The term ‘beacons’ or ‘iBeacons’ as the Apple variant of the proximity-detecting devices have been called are all the rage with marketers looking to personalize experiences for their customers. Beacons have become a hot topic lately because with the release of iOS 7.1 Apple has fully embraced software support for the technology embedded in over 250 million Apple devices in use around the world. But Apple is not the first on the beacon bandwagon as companies like Digicash and Paypal have a beacon strategy too. Beacons have been hailed as ‘over-hyped’ in some press clippings and ‘under-hyped’ in others. But what’s the real story – can beacons be the magic bullet for marketers looking to target individuals on their mobile devices? The answer is yes, potentially, but not without some help.
Let’s start with what beacons are and what they are not. A ‘beacon’ is nothing more than a simple device that detects distance between itself and a transceiver chip through a low powered version of the Bluetooth 4.0 standard called BLE (Bluetooth Low Energy). It can detect that distance over a much larger range than other near-field protocols like NFC (Near-Field Communication) and it provides us with a much more precise ability to detect proximity than the traditional methods of Wi-Fi, mobile GPS and cell tower triangulation does. If you use any mobile device tracking solutions like ‘Find My iPhone’ you’ll know that you can find your iPhone… down to about 100 yards give or take signal strength, etc. With a beacon your mobile device could be detected from 10 feet to less than 1 foot in distance.
Sounds great, right? So what’s the catch you say? Well, the ‘catch’ is that a beacon is blind and dumb – it cannot do anything except detect and report distance – it cannot analyze this information and certainly cannot execute upon it – heck by itself the beacon does not even know where it is located physically. That’s where the ‘help’ we mentioned earlier comes in. It takes analytics software like IBM’s Presence Zones to be able to ingest location data from sources like beacons, Wi-Fi, GPS, etc. and turn that into information that can be used by marketers to interact with their customers whose recent travel patterns or current location warrant a personalized offer or dialogue. Marketers can then use their campaign solutions for traditional channels or mobile channels such as Xtify’s Mobile Push technology to enhance the customer’s experience at their location.
So how will all this work in the real world? Well, assume you are at the World Cup championship game and the stadium is jammed. You are waiting in the line for the restroom for a long time – and you are being detected by beacons – and the stadium’s customer support system sends you a mobile notification that the restroom 4 sections down from you has zero wait. Or you are waiting for a bus in Amsterdam and listening to a new DJ you heard at your favorite club last weekend which you are streaming from Spotify. The beacon in the video advertising poster next to you detects you and coordinates with Spotify to change the advertisement to inform you that your favorite DJ will actually be at another club live this weekend – and gives you a digital 2D barcode to capture with your phone giving you details and a discount on the cover charge. Or when you enter your favorite department store, where you have a loyalty membership and their smartphone app, you are detected by their proximity beacons which interact with your mobile app giving you the latest discounts and new products in the areas that you have shared are your favorite directing you to exactly where in the store your interests lie.
So we are back to the start – yes beacons can revolutionize the way marketers interact with their customers – but not without some help. The beacons are just the start – the real value is the analytics and execution of the information gathered from the beacons. For those organizations that build a true strategy for detection, through analysis and execution, the future looks bright.
IBM CEO Ginni Rometty spoke last week at Mobile World Congress in Barcelona, Spain. She talked about three key components of technology that will drive growth in the coming years for communications providers and organizations across industries. The first two were Data (Big Data!), which she described as the ”new natural resource,” and Cloud, driving the ”API economy,” or a vision of hybrid clouds in which any task can be modeled and executed quickly and efficiently to meet any requirement. But the third I think was the big one – somewhat propped up and driven by the first two even: Engagement.
Engagement, in this context, is defined as ”contact by fitting together” or “the act of sharing in the activities of a group.” When considering what Engagement means, perhaps all kinds of things come to mind, but at the core I believe it is about connecting people – connecting people through new ideas, new opportunities, new ways to educate, new ways to communicate and new ways to innovate.
Ginni said Engagement hangs in the balance of speed, security and personalization (she likes things that come in threes). Speed comes from the cloud and that API economy, security comes as well from our devices; the tools we use to connect. Personalization is the realization of our insight and knowledge of one another and the unique offers and experiences we expose as a result. It is at the core of Engagement.
When it comes to commerce in this new paradigm-shifted cosmos of personalized big data clouds, we have to understand that our customers are ahead of us. They are already comfortable with this new shift, demanding that we, as service providers and retailers, meet them where they live, work and play. Consumers are not just tearing down the traditional walls of the business model for an industry – they are redesigning and rearchitecting it to their wants, needs and desires. Staggering growth in mobile device capability, social media and person-to-person communications, data speeds and accessibility, crypto-currencies and, of course, the Cloud and Data explosions have created an environment that requires organizations to continue to invest in solutions to support these empowered customers with open, flexible commerce solutions.
What if everyone wanted more of your products than you could provide? What if they wanted it faster and in greater quantities and more often than ever? Sounds great doesn’t it? But what if they wanted to pay less than ever for larger quantities? What if they didn’t see value in paying for that product or service, just in the free tools and capabilities it enabled provided by other companies? What if you had to spend large amounts of capital to keep providing larger quantities of your product without seeing a proportional increase in revenue for those products?
This is exactly the world that telecommunications providers are living in today – their services (the network essentially) are in more demand than ever before and that demand shows no sign of slowing in the next 10-20 years as the world continues to ingest more data at higher rates than ever before in areas that have never before had connectivity. There have been many concerns expressed even this week at Mobile World Congress that the CSP could look like UPS, FedEx and DHL soon – providing nothing but the transport layer for the goods that flow through – in a situation where the customer expects the service to work perfectly and only when it doesn’t does the service provider cross the mind of the consumer.
In fact in quite a bold move on Monday this week Mark Zuckerberg, CEO and founder of Facebook stood up and told a room full of telecom providers they should be offering free data services, right after his company announced it had purchased What’s App and would be adding voice services for its 450 million users – which will further put pressure on telecoms in the EMEA region.
Is this necessarily a bad thing? Perhaps not, and there will most definitely be carriers who decide this is an acceptable role in their relationship with the consumer. As network virtualization and IP-based telecommunications services dominate they will bring with them the ability to drastically reduce cost and make this potentially a viable business model. But for many, if not most others, they are not content to cut cost and hope to find a niche to survive in and while some telecom providers like SingTel CEO Chua Sock Koong reject the idea of becoming a ‘dumb pipe’, they recognize the revenue declines in pure network services and are branching out to provide ‘digital life’ and extra value services for customers.
So if providers are going to grow in this new world order how do they do it? Monetize the network. I wrote a blog a year ago this week telling providers they were sitting on a gold mine – they just needed to figure out a way to mine it. Today providers are doing this in a number of ways today – providing subscriber data, enabling machine-to-machine connectivity and AT&T has announced that they will be seeking ‘sponsorship’ data for their network – where companies or events (NFL or FIFA perhaps) might sponsor all data of a particular event or contest over the AT&T network – providing some relief for the end customer.
Some real innovators like Safaricom in Kenya who is enabling their customers over their network to pay rent, make person to person payments and even register new births using an open platform that anyone can subscribe to services from allowing immediate access to their 30 million customers. This partnership with OTT providers puts Safaricom much closer to the value perceived by the customer of the services they receive.
So if providers are going to be offering all these new products and services how are they going to package them up and sell them? How can they manage orders of physical products, physical services and network services that could come from a variety of network partner participants and require different levels of billing, activation and membership? They need to invest in customer-centric insight and order management – a solution that is focused on the customer, not on the product or service-centric; because frankly they don’t know or want to anticipate what services their customers will demand next over their network or what partner will arise to provide it. The solution should have a hyper-focus on the customer; true customer insight, campaign and experience management, omni-channel and mobile first priorities, flexible ability to manage physical and virtual products and services, lightweight and cloud-based with inventory and capacity visibility and status across all fulfillment systems.
Microsoft CEO Satya Nadella recently summed up the situation for telcos perfectly: “Any organizational structure you have today is irrelevant because no competition or innovation is going to respect those boundaries.” The providers who move toward this digital service landscape will be nimble and flexible when presented with new challenges and competitors – and based upon the last 5 years – we know those challenges are coming, the question is whether this time we’ll be ready for them?
Mobile World Congress started this week — and again it will bring over 40,000 telecommunications CxO’s to Spain from all over the world.
Every year there seems to be a dominant theme for the industry as this iconic event dawns over the beautiful city of Barcelona. 2013 was the year of ‘Big Data;’ it was everywhere and on everyone’s lips. For 2014, based upon my experiences in the industry and perusing the exhibition booths here I believe the focus this year will be solidly on ‘Customer Experience.’
The continual increasing pressure of over-the-top (OTT) services providers, saturated markets and increasing costs to acquire new subscribers and the increased expectations of the connected consumer have forced communications service providers (CSP) to follow the retail world into the realm of extreme customer experiences creating what we at IBM call the Customer Activated Telecom Provider.
In the fall of 2013, IBM surveyed over 200 telecommunications CxOs from around the world and 9 out of 10 responded they need the ability to quickly deliver new offerings while 71% said they are more concerned with competition from OTT providers than other telecoms. As a result of this pressure, 65% are now focused on customers as individuals instead of segments and 82% are focused on digital and social interactions with customers while only 12% are focused on face-to-face interactions in 2014.
Close collaboration with customers is indeed a dominant focus for telecom executives at the start of 2014. Why? Because as an industry, we have finally realized the impact a customer can have on our organization. Over 60% of respondents said that customers already influence their organizations to a ‘large extent’ and as a result 4 out of 5 industry leaders are looking to ‘digitize’ their front office operations— the systems that touch the customer experience.
This year at Mobile World Congress telecommunications providers should be focus on delivering extreme customer experiences to differentiate themselves from their traditional and non-traditional competitors.
At CES (Consumer Electronics Show) this year one of the biggest pushes for manufacturers is the 4k or UltraHD television set, which at a resolution of 4096 x 2160 essentially has about 4 times as much information displayed than your standard 1080p (1920 x 1280 resolution) television set. If you have seen one in person you know that its very sharp and looks great - except there is very little content for it yet. However, at CES Netflix, Sony and others committed to delivering content in 2014 in the Ultra HD format.
There’s a problem though, 1 hour streaming at the NetFlix UltraHD data rate of 15Mbs is going to come in at a whopping 16GB of data consumption. A standard HD movie stream today would only account for 4.5GB of data in that same hour.
Most customers today have virtually unlimited bandwidth for their broadband services since providers like Comcast in the US say that their customers only average 8GB - 10GB of data consumption each month and so they never really pay attention to their overall bandwidth usage. There are those out there (I’m one of them) who have cut their cable ties and are essentially steaming from Netflix, Apple and Hulu a lot. My last few months of consumption for a family of 5 is averaging around 400GB per month.
The problem is that Comcast only includes 300GB of data each month and they charge $10 per 50GB of data over the limit. For most users this has not been a problem in the past but as more and more people with Smart TVs, AppleTVs, Rokus, Chromecast, etc. it is going to become a bigger problem for everyone.
At 15Mbs my family of 5 can consume less than 20 hours of programming each month before we start getting penalty charges from Comcast.
Why? Because all of the sudden, anyone who is streaming 4k movies from providers like Netflix or Apple is going to quickly see what those of us who have cut cable are already seeing - notices from internet providers like Comcast telling us that we use too much data and they plan to start charging for it.
So be careful when looking at that new Vizio 4K UltraHD television set selling for under $1000 because the real cost for that television is going to depend upon how much content you plan on streaming to the set over the next few years.