1 - Foundations of the Shopper Economy
The author considers behavior to be a new currency. It has always been of interest to get the time and attention, and in previous ages when daily life was relatively unperturbed and leisurely, customers were happy to grant it. But in contemporary society, where there are many demands on our time and many firms vying for our attention, people find themselves with a "poverty of attention." In effect, time has become scarce, and the scarcity creates value in the economic sense. Nowadays people's attention is so valuable to so many who want to have it that it has become a medium of exchange.
(EN: This is likely not so new a concept, as the prospect of employment has always been an exchange of time for money in which the employee "sells" their behavior to their employer. It is, however, an awareness of the assumption that time off of the job is not leisure or waste, but a valued commodity.)
There's an aside that defines the term "shopper" as a person who is perusing products in which he is assumed to have an intention of purchasing, whether immediately or in the distant future. (EN: And here again is the assumption of shopper as a buyer-to-be.) The shopper is engaging in a series of information-gathering and evaluation exercises. This is differentiated from the same person in the role of a "buyer" (the decision is made and he is doing what needs to be done to complete the transaction) or a "consumer" (the transaction is completed and he is now storing or consuming the product).
The author looks to Virgin Mobile, which ran an experiment enabling people to have "free" cell phone minutes in exchange for watching and responding to advertisements. (EN: The same was tried with Internet access in the mid-nineties, and likewise failed). On enthusiastic user of the product boiled it down to the essentials: the company was asking him for two minutes of his time (between launching an application, viewing an ad, and responding to questions) in exchange for enabling him to do what he wanted for one minute.
Here, the author pauses to consider that this program is significantly different to traditional advertising. The promotional messages that the user receives are advertising, but the program itself involves paying the user for the time they invest in giving attention to the advertising. The two are distinctly separated, and the reward to the customer does not rely upon their taking action: they are rewarded for giving attention.
The benefit to the user, clearly, is free airtime. The benefit to the program is largely data: they have verification that their messaging was watched, and a bit of market research from the questions they asked. (EN: The advertiser is treated as a third party - likely because this program aired "house" promotions - but it also has the potential for the program to be financed by paying advertisers, further divorcing the benefit from the advertising.) Consider the kinds of behaviors that represent values for which marketers will, and should, pay.
The example given is clearly an instance in which the marketer is paying shoppers for their attention, perhaps straying a bit into the area of engagement because of the survey.
The author briefly describes the "shopkick" program, which involves users installing an application on a mobile device that records when they enter a physical store. The users of this program earn points that can be redeemed at hundreds of retailers.
(EN: Did some checking, and the network is still young but has expanded to thousands of locations, and the program has been extended to include POS data to provide rewards for purchases. While it's still a young program, it's gained the support of some major retail partners and one major credit card, as a replacement for or augmentation of loyalty programs. So it definitely looks like this concept has legs.)
One enthusiastic participant mentioned that an afternoon of shopping at a local mall gave him a total of 137 points - which is difficult to monetize because rewards are not consistent (one retailer offers a reward for 500 points, another for ten times as much).
Actions that earn points include behaviors such as entering the store, scanning a promotion, walking down a specific aisle, stepping into a fitting room, etc. Significantly, the points are earned for behaviors other than making a purchase - and the reason for doing so is similar to the traditional model of advertising, in which the advertiser pays for exposure to a market, not necessarily an immediate sale - though in this instance, the audience is being rewarded, not just the channel provider. Ultimately, the willingness to pay for behaviors is driven by the belief that they will ultimately lead to revenue through purchases, but there is no direct connection.
It's also mentioned that the "price" paid to the participant for interacting should be higher than the price paid for merely paying attention to advertising, commensurate to the time and effort the shopper is required to undertake to earn the reward.
A third valuable behavior is advertising, which is considerably more valuable to the marketer because the participant adds their own social influence to introduce the brand to a network of new shoppers. This may be as simple as a person who shares information as a passing mention, or as involved as a fan who spends a considerable amount of their own time aggressively promoting your brand.
Consumers already have, and are using, a wide range of options to share information about brands with their products. Anyone who mentions a product in a positive light, whether verbally or on a social media site, is advocating for your brand and generating credible and valuable word-of-mouth. The author presumes that people advocate in order to gain social prestige (being knowledgeable) or to extend help to someone who needs it.
The author refers to one program (among many) in which a vendor asks participants to allow it to post notes under their Twitter accounts that proclaim when they earn rewards points at their stores. Other merchants offer discount promotions to customers who "like" their Facebook pages or "+1" them in Google's social media tool.
Foursquare is a major player in this space - it enables people to announce their location to their friends, but in doing so they are also advocating for retail locations. Participants are given additional incentive to "check in" by receiving discounts and promotions for doing so. Entertainment venues are also becoming involved, rewarding people for providing more information, such as what television program or movie they are watching in a given location.
The author asked a heavy user of geolocation what their incentive was: the reply was to be more interactive in real places. By posting his location, and having friends that do the same, they are able meet up in real time more often. It also makes them aware of places and events that they had not considered, but might.
In a marketing sense, a customer who mentions being in a given place carries is giving it an implied endorsement- and if a friend happens to be nearby and joins them (going to a specific restaurant to dine with a friend rather than choosing a different one nearby) has an immediate sales impact.
Again, the reward is earned just for advocating, not on the condition that it results in a sale; and again, this is moving up the level of participation, and carries greater value as a "currency."
(EN: There has been some backlash against people who advocate for brands too often, which has damaged the effectiveness. Immediately, others are aware that they are only doing this to receive a discount or promotion and ignore the post. Some have even been chosen to dissociate with people who are constantly promoting.)
Traditional loyalty programs offer a discount for repeat purchases - which is not the same as shopper marketing because the reward depends on making the purchase. As such, the author doesn't have much to offer, as there are not any loyalty programs that offer an incentive that does not apply to buying from a specific merchant or using a specific payment card.
(EN: It may be a stretch, but there are firms that provide "gifts" to their regular customers that are based on their past business, but are not necessarily tied to future business. This is very common in B2B sales, where "trinkets" are given at year's end to good customers, in hopes of getting future business but not connected to it. It's unusual but not unheard of in B2C firms - I've received some such trinkets from car dealers, realtors, casinos, and specialty grocers over the years, but it's very rare.)
The author maintains that there is a continuum of increasing value, which largely corresponds to the level of effort required to pay attention, participate, advocate, and demonstrate. However, prices are set in the market, and as these transactions are not well established, it will be "rough" with some offering (or demanding) more for attention than others offer for advocacy.
There's also the notion that some products may not lend themselves to certain actions: no amount may be sufficient to compensate a person for promoting or even mentioning their familiarity with a product that addresses an embarrassing personal issue. There is some psychology involved: the more a person feels that their association to a brand projects a desirable image of themselves, the less it will take to get them to interact and publicly associate with it.
Ultimately, the interests of both parties must be served for a program to be successful. The marketer must believe he is eventfully getting sufficient revenue from the program to continue it, and the participant must believe he is getting sufficient compensation for supporting the program. Much like buyers and sellers in any market, we cannot be too emphatic or general about the value of things, as it will fluctuate over time.
The author considers shopper behavior to be a currency, not merely the target of a promotion. It is largely married to digital technology, which provides unprecedented capability and accuracy in it's ability to sense and report behaviors that can be translated into earnings (not to mention banking the value and facilitating its redemption).
The author mentions the sensor technology that leverages GPS, RFID, WAN triangulation, and other techniques to detect the location of a device (and presumably the person carrying it) as well as the capabilities of social media to track and report when a person speaks out about a brand, then to correlate the actions of the sender and recipients to the initial activity.
The implication is that these behaviors are not only more tractable than traditional channels such as television and print advertising, but also offers the ability to be very specific in targeting, to monitor effectiveness, and to make real-time changes. The value earned can be visible to all parties involved (issuer, banker, customer, and vendors)
Some random bits:
While online transactions remain married to real currencies, there is growing evidence that alternate currencies are also gaining popularity. That is, a person who wishes to purchase an item often has the choice of spending actual money by using a credit card, debiting a virtual account, spending promotional allowances such as credit card or merchant "points", or some combination of those things. As customers become more accustomed to using the latter categories, there arises the potential for this to become their preference - not only in the currency they spend, but the currency they earn.
There's an oblique reference to game money, such as gold in War of Warcraft, that has taken on a real-dollar value. Enthusiasts of the game will purchase game money with real money, or even pay a service to play their character to earn it. (An interesting aside, there have been allegations of Chinese prisoners being "forced" to play video games - but this is based on allegations of one former prisoner.) And it can be readily witnessed that many teenagers, given a choice of how to spend their spare time, are trading off the potential income of a part-time job in order to earn "game" money.
Another oblique mention is made of the value of personal information, and the way in which consumers are being more guarded about things that companies value that they have been able to obtain from them for free. More and more, consumers are expecting some reward in order for giving their information to a firm, and are beginning to take the same perspective on their time and attention.
Promotional currencies are also real currencies to the seller - because the points can be redeemed for merchandise or services for which a person might otherwise have been expected to pay, marketers aren't at liberty to hand out promotional inventive, but must set and wisely spend a budget.
Wages for Eyeballs
While offering shoppers an incentive for behaving in desired ways sounds like a win-win, there are some drawbacks.
- Primarily, there is the sense that many individuals who are not potential buyers will go through the motions to get something for free.
- There is also the potential damage to experience and brand when people are being paid to engage, and do so in spite of the fact that they feel "boredom, anxiety, and resentment."
- Marketers are also concerned that if people become accustomed to being paid to do these things, then they may come to expect it and there will be no going back to the days when they would do so for free
- These programs also constitute and additional expense for marketing departments, when using traditional media is no longer enough to be competitive
- There's also the notion that it may be destructive to the incomes of those who are in advertising if marketers begin paying their shoppers directly