign as CEO; that you may have known already. What you probably didn't notice yet, is that all three are headed on a rocketship ride to mobile, and I am not talking about Alabama. For now, you the CEO need to see the big picture so you can guide your company wisely.
2 - Technology is migrating to mobile
We go back to your three main technology platforms, the computers, the telephone system and the internet. These three are all migrating... yes... to mobile! Today, the FCC reports that more than one fifth of all US homes have 'cut the cord' and abandoned their landline phones. That may seem like a lot. It isn't. In Finland, where this trend started, more than half of all homes that once had a landline, have abandoned them. Today globally, out of all telephones in use, less than one in five is a landline phone.
I am not here to tell you to chuck away your expensive telephone system (although at some point in the future you will). I only want to show you, that a gigantic shift is happening right now. Were you aware that we are now marking time, and your office telephones system will become obsolete before you retire? Keep reading, it gets worse.
What is happening in the computer industry? The computer industry is now shifting from the personal computer to smartphones. Note what I am saying. A smartphone - like the iPhone and Blackberry that you carry - is classified as a 'proper' real computer, no kidding and no fiddling with definitions or marketing spin. The computer industry is in agreement, the CEOs of each of them said the same thing. Hewlett-Packard. Dell. Toshiba. Lenovo. Acer. Apple. Not one or two. All six biggest PC makers say smartphones are computers. I am not here to argue, that smartphones should be considered computers. I am here just stating the fact, that the computer giants all agree - all agree - that a smartphone is a true computer.
This year 2011 will be the first year when more smartphones are sold worldwide than all other computers of any other type, including mainframe computers, and all forms of PCs from desktops to laptops to tablet PCs like the iPad, combined. I am not saying smartphones will somehow 'kill' the personal computer but that the most prevalent computer by type, worldwide, will shortly be the smartphone.
What of that last of your three technology legs, the internet? Did you see what Google's CEO Eric Schmidt said last year? He said Google's new strategy is 'Mobile First'. They have been saying for many years now, that the future of the internet is... mobile! And its not just Google the biggest internet cmpany saying so, so say all the big internet companies from Yahoo! to Facebook. The internet is also migrating to mobile.
The transition from the current PC style internet to the newer mobile internet is still in its early stages, and will take many years. I do want to emphasize, that mobile will not kill off the traditional internet, so this is more of a total transformation of the internet as we know it rather than an end of it. For you the CEO, the important thing to know, is just that there is yet another shift happening - it is that the internet itself is migrating to mobile.
But how is that transition? Some analysts have been predicting that within a couple of years, more than half of all internet access will be from mobile phones. Now the shocker: those predictions are actually out of date. IBM and Nokia have been reporting for a year already, that the half-way point has passed. Today more than half of all internet access worldwide is from mobile phones already. The reason many US based analysts and pundits are not quite aware of this, is because the USA is behind on this trend. It started in Japan 12 years ago, and today most of the biggest countries by the number of internet users report that they have passed the half-point, such as China, India and Russia. More than half of all internet users today access the web on a mobile phone, not a PC.
You may have read of different views or your internal departments may talk of alternate scenarios. Some in the landline telecoms business will argue that the future of (what remains of) the landline is something called VoIP (like Skype and Vonage) and that we'll use our PCs to handle our voice calls. That is fine, VoIP itself is also migrating to mobile, led by Skype. Some in the PC industry say their future lies in 'cloud computing'. That is fine, ask them what role smartphones play in the cloud. They will say that smartphones play a central role to cloud computing! And some internet gurus talk of social networking (Facebook, Twitter, YouTube etc) transforming the internet. That is fine, but the Social Networking companies all see their future also headed to mobile.
In this blog I am pointing out to you, that for Fortune 500 type of companies, all three of your main technology platforms will end up in the same end-state of mobile. The US titans of each of those three industries sing in unison, that the future of their industry is mobile. Whether that transition happens directly to mobile, or through a middle-stage (VoIP, Cloud computing, Social networking), they all will end in mobile. I am not here to claim that, I am referring to US based industry leaders of each of those industries, who all agree.
Taken individually these are all major changes. Added together, for your business, this is at least a storm of the century (and lifetime), this may be the storm of the millenium. A cataclysmic event. In such moments of total disruption, those with the vision can capitalize on the change and make fortunes. Build empires. And in the process become legends immortalized. Do you see now, why you have to have a mobile strategy? You probably had not grasped the sheer scale of the threat to your company's survival. There has never been such an upheaval to your existing processes. Up to now, I have outlined the threat. Now lets talk about the opportunity.
WHAT YOUR RIVALS DON'T KNOW
That was the easy part, now the more clever bit for the smart CEO. Welcome to part 3 of the story. The real opportunity for Fortune 500 companies today is not the easy part that everybody is writing about in Time and Newsweek about so-called 'smartphone applications' like on the iPhone. There is indeed a huge opportunity in mobile today, but it is not what you thought it is.
3 - Change in Behavior
So far, as a USA based CEO, you have probably been thinking of my writing in the context of your own personal use. So when I say 'cellphone' you have probably been thinking of your own uses of your own phones, like email on your Blackberry, and your voice calls and voicemail, and perhaps some apps you've loaded onto your iPhone. Your first thought, when thinking of your mobile phone, was not 'SMS text messaging'. That would be very reasonable. Until very recently, most American cellphone owners did not even use SMS text messaging, and those who did, seemed to be kids or perhaps TV viewers voting for American Idol.
So lets get to the meat of this article. What is the only thing landline phones can be used for? Voice calls. Mobile phones can be used for voice calls too. But every single mobile phone in use on the planet, including the oldest second-hand crummy and worn Nokia basic phones in the deeps of Africa - can do one other thing equally as well, something that no landline phone can do. It is SMS text messaging.
Lets go to the evidence. From 2009, in the USA, among cellphone owners, the primary use of the cellphone today is no longer voice calls - it is SMS text messaging (said the US cellular industry association, the CTIA, in 2009). I am not writing here to tell you it is 'possible' to use a cellphone to send some short messages. I am writing to tell you, that normal everyday American citizens love SMS so much more than voice calls, that they prefer SMS! This is no accident, it is a global trend, reported for many years before in countries as far from each other as Britain and New Zealand.
The shift of voice calls from the fixed landline phones to mobile cellphones is obvious, blatant and almost 'any fool can see' that. The shift from voice calls to SMS is more subtle and deceptive, it is far more disruptive and it opens up enormous opportunities.
How many people use SMS? 4.2 Billion people thats who. SMS is twice as big as the internet! SMS has 3 times more users worldwide than email. SMS is 2.5 times bigger than television. SMS is 8 times as big as Facebook. SMS is the most used data application on the planet by a mile. No, not by a mile: by a lightyear. And it is now cannibalizing voice calls. And remember, the majority of cellphone users in America say they prefer SMS to making voice calls.
That was voice calls. But its even more destabilizing than that! SMS is cannibalizing email! Yes, email use has plateaued, some say peaked, and for example in the USA today, only about 160 million people use email on their internet connection. But SMS text messaging is used by 215 million Americans today. Send an SMS and you reach 34% more fellow Americans than by using email. And the rest of the world is even further ahead. Only 72% of American cellphone owners use SMS today (says Pew, 2010), the world average is 81% and in Europe it is already at 89% and China is past 90%.
What does the future look like? ChaCha interviewed young adults and teens in the USA about their tech preferences last year. When asked which form was their favorite way to communciate, young people prefer SMS over voice calls by 7 to 1; and young people prefer SMS over email by over 200 to 1! Don't think email can recover from this kind of wholesale rejection. It has seen its peak, it is all downhill now, and email will go the way of the fax, the telegraph and the carrier pidgeon.
Talking about peculiar obsolete forms of communication, what of your voicemail? Here too, the end of voicemail is in sight. Voicemail will be superceded by ... SMS text messaging! The Finnish Prime Minister had back in 2004 already his voicemail greeting saying "please don't leave me a voicemail message, send me an SMS text message instead." Thats not just somebody, thats the Prime Minister.
THIS IS SUBVERSIVE
Understand what I am telling you. That while you are witnessing an astonishing megatrend hitting all of your three tech pilars simultaneously, disrupting them totally and eventually replacing them - that mobile itself, the very definition of what it is to use a cellphone, has already changed.
You probably never thought that SMS could be a credible, valid 'professional' business communication tool. That is what we used to think of email in the 1990s and of fax in the 1980s. But SMS has gone mainstream and everywhere it goes, it changes the world utterly. Let me show you two items of evidence from use of SMS by senior managers, from Europe.
POTENT MANAGEMENT TOOL
Consider your most valuable resource, personally. What is the only resource that is finite and you cannot create more of. It is your time. No matter what kind of new contract you get from your Board, or what kind of bonus, or whoever you hire to your team, you cannot create more time for yourself. Your peers, business and banking executives in Britain were interviewed about their technology needs by the Mobile Data Association. This is traditionalist, formal, conservative and even stodgy UK business leaders. When asked what was their most valuable tool to manage their time, you know what they said? Not their scheduler or their secretary, they said it was SMS text messaging! If SMS is seen as the most powerful way to manage time, by British executives, obviously they have been using SMS for business communications for many years already to come to that conclusion.
Most valuable tool to manage your own time? I doubt I could explain it more plainly... but let me try anyway. You remember British Prime Minster Tony Blair. He found SMS so powerful, he ordered his Cabinet Ministers all to use SMS during meetings (with phones on silent obviously) for any across-the-table discussions and to pull in info from underlings waiting outside the Cabinet office. Wow. That is a commanding endorsement of SMS. SMS must be effective if (arguably) the second most powerful person on the planet ordered his own meetings to use this technology even while he was talking in his own meetings.. When did Tony Blair do this? That was back in 2004 already. Was he that clever to invent this idea? No, the first Prime Minister to authorize SMS use during meetings was the PM of Slovenia four years earlier!
Talking of Chief Executive Officers, now you understand why Barack Obama is so addicted to his Blackberry. Its not just Blackberry email, President Obama understands the power of SMS, from his supporters in the USA (announcing Joe Biden's choice as VP for example) to international audiences - delivering translated highlights of his speeches abroad via SMS. Yes, now even the most powerful person on the planet uses SMS. If the US President can use SMS, you can safely allow your staff to start to use it too, isn't it so?
There is even more. SMS is truly far more fiendish than 'just communication' between two people. SMS is now dismantling the very way business operates. Not communicates. Operates. Allow me a short tour so you grasp the scope of what you are dealing with.
IS MORE THAN
SMS is the most disruptive technology on the planet right now. Your US airline will send you an alert if your flight is delayed, via SMS. Your kids vote on American Idol via SMS. Finnish Dentists offer last-minute cancelled appointment slots vial SMS. Businesses in Spain accept SMS based signatures as legally binding for contracts. Norway became the first country to accept tax returns by SMS. The Pope sends daily blessing via SMS. Emergency systems from Indonesia to Guatemala save lives with SMS alerts about floods and earthquakes. SMS helps illiterate people learn to read in Pakistan. SMS has toppled governments like it did in the Philippines and it has spread the truth when governments try to censor the media from Myanmar to Zimbabwe. Even money is migrating to SMS, in Kenya 25% of the total GDP is now handled through 'SMS money' and coins are being decommissioned in some industries like parking in Estonia and bus fares in Sweden - replaced by SMS money.
SMS is far more than that even, but this is enough to make my point. SMS is the most disruptive thing going, at least as disruptive to all businesses, as the internet was two decades ago, as the PC was in the 1980s, the telephone a century ago and electricity in the late 1800s. And of your true rivals, the other 499 CEOs of US based Fortune 500 companies, when they hear the words 'mobile phone' they will not even think about SMS as a key part of that equation.
Why is this relevant to you, the CEO, we get to our fourth point. Let me use a quick analogy to explain the enormous scope of this opportunity for you now: airplanes and trains. An airplane is not just a replacement of trains in overland travel, airplanes are 'more' than trains in that airplanes can also cross oceans, something that trains cannot do. An airplane is both a replacement for trains and it is far more than trains. If you were a railroad baron a century ago, and you understood that in the long run, airplanes will take over the passenger business, you'd make two 'obvious' strategic moves - you'd build railroad connections to the airports and you'd shift your own company emphasis in rail to freight - ie stop expanding your investment in passenger cars, and buy more freight cars instead. These two moves would give you a dramatic competitive advantage over all your rivals. And you'd explore a third possibility. You'd commission a strategic internal study of the viability of your railroad company becoming also an airline operator. That is what I am trying to tell you.
Mobile replaces landline phones yes, but with SMS, mobile can do something radically more than voice calls. Something landline phones cannot do. (And something PCs cannot do, and the internet cannot do.) Very few in American wireless industry understand SMS fully, because it was invented in Europe and the American industy was late to the party. More than anything else, it is SMS that will now shake your industry to the core. Every single business process and every employee will be impacted before the decade is done.
4 - Competitive Advantage
This has all the elements of a true 'competitive advantage'. The world has changed. The facts have changed. What was once true, is no longer true. But most of your peers still believe the old way. Think trains and airplanes. We are at a similar point in time, when actual passenger preference had already shifted, but most train operators did not know that. You do grasp this, as CEO, instinctively and immediately. A true competitive advantage! If such a change has happened very recently, it means most of your rivals are living with the 'old truth' - the obsolete one. A truth that has turned into a misconception! A truth that will in fact guide the competition astray! You have seen the new improved truth and can generate significant competitive advantages out of this.
THREE LITTLE EXAMPLES
I told you mobile can do more than your fixed landline phones system, or your computer system or the internet. Lets have some evidence. Let me show three innovative business uses of mobile phone messaging, from three different industries, for three different business processes, in three different countries. I will keep these short, as these have been reported in the public domain already.
BMW in Germany used mobile phone messaging to sell accessories to existing BMW car owners (winter tyres). The total cost of the campaign was 120,000 US dollars, and yielded verified new sales accurately attributed to those messages of 45 million dollars. The campaign achieved a 30% 'conversion rate' (better than 'response rate' or 'click-through rate'). In other words, for every 100 Germans who received this message on their phone, 30 showed up at a registered BMW dealership to buy the winter tyres. That is an astonishing success rate if compared to the internet where 1% click-through rates are considered phenomenally successful. And this campaign is nowhere near the most successful use of mobile in marketing communications.
My only point here is, that if we do use mobile in advertising and marketing communications, if done properly using what we call 'engagement marketing' methods, mobile ad campaigns are expecting average response rates from 25% to 45%. That not only solves the famous Wanamaker's Dilemma ("I know that half of my advertising is wasted, only I don't know which half.") - mobile messaging based ad campaigns (but only when using 'engagement marketing' methods) will achieve satisfied customers too! When using 'engagement marketing' methods, for the first time ever, customers will ask for more ads, they love mobile ads so much. I am not kidding you, the evidence is in from thousands of engagement marketing campaigns run by the giant brands of mega advertising budgets like Coca Cola, Mastercard, Procter & Gamble, etc.
Advertising was the obvious use. Lets move to another less glamorous form of marketing communications with consumers, the bill. In services that send consumer bills, like the utilities, credit cards, banks, cable TV, insurance, telecoms providers etc, the paper printed billing process is expensive and wasteful. In many cases these providers offer the choice of 'internet billing' where no paper bills are sent to the home, and the consumer can see the billing information on the web. That is good but sub-optimal. We know now that more people access the internet on a mobile phone than on the PC based web - and 3 times more people use SMS than use the internet on any kind of device.
Some people want to see the full detail of the bill. Others just want the reminder of how much to pay, and know what exact amount to pay this month. With that level of detail, SMS text messaging is the ideal billing platform. It reaches 4.2 Billion active users and a potential target audience of 5.2 Billion. That is what the cable TV and telecoms providers here in my home town of Hong Kong do for example. They give the consumer the choice to get SMS billing reminders on SMS. This is all I need to make my monthly payment.
Now think about your consumers. We heard that the majority of Americans already prefer using SMS to making voice calls and prefer SMS to email. If your business sends consumer bills, imagine how delighted some of the customers will be, if you offer them the choice of SMS billing. For the young adults whose biggest concern is saving the planet, all those trees we cut to create the paper for the bills. I am saving you money in your billing and helping you delight your customers. And you know what. I don't have 'concrete' evidence on this yet (the phenomenon has not been studied enough) but from anecdotal evidence with several of my customers, they report, that when customers are given the chance of SMS billing - those customers also pay more promptly than using other means. You don't need to be a CFO to understand what is the value of shrinking the time of collecting billables.
For my third example, lets go to inventory management and Finnair the Finnish airline. You may have noticed that many US airlines now offer cellphone based check-in. That was invented by Finnair ten years ago. Today more than half of Finnair's passengers use mobile check-in. The service is complete from selling tickets on the phone to mobile check-in to boarding passes to your frequent flier benefits etc. All on the phone. That is not the clever bit, thats been done by dozens of airlines too. Here is the diabolical bit. Finnair now uses the mobile phones of their frequent fliers, to sell all vacant seats in business class, using SMS.
You can understand the inventory management problem of empty seats. At some point a given flight ticket sales has to close, and at some point the check-in has to close, because the passengers have to be processed at the airport through security and onto the gate. Typically this means that about 30 minutes before a flight is scheduled to take off, they stop processing check-in and perhaps 45 minutes before take-off they stop selling seats.
So at 30 minutes before scheduled take-off, Finnair knows exactly how many 'souls' are onboard a given flight, and they also know how many empty seats they have in Business Class on that given flight. Now because more than half of all passengers used Finnair's check-in, they have active real-time access to all those customers through their mobile phones, no matter where they are in the airport, at security check or doing duty-free shopping or in the business lounge etc. Now Finnair sends a series of targeted offers to its frequent fliers, in order of their status (Platinum first, then Gold, then Silver etc). The passengers can pay with a credit card or use their miles from their FF balance.
Finnair have calculated what is the discount level they need to offer a one-time Business Class upgrade, to these frequent fliers, to achieve complete upgrade sales to Business Class - yes, to sell out Business Class on every flight! With just a little bit of trial-and-error, Finnair will soon learn for every leg of every connection it flies, what is the exact price point they need to offer, to sell an upgrade. Finnair is able to sell out Business Class on every single flight - increasing its bottom line considerably - while making its frequent fliers even more satisfied, because they will appreciate it that occasionally on some flights, Finnair will send them an unanticipated discounted upgrade offer to Business Class. Obviously Finnair communicates this too, very clearly, that it is available on this given flight only because there are still empty seats in Business Class.
This is the future of all air travel. But understand, this cannot be done with landline phones, with email. with Facebook, with an iPad, with anything other than SMS. Only SMS will allow automated offers like this, at the last minute, sent on a first-come/first-served basis. And it can easily be done within that 30 minute window of airline operations while the passengers are processed in the airport. Generates better profits and more satisfied customers.
INCREASE SALES, REDUCE COSTS, IMPROVE PROFITS, WHILE INCREASE CUSTOMER SATISFACTION
I have shown you three industries, cars, cable TV and air travel. I have shown three functions within those industries, advertising/sales, billing and inventory management. I have shown these from three different countries, Germany, Hong Kong and Finland. All of this was achieved using mobile phone messaging, not smartphone apps or any other more 'exotic' mobile technologies. But most importantly, while each of these three solutions save you money and/or generate more sales and thus each of the three improve your profitability - using SMS on mobile phones will also increase your customer satisfaction!
There is no other technology that can prove with actual existing case examples today, that they can improve sales, decrease costs, increase your profits - while increasing customer satisfaction - today, across anything nearing your total customer base or relating to all of your employees.
YOUR RIVALS ARE LOST
So now the best news in this blog. We just saw a survey of the Fortune 50 companies and their use of mobile in December 2010. How many have a mobile strategy to begin with? Only 62% have any kind of mobile strategy - 38% of your biggest rivals have no mobile plans yet in place of any kind! This alone is good news. But then remember, I told you that the majority of internet access is already from mobile phones globally? How many of the Fortune 50 have mobilized their website (all have a website obviously). Try 38%. That means 62% of the biggest US corporations have no mobile-ready websites! Wow. And best of all, I told you the world's most widely used data application is SMS. And that even in the USA, more people use SMS than email even - how many Fortune 50 companies use SMS today? Only 22%. Reading this blog, you are ahead of 78% of your rivals!
So you made it through this blog. Good job. Now, you the CEO reading this, you have only one immediate step, and possibly two follow up steps. That is all you need. For now, you need to commission internally a study of mobile. You see from this blog, that if all three of your tech pilars are shifting to mobile, and apparently, the biggest factor of mobile is SMS, that means currently no matter what your management team thinks of mobile, their thinking is not up to speed. You need your internal strategy guru to do a quick one-week study and survey of mobile, and bring a short paper of it to your next meeting of your management team. What is the impact of mobile and SMS to your business, in the USA and abroad, internally with employees and externally with customers, suppliers, partners, investors, the press etc. You do not need more than this for now.
If your internal strategy guy says you have to boost your involvement in mobile, then you need to do two more things - then and only then (its possible your industry is somewhat immune from mobile and SMS, like perhaps the mining industry, mobile phone signals do not penetrate deep into mineshafts haha) - you set up an urgent 'mobile strategy project' headed by a young hungry MBA perhaps reporting to your senior strategy guy. And then, if your trusted internal strategy guy says mobile is vitally important to your corporation, then and only then, you come back to re-read this article, and you proceed to read the second half of this blog to read some of my thoughts for US corporations about some of 'the how'. Honestly, the second half is as long as what you already read, you do not want to read it now, not until your internal study is completed by your strategy guy.
Thats it, thank you for reading the blog and if you find mobile of interest to your future, please do come back from time to time and see what I write about it here. Now, for the strategy guy, please follow reading the second half of this article. For the CEO, and CFO and CMO etc, I am happy you took in the brief overview into mobile, and I say good-bye.
WHAT NEXT - THIS FOR THE IMPLEMENTING PERSON
So you are the appointed mobile guy either for the first mobile analysis or perhaps the guy appointed to build the actual mobile strategy. Welcome! (I trust you, the CEO, are not here anymore, come on, this is not for you, we are going to details here, this is not worthy of your time, seriously..).. Yes, welcome to the Communities Dominate blog. You and I will become good friends here in the coming years. I trust you'll soon also follow me on Twitter - I am @tomiahonen and at some point we'll exchange emails and you'll leave comments here with my regular readership. I've been on this blog for six years and we have passed our first million page views, so my regular readership is quite loyal and you'll see, also quite opinionated nad vocal. Mobile is an exciting place and you found a really cool opportunity for your career.
So lets dig deeper. You read the helicopter view in the above. That was about 5,400 words and should have taken you about 25 minutes. Lets do some major issues, facts, misconceptions here for you, to help you get up to speed. This is another 4,000 words and another 20 minutes more. But there is a cool freebie gift for you in it, so do read all the way through.
First, please accept some items in this blog as facts and please do not waste your time in attempting to argue with 'me'. So, it may seem counter-intuitive to think that everyone with a fixed landline would abandon it and go mobile (our grandparents, really?) or that a smartphone is 'a real computer' or that the internet is migrating to the small screen. These are not my arguments (anymore). For these points the major US based analysts, experts and industry associations and CEOs all say the same thing. Please don't waste your time trying to argue against these facts anymore, ok? Please accept them as facts, no matter how much they might seem counter-intuitive. If the FCC says US consumers are abandoing landlines in favor of cellphones - that is then pretty well past the point of argument, isn't it. Same if Dell and HP say a smartphone is a computer, or if IBM says half of internet is already from mobile.
Even more importantly, your career depends on internalizing the second big point I made in the above, that SMS is different - better - than voice calls. I am not saying SMS will kill voice calls, I am reporting that now even the US industry like the CTIA say that US consumers prefer SMS to voice calls. Same goes for SMS ahead of email. The more quickly you can get your head around the fact, that SMS is astonishingly powerful, fast, discrete and capable communication platform - far far more so than voice calls or email or Facebook or anything else existing today - the more rapidly you can start to build your company's success in mobile.
I am not saying that 'iPhone apps' or any Android apps or Blackberry solutions cannot be great - sure they can. But they pale in reach and ability to change your world, when compared to SMS, in 2011 and 2012. I'll talk about the iPhone apps a bit later.
So lets dig a bit deeper. I argued that SMS is the core and the opening move of any mobile strategy. There are two overwhelming reasons why your internal communication needs to be upgraded to 'SMS time'. Imagine what kind of dramatic improvement there was in internal corporate communications, when your corporation first accepted that email was allowed and approved in internal communications - and you jumped in efficiency over the previous electronic communications - fax. And similarly how much fater fax was, than the internal mail system. Now we are facing a similar giant leap.
The evidence is overwhelming, that email users are migrating their messaging traffic away from email to SMS text messaging. Not just consumers, also business users. Because SMS is the fastest form of written communciation ever. It has been benchmarked against email in numerous studies. How much faster is SMS than email. Not twice or three times or five or ten times faster. Not 100 times faster. The New Zealand Herald reported last year that an average email is read within 48 hours, but an average SMS message is read within 4 minutes. That speed advantage is literally 720 times faster. To put it in human terms. If you are 720x faster than me, you can take the corporate jet from New York City to Detroit. I can't take a small propeller plane. I can't take the train. Nor a car. Not even a bicycle. For you to be 720x faster, you take the jet and I would have to walk from the Big Apple to Motown. This is the speed difference we are looking at when comparing generic email to SMS.
A caveat here - that is not using a Blackberry, that is using a normal PC based internet email connection at both ends. But also, remember, while you probably have a corporate Blackberry for yourself, most of the employees of your corporation do not have Blackberries, and frustratingly no doubt, neither do all of your contacts outside of the company, and certainly not all friends and colleagues.
If both users at both ends have Blackberries, then wireless email can be arguably about as fast as SMS, but even in the USA, only 10% of Americans have a Blackberry (in the rest of the world, about 2%). For most of your communciations with email, even if you have a Blackberry, the other person is using email on a PC somewhere.
And what of those Blackberry users? They should all learn to use SMS on the Blackberry, for communications with all those contacts who do not have Blackberries or wireless email devices upon their persons. Because of its QWERTY keyboard, the Blackberry is the world's best SMS-texting phone as well.
And when compared to any other forms of communciation, including voice calls from one cellphone to another - SMS is the world champion in speed. Again, while that sounds counter-intuitive - remember, that most voice calls today land in voicemail hell. There the messages then linger often hours or days. But an SMS is delivered instantly, read within 4 minutes on average and during working hours between work colleagues, almost instantenously.
Well, if speed is not enough to convince management to shift to an SMS based management culture, the second benefit of SMS should nail it for internal communciations. SMS is the most discrete form of communication ever invented. A voice call is incredibly 'leaky' you may have people 'eavesdropping' in the cubicle next to yours, or the restaurant table next to yours, or the toilet stall next to yours, or in the bus or train or wherever you are. SMS text messages are on the tiny screen, nearly impossible to spy on, even if you sit next to the person in the same taxicab. You cannot call your boss if sharing a taxicab with a competitor, but you can safely send an SMS and your competitor is none the wiser. This discretion (secrecy) is the reason why kids love SMS in school - all kids have tried to cheat in school exams using SMS. While that practise is deplorable, how often do we face the situation where we would love to have 'emergency help' from a colleague. That can be delivered most descretely, using SMS. Remember the Tony Blair use of SMS during Cabinet meetings of the utmost life-and-death matters like the wars in Iraq and Afghanistan. But if US corporations have a need for speed in communications, to keep up with the Asians and Europeans, they also have a need for discrtion in communications! What business doesn't?
I will have more for you about SMS don't worry, tons of stats and facts for you coming later. Lets move to the next obvious point.
MMS IS YOUR SECOND STEP
While SMS is an astonishing story for most American Fortune 500 corporations - and it is truly alarming but telling, that only 22% of Fortune 50 biggest corporations have deployed SMS based solutions so far - your real 'secret weapon' is something that could at best be called 'super SMS'. Its everything SMS has but more. If you think 160 characters is too short, MMS allows more text. If you think you like SMS but would need to show a picture - MMS allows sending pictures. If you would like to show a video clip or sound - MMS allows those too. And MMS is already bigger than the internet or television or email globally - has 2.1 Billion active users. MMS is clumsy yes, it does not work perfectly everywhere yet, that is true.
But it works on more than 80% of the phones used in the world. So most of the employees you have, actually do have a cameraphone in their pocket (not quite all) and most of those cameraphones are able to send and receive MMS picture messages. This means, that you can for example, deploy things as simple and obvious as expense reports, deployed on MMS, so your staff take pictures of the receipts, submit those with their mobile phone based simple expense forms, and can do expenses from their pockets. No scanners needed, no faxes, no internal envelopes processing paper.
Same for the competitor analysis, you deploy your competitor alerts and research to use MMS and you incentivise the staff to look out for info about the competitors, anything from their advertising at some billboards, to if you find competitor equipment at your customer site, and take pictures of them and their model numbers and technical configurations, how they are cabeled etc. And submit these via MMS to the competitor analysis department.
Internal training can offer simple short video clips on how to do some basic processes, delivered via MMS to your staff. And then on the marketing communications side, MMS is the super-SMS, the optimal vehicle to deliver anything from coupons to offers to digital samples etc. Reaching a theoretical reach of 4.3 Billion mobile phone users globally, and an active user base of 2.1 Billion already today. Don't let anyone tell you that MMS is a failure, it is the fastest-growing new service ever, it reached 2 Billion users and over 30 Billion dollars in annual revenues in only 9 years - by far a world record - this is even faster than SMS text messaging in its first 9 years.
Long before you will even consider any iPhone apps, you will help your organization get onboard with MMS multimedia messages, both in internal communications and external communications. Don't let anyone tell you MMS is failing in any market anywhere. That BMW example I told you about in the above, from Germany - it was done on MMS, not SMS. Remember when I mentioned about 'engagement marketing' with 25% to 45% response rates on average? The optimal marketing communication platform for engagement marketing is MMS. Over there in the USA, the hit youth TV show, Pretty Little Liars used an MMS campaign to connect with viewers, they had 12% of their core audience using MMS in just one season. Here in Asia MMS is used for example to deliver newspaper 'headline of tomorrow' premium news services, by the newspapers themselves. 40% of their readership have signed up to these premium news services twice daily.
THEN COMES THE MOBILE WEB
And after your strategy has explored its SMS and MMS parts, the third leg, still perfectly valid for this year 2011, globally, is the mobile web. You need to mobilize your corporate website, make sure the website is easy to use with cellphones - not the iPhone and unlimited data plans, but any featurephone - and not touch screen phones - the far more common phones with T9 type of keypads and screen sizes in the 2.5 inch size. That is what most mobile web use today is, even though the iPhone generates the most traffic. The most users come from feature phones and non-touch screen phones.
For the mobile web you need both the basic WAP style of mobile websites, and the real HTML websites, which would be optimized for 'dot mobi' style of optimization. Then you need to further offer the premium smartphone users the 'mobile touch web' experience, ie iPhone users, Android users etc. But remind your marketing communciations, that a mobile website costs about one tenth that of the development costs of one iPhone app ($3,000 dollars mobile web vs $30,000 for iPhone app); and the mobile web reaches an active user base in the USA of more than 7x more than all cumulative shipments of iPhones - and globally 30x more. It is truly a 'no-brainer'. That whatever clever interactive multimedia catalogs, surveys, ordering sites, brochures etc you could deploy on an iPhone app, you first deploy the mobile web version - adapting from your website obviously - long before they get to go splurge on the iPhone app development. This will not make you popular with the VP of Marketing, but remember, you report to the CEO. Your job is not for your ad agencey to get to win some iPhone app contest, your job is to help your company deploy mobile to gain sales, reduce costs, improve profits and make satisfied customers. That you cannot do if you display the iSyndrome, you can only do that successfully, if you use mobile's reach and power - like Kraft in its strategy 'No Mobile Left Behind'.
The Finnair example that I listed, you know how it progressed? They first launched an SMS version. Then a WAP version. Then an MMS version. Then a QR code version. Then an HTML version. Then a Java version. Today they also have an iSMS version, and smartphone versions for Symbian, iPhone, Android etc. That is exactly what Kraft means with 'No phone left behind'. It is exactly what for example Deusche Bahn the German Railroads did. Or what the BBC did in Britain, etc. You start from the basics, cover everybody, and then over time, you deploy more premium solutions for premium phones used by premium customers.
ABOUT APPS (iPHONE APP STORE)
More than half of Fortune 50 companies have already deployed an iPhone app. So its quite likely that you will find, that your marketing department already has done that. Don't worry, it was done before you stepped in. You need not quote me that it was a stupid thing to do, your VP of Marketing is not the culprit here, it is the incompetents there at the digital agencies and ad agencies who bamboozled your VP into approving the mobile app development. Clearly that is in violation with all I wrote here, about 'No Phone Left Behind' but don't worry - you just ignore that, and you now tell the Management Team and your CEO (and CMO) that since they have already launched an initiative into mobile, it is time to super-charge it by going mass-market, with SMS, MMS and the mobile web. And the good news being, that this is far cheaper now, than the original app development, and you achieve a far greater reach now.
If your company has not yet launched an iPhone app (or any other app on Android, Symbian, Windows Mobile/Phone 7 etc) then if you need the big arguments about prices, profits, reach etc, I will have all that for you as well, don't worry.
It is very likely that your company is currently using the Blackberry (TNS survey in 2010 said 81% of large US corporations had the Blackberry as one of their approved smartphone platforms). This is very good for your company, and in many ways the senior execs at HQ are now 'ahead of the curve' but it does provide a false sense of security. It is very easy to fall into the logic trap, that because a current Blackberry user can send super-fast Blackberry based wireless email communications to other Blackberry users, that the corporation is at the required speed. It cannot be, unless every employee has a Blackberry too. What the company now needs, is for all Blackberry users to be told how to use SMS with all other people who don't have Blackberries, both within the company and beyond. To learn that they can achieve the Blackberry ie 'Crackberry' speed gains and efficiency, with all cellphone users, by using SMS with all others. That is theoretically the best of all worlds.
And a quick tip. What is the most important communication node within the organization? It is the group of department secretaries. These are THE most important group to be all given Blackberries immediately. Usually most corporations are not thinking about this need, they may not give company 'employee phones' at all to this class of employee but it is a communication utility thing. How many vital communication situations are lost when the secretary takes her lunch break, or happens to be running an errand for one of the bosses, sits away from the desk at some internal administrative meeting, etc. All those are 'solved' with a Blackberry! The biggest single boost to corporate communication efficiency is to get the Department Secretaries (those who support many people, as opposed to executive secretaries/personal assistants) to carry Blackberries, with unlimited (domestic) calls, unlimited emails, unlimited SMS text messages. If the CEO or CFO is not willing to do this across the board, sell the idea by finding a business unit which the HR department says has communication problems, and run the trial there. Give the department secretaries the ability to communicate continuously and efficiently, and watch the department total efficiency go up.
A few important distinctions here - any other major smartphone platform, where the smartphones use QWERTY keyboards, are theoretically as fast as a Blackberry - most obviously the E-Series of Nokia. But none of the pure touch-screen phones like an iPhone can be as fast - because for most users, they cannot send wireless email or SMS text messages blindly on pure touch-screen phones (single handedly and without looking at the phone), as on a real QWERTY phones. While yes, the marketing department no doubt wants to keep their iPhones, most other departments are best to use real QWERTY phones. Apart from all issues that the IT department has about security (the Blackberry is the planet's most secure smartphone platform) the vital question to your top management should be communication speed, not the number of toys that a flashy sexy show-off smartphone may have.
A few other thoughts on the internal stuff. The company needs to make sure its email system has multicast-SMS broadcast capabilities (so that a department secretary can send from the desktop PC, an email, that ends up received as SMS with all of the department) etc. And the company should explore the ability to entice all employees to be willing to use their personal cellphones for SMS use. The best incentive usually, is to offer to pay for the unlimited SMS use package for the employees, if they agree to give the private cellphone number for company use in internal communications. While this means, obviously, that the employees will get their 'personal' SMS messaging now 'subsidised' by the company, the benefit to the corporation is completely disproportionate, as most will then be willing to answer SMS messages 'during all office hours' even when they are on private time at a lunch break, or driving on an emergency to pick up the sick child from school, etc. All employees who don't have a company phone, will seem to react and behave almost as if they all had Blackberries. This is potentially a very powerful upgrade of all communications, but again, it depends on the industry. Perhaps Wal-Mart does not need this..
And for a really easy 'quick win' - go to the competitor analysis unit, ask them to launch an internal - and by sign-up only - daily SMS alert with the 3 biggest news about competitors, sent say around noon every day. Then go to the corporate sales, key account managers, and show them this - watch them all take it and utterly fall in love with a simple, cheap, SMS based daily news alert, about headlines of what the competitors are doing. Your competitor analysis department will love the good will and reputation, and in most corporations, the top sales people are also the most influential middle-managers having the ear of the CEO. If the sales staff fall in love with one new SMS based service, you are thanked as a genius...
NOW FOR THE FREEBIE GOODIE
Ok, you have spent more than half an hour on this blog and learned a lot, but also probably are somewhat 'confused' because so much of what I write here, goes counter to everything you have read elsewhere. That is ok. You will have to check on my credentials anyway - so you'll see soon enough that I have written 11 books on mobile (more than anyone else) and that my books are referenced in over 100 books by other authors of this industry. None of your US 'pundits' and 'experts' who peddle various myths that go counter to my writing, have that type of credentials. And my reference customer list is not just the big giants of this industry here in Asia like China Mobile and NTT DoCoMo of Japan etc, and the big mobile giants of Europe like Vodafone, Nokia and Ericsson - look at my US reference customer list: HP, IBM, Intel, Motorola and RIM. I am not some goofball..
But I know fully well, that I will not convince you totally today, I don't need to, I just want you to start to examine the world with truly open eyes. The facts are so utterly overwhelming, that you cannot come to any other conclusion, if you do an honest job of research. A year ago at this time, when I was arguing that the app store economics were dangerously over-hyped, I was quite alone, with few to support that view. During 2010, most major reports and analyses of the app store space have come to similar findings. The same has been true previously already with SMS, MMS, mobile internet etc. Now that I have pointed out what to look for, you cannot miss the facts when they come to you.
So with that, please keep this one thought in mind. SMS was invented in Finland (incidentially, by my mentor, Matti Makkonen, who won the Economist IT innovation award for it). So if there are European (or Asian) experts who offer you a 'differing view' about SMS, compared to the US view, please give the appropriate weight to those who have witnessed this for far longer. So while SMS use is growing strongly in the USA and has passed 72% user level in 2010, Finland had passed 91% back in 2005. The same is true of MMS, of Americans, little over half now, 54% send MMS in 2010 said Pew. But with MMS the Norwegians were the first to it in Europe and by 2009, 84% of Norwegians were using MMS. Same of mobile internet and Japan, etc etc etc.
I could point you to several blog stories here to help you find more of the basic info, but I have a better totally free resource for you. My 10th book, The Insider's Guide to Mobile, was released last month and yes, it is totally free. A 350 page ebook, with tons of stats and facts and case studies and information, up-to-the-minute of mobile today. It includes detailed analysis of the BMW Winter Tyres campaign, the Finnair check-in, etc etc etc. It has a whole chapter on mobile advertising and marketing, where I explain very clearly what is the difference between interactive advertising, viral marketing, and engagement marketing etc. The eBook includes an in-depth study and analysis of the app store market myth and contrasts apps vs web, etc. You will find that ebook invaluable to get up to speed now. And as it is a free, totally unrestricted pdf file - you can share it with all your colleagues too.
At this site I cannot help you more. The Fortune 500 corporations cover just about all major industries on the planet and some are deeply impacted by mobile alread (like the PC industry, the internet industry, various media publishing industries etc) while others probably are not very much affected like, say mining. The impact of mobile will be very different for airlines or retail or manufacturing or farming or petrochemicals or finance or pharmaceuticals etc etc etc. I do find mobile deployed in the most astonishing industries, like fishing, forestry and even funeral services.. But you will see more in the free eBook, go download Tomi Ahonen The Insider's Guide to Mobile now.
Then some who arrive at this blog, have an active current need to write a mobile strategy now, ie they are past the basic research stage, and have to get deeply involved. For those, I know the single biggest need right now is the facts and data. This blog will have helped, as did the free eBook, but they now need more of the real numbers, the real users, the real installed bases, the capabilities of phones, the adoption rates of various services, etc. For them I have also some help. That is not free, but at 9.99 Euros, this is the best value for data about the industry - my TomiAhonen Almanac 2011. It contains over 180 pages, and over 80 tables and charts and graphs of all the most hard-to-find global data about this industry, and all up-to-date. The new Almanac will be released in early February, and the good thing is, that now in January, anyone who orders the current 2010 edition, gets the 2011 edition automatically for no extra charge next month. Is that a good value or what? So for those who need it, the ordering page for the Almanac is TomiAhonen Almanac 2010 (and receive 2011 for free).