On the evening of March 28, 2010, Gray Powell celebrated his 27th birthday at the beer garden of Gourmet Haus Staudt in Redwood City, Calif.
Mr. Powell, a graduate of North Carolina State, worked as a software engineer in the nearby headquarters of Apple, Inc. After perhaps a bit too much "celebration," Powell misplaced his phone and apparently forgot about it until the next day. We've all been there -- sometimes it is a wallet, or a briefcase or even a cell phone. If our cell phone is an iPhone 3GS, we might have mistaken it for Powell's. But his device turned out to be quite different indeed.
The person who found Powell's phone tried to locate its owner, but to no avail. Details of events that followed remain murky, but what was clear is that there was something very different about this particular iPhone. First, the 3GS enclosure was merely an incredibly elaborate disguise, inside of which was a phone no one had ever seen before. Despite the legendary security that surrounds Apple's upcoming products, the iPhone 4GS had been discovered in the wild.
What was most interesting (and perhaps instructive) about this little episode is the incredibly high-stakes game being played in this space. Apple had a custom-molded disguise made so the phone could be tested in real-life situations and yet remain undiscovered. When the phone made its way into the hands of the gadget site Gizmodo, its dissection and the discovery of upcoming features blew up a Web frenzy of massive proportion. In the end, Apple threatened to sue, Gizmodo returned the iPhone prototype and all was well in their iWorld.
Not smart to ignore smartphone potential
At first, you might think, "C'mon people, it's a phone." On face value, that's accurate, but you would be missing a critical guidepost on Marketing Highway 1. Beyond protecting the trade secrets that help Apple keep a leg up on the competition, smartphones are rapidly becoming a part of a much larger sea of change in marketing -- one that we ignore at our peril. Though this wave hasn't reached the hallowed shores of employee benefits just yet (though we have seen a rise in sea levels), it is about to hit the retail world like a tsunami.
We are familiar with these devices' use in facilitating social networking. Given our discussion in April about GenY-ers and their buying habits, it should be unsurprising that this is going to become an ever more important driver of behavior. Those behaviors will surely affect all industries and segments. Underscoring the importance of habits and preferences of social media users, the Retail Advertising and Marketing Association (RAMA) recently released a survey with very instructive results.
"Social Media: An Inside Look at the People Who Use It" compares U.S. social media users to the average American adult. It finds that 70% between the ages of 18-34 regularly use Facebook more than other sites. Forrester Research estimates that U.S. consumers now generate over 500 billion online impressions on each other regarding various products and services. Compared to 2 trillion online advertiser-generated impressions, social applications have gained major significance -- and that authentic consumerism is growing.
The smartphone has become the ubiquitous communication tool used by this key demographic. Savvy marketers are finding new ways to use the technology to reach out to the social media crowd. In mid-April, Apple announced that the new 4Gs phone will sport an updated operating system which will include a new process. Dubbed "iAd," it will integrate interactive, rich media ads into iPhone, iPod Touch and iPad apps. Apple says the technology is well-thought-out so as not to be intrusive, and yet the reach of those advertisers participating will exceed one billion ad opportunities per day. Think about extending your marketing scope using that metric!
Proximity marketing
The innovative use of smartphones isn't limited to the online universe -- the "clicks" -- there are some new tricks for traditional retailer "bricks" as well. A start-up called ShopKick, Inc. will be used by Best Buy and Macy's to indicate when shoppers are near their stores and will present those users (iPhone and Android operating systems at first) with coupons or targeted marketing offers. Martine Reardon, Macy's vice president of marketing and advertising says the app will help the department store find new ways to communicate with consumers while they are inside Macy's and when they are nearby and might be lured into the store with just the right offer.
According to The Wall Street Journal (April 21), "Other start-ups are also racing to exploit new cellphone features and new habits among their users, which include location-aware social networks as well as doing product research before and during store visits." All of these efforts are currently geared to those clicks and bricks that sell product. The coupling of those 18-34 year-olds and their social-network buying habits with any commodity may be the harbinger of a new way of purchasing anything they see as a pure product.
iAds for health insurance
Let's say that these consumers need to find health insurance -- perhaps in a state-run exchange. To them, one product pretty much looks like another today. If we continue down the new road the PPACA has set us on, we may face continued commoditization of the health insurance products we market today. How long will it be before products are marketed with iAd? How can today's brokers and agents position themselves for continued viability?
There is an interesting tidbit tucked into the RAMA study. These social media users begin an online search after good old-fashioned face-to-face communication. Moreover, once they have found what they are looking for, nearly 75% of the same community communicates with others about a service, brand or product the same way: face-to-face.
It is kind of a mixed bag for those who have been in the business for some time. The likelihood of further product commoditization seems pretty well assured. The ability to use some of the skill sets we've learned in belly-to-belly sales conversations will continue to be a significant asset. It will be important to take advantage of a myriad of new techniques and technologies for reaching out to this burgeoning population.
Of utmost import will be the need to differentiate based on the value that a benefits professional can add. Even if it ends up being "iValue," it will still be the most important "app" we have.
David A. Saltzman, RHU, DIA, is national marketing director of Chicago-based Disability Resource Group Inc. The South Carolina resident is a past president of NAHU and has been a health, disability, life and employee benefits broker for more than 25 years. Readers may contact him at dsaltzman@drgdi.com.
