December 03, 2012

Are My Customers Permanently Switching To Mobile?

We all lived through the transition from old-school direct marketing to e-commerce.
  1. E-commerce was a fad (customers tried it, then went back to old-school direct marketing).
  2. E-commerce became mainstream (customers switched, in large numbers, and did not go back to old-school direct marketing).
  3. E-commerce became boring (customers returned to normal behavior, just in a new channel, with some customers choosing to not make the switch).
We're beginning the same process with mobile.  While the pundits hound you about the myriad ways your business is stuck in the stone ages (e-commerce), your peers are doing research to see whether we're in (1) (2) (3) above.

It's easy to see if we're in (1) (2) (3) above.  Go back to our Multichannel Forensics framework of 2007, and apply it to e-commerce vs. mobile.

Query:  Capture all customers who purchased via e-commerce or mobile between November 2011 and October 2012.  Within this audience, tabulate how many customers purchased via e-commerce or mobile in November 2012.  Then, we calculate the classic website (e-commerce) and mobile index metrics (remember, the migration probability matrix is the probability of buying from a channel in the future, divided by the probability of buying in the future).

This table shows what happens when customers are trying mobile, but are not adopting it as a primary channel.

As you can see, customers who purchased via mobile last year switched back to e-commerce.  Customers are not comfortable making the switch.

Look at this table.  This is what it looks like when customers are getting ready to make the switch to mobile --- website customers are not defecting to mobile, but mobile customers are not switching back to the website.

Remember, an index > 20% means customers want to switch.  When the table looks like this, mobile has taken hold.  Mainstream customers are not willing to make the switch, but mobile advocates have switched, and are not as likely to go back to the e-commerce experience.  This is such a key transitional phase ... it has to be measured and understood.  When this happens, you make organizational changes ... you move the focus from e-commerce to mobile, even though e-commerce is where the sales still happen.  Your customer is making the change, at this point.

When your query results look like this, customers have made the shift, and mobile is about to become the dominant channel.

Mobile customers have moved beyond e-commerce, they are unlikely to switch.  Conversely, e-commerce buyers are migrating to mobile.  When your query looks like this, mobile is truly your future.

Which of the three scenarios fits your business?  It's easy to run the query.  Your analytics expert, digital analyst, or web analytics professional should be able to pound out this query in 15 minutes.  Run the query this afternoon.  Share the results with your Executive Team.

It is not hard to understand where your customer is in the mobile transition.  Stop listening to trade journalists and bloggers, folks who don't even have access to your customer database.  

Analyze your own data, and make your own decisions!!