Download thishandbook for free!Go tohttp://www.mobileYouth.organd sign up to our newsletter
Introduction to the $500 billionyouth mobile market“The future’s already out there, it’s just not evenly distributed” - Wi...
About mobileYouthmobileYouth is a research advisory firm focused on the youth mobilemarket.We help clients better understan...
TABLE OF CONTENTSWhy are youth important to your business? 5Advertising 14Apple 17Buyer Behavior 19Customer Experience 21C...
Pricing 56Retail 58Samsung 61Smartphones 63Social Media 67Tablets 70Trust 72Youth Branding 74Next Step 774
Why are youth important to yourbusiness?OverviewThere are 3 reasons why youth need to be on board to keep your brandreleva...
Exploding the Myths• “Youth are cheap”• “Gen Y is fickle”• “Millennials are only good for prepaid“We hear these words every...
• Great brands like Apple and Amazon have successfully evolved fromARPU to lifetime valueApple: Building a Beachhead on th...
base of female and younger riders have been marginallysuccessful.” (source: Time Magazine)Now both brands are suffering th...
more of their disposable income meaning they have more skin in the game,meaning they place a higher premium on getting in ...
2.Youth are the InfluencersGen Y, Millennials and students are the most vocal when it comes to sharingreviews and informati...
(particularly primary school children) who soon co-opted the device andturned it into a games machine.Youth often take dev...
If you want to see how the mass market of tomorrow will be using theirdevices, look at how youth are using them today – mo...
Youth StatisticsThe mobile youth market is worth over $400 bn annually (source: TheMobile Youth Report)There are 1.6 billi...
AdvertisingAdvertising Reports• Download Report Preview: Social Media, Advertising and Influence• Download Report Preview: ...
Advertising is like sex, only losers pay for it – anonAdvertising Key ConceptsAd Agencies: An ad agency would much rather ...
Content is the value we see. But context is the only value people feel.Context is the meaning that customers give to your ...
AppleApple Reports• Download Report Preview: Generation Tablet• Download Report Preview: How can Challenger Brands Beat Sa...
Apple StatisticsApple iPhones account for 71% of global smartphone industry profit sharedespite making only 10% of global s...
Buyer BehaviorBuyer Behavior Reports• Download Report Preview: Price and Handset Purchase Decisions• Download Report Previ...
59% of buyers use their smartphones to check product availability and 35%check store hours before visiting a retail store ...
Customer ExperienceCustomer Experience Reports• Download Report Preview: Peer to Peer Customer Service and Loyalty• Downlo...
“LG is continuously innovating to offer creative ways to offer a userexperience that adds value to our customers. It’s the...
Customer ServiceCustomer Service Reports• Download Report Preview: Customer Service is Youth Marketing• Download Report Pr...
“We see our customers as invited guests to a party, and we are the hosts.It’s our job every day to make every important as...
Peer-to-peer customer service turns what is traditionally a cost to thebusiness into a social benefit to the customer.Tradi...
InfluenceInfluence Reports• Download Report Preview: Fans• Download Report Preview: Metrics and Youth Marketing• Download Re...
“Sell to the sold” – Seth Godin“We take most of the money that we could have spent on paid advertisingand instead put it b...
Influence Key ConceptsAttention Economy: Youth don’t wake up thinking about your brandanymore. Advertising was born of an e...
“customers don’t know” and, therefore, it’s the prerogative of the priesthood(agencies) to tell us what we do really want ...
about the obscure nature of “buzz” and “engagement”. Behind this rhetoriclies a fear that should we be able to measure it,...
InnovationInnovation Reports• Download Report Preview: Youth, CoCreation and InnovationInnovation QuotesThe first ever reco...
in her ear. Then you’re connected with about two feet of headphone cable.”– Steve Jobs“Look at the design of a lot of cons...
planet has to spend doing things they care about. In the 20th century, thebulk of that time was spent watching television,...
Hacker Way: Facebook’s “Hacker Way”, adopted as their internal modusoperandus, teaches that “done is better than perfect”....
long waiting for innovation to happen. By contrast, real innovation is a fuzzy,messy social process that involves many han...
LoyaltyLoyalty Reports• Download Report Preview: How can Operators Win the Youth Market?• Download Report Preview: Peer to...
Loyalty Statistics74% of customers reported they participated in brand loyalty programs, only12% said that it paid to be i...
Mobile CustomersMobile Customer Reports• Download Report Preview: Smartphones and Ethnic Youth• Download Report Preview: S...
Mobile Customer StatisticsYouth spend between 15 and 30% of their disposable income on theirmobile handsets (source: The M...
black females in South Africa etc) being the polar opposite of how theestablished brand and their ad agency would have us ...
based on passion not geography. We’ve long talked up the digital revolutionas an industry waxing lyrical about new frontie...
Mobile DataMobile Data Reports• Download Report Preview: Mobile Video• Download Report Preview: Operators, Youth and Music...
60% of youth access internet on their smartphones to organize a gatheringwith their friends (source: The Mobile Youth Repo...
Mobile MessagingMobile Messaging Reports• Download Report Preview: Mobile MessagingMobile Messaging Quotes“Around 18 month...
80% of youth say they use messenger apps with SMS, instead of replacingSMS (source: The Mobile Youth Report)Messaging app ...
Mobile MusicMobile Music Reports• Download Report Preview: Operators, Youth and Music ServicesMobile Music Statistics44% o...
Mobile Music Key ConceptsSocial Tools: People don’t buy stuff, they buy what stuff does for them. Themobile phone is a pow...
Mobile PaymentsMobile Payment Reports• Download Report Preview: Youth and Mobile Payments• Download Report Preview: Youth ...
88% of youth want better security in mobile payment methods but 81% ofservice providers push convenience as the key market...
Mobile VideoMobile Video Reports• Download Report Preview: Mobile VideoMobile Video StatisticsMobile video will account fo...
Mobile Video Key ConceptsConvergence vs Divergence: The industry vision of a singular convergedtechnology or device is bec...
Operator StrategiesMobile Operator Reports• Download Report Preview: How can Operators Win the Youth Market?• Download Rep...
Operators are missing out on 35% of youth mobile expenditure emergingfrom new services such as music, games, video and oth...
PrepaidPrepaid Reports• Download Report Preview: Prepaid Market Overview• Download Report Preview: Price and Youth Loyalty...
Youth on prepaid accounts spent most of their time browsing the internet (25min per day), checking social networks(17 min ...
PricingPricing Reports• Download Report Preview: Prepaid Market Overview• Download Report Preview: Price and Handset Purch...
Youth spend 36% of their monthly budget on mobile and weight increasingmobile expenses against social experiences like goi...
RetailRetail Reports• Download Report Preview: Youth and Mobile Payments• Download Report Preview: Youth and Mobile Shoppi...
“Our mission was to build a place to enrich the lives of customers…a placeto gather, to learn and to experience” – Ron Joh...
Retail Key ConceptsFrontline: The point at which the customer interacts with the brand (oftenretail). There are many forms...
SamsungSamsung Reports• Download Report Preview: Generation Tablet• Download Report Preview: Handset Brands and the Youth ...
34% of current Samsung smartphone owners intend to stick with Galaxysmartphone when its time to upgrade (source: The Mobil...
SmartphonesSmartphone Reports• Download Report Preview: Handset Brands and the Youth Market• Download Report Preview: Pric...
Smartphone Quotes“Smartphones are reinventing the connection between companies and theircustomers” – Rich Miner, Co-Founde...
Smartphone Key ConceptsBring Your Own Device (BYOD): Key trend in the enterprise market.Employers allowing employees to br...
Smartphone Resources• 5 ways to build a better smartphone experience (without changing thehandset)• BlackBerry growth depe...
Social MediaSocial Media Reports• Download Report Preview: Smartphones and Teen Social Lives• Download Report Preview: Soc...
“People share, read and generally engage more with any type of contentwhen it’s surfaced through friends & people they kno...
media is social. Media (meaning “inbetween”) exists to provide a channelbetween people. What is now known as “traditional”...
TabletsTablets Reports• Download Report Preview: Generation TabletTablets Quotes“Tablets will be the mother of all markets...
Tablet app revenues ($48 bn) will surpass smartphone app revenues ($44bn) in 2018 (source: The Mobile Youth Report)76% of ...
TrustTrust Reports• Download Report Preview: Customer Service is Youth Marketing• Download Report Preview: Metrics and You...
Trust Key ConceptsTrust: You can’t scale trust, attention and love. All the things that factoriesthought of once as scarce...
Youth BrandingYouth Brand Reports• Download Report Preview: Social Media for Mobile Brands• Download Report Preview: Socia...
Youth Brand Statistics50% of youth recommend a brand because they have had a positiveexperience with the brand (source: Th...
where a Youthful brand (like Apple) appeals to youth without being overtlyyoung by promoting a positive customer experienc...
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(mobileYouth) The Youth Mobile Handbook - Key Resources on Youth Mobile Culture

  1. 1. Download thishandbook for free!Go tohttp://www.mobileYouth.organd sign up to our newsletter
  2. 2. Introduction to the $500 billionyouth mobile market“The future’s already out there, it’s just not evenly distributed” - WilliamGibsonIf you want to understand youth trends and mobile culture, the Youth MobileHandbook is the starting point.If you’re a mobile professional, involved in research and insights or a youthmarketer, you will benefit from accessing 10 years of our research insightsand knowledge in one handy document.We’ve compiled easy lists of:• Statistics• Key concepts• ResourcesHow you can use this information:• content for your next presentation to the board• ideas and data to brainstorm with your team members• links to research reports to acquire for internal strategy and marketing1
  3. 3. About mobileYouthmobileYouth is a research advisory firm focused on the youth mobilemarket.We help clients better understand young mobile owners through researchand consultancy. Our annual Mobile Youth Report which is sold into over 80countries and 300+ clients.We are a team of digital anthropologists, published authors and researchanalysts covering 65 markets. mobileYouth was founded by Graham Brownand Josh Dhaliwal in 2001 to provide IT, telecoms and media clients withresearch on youth mobile culture.We work with major brands such as Nike, Vodafone and MTV who want toreach out to the next generation of customers but are uncertain how to dothat and confused as to how to reach them. We work with you to understandyour business model and provide market reports on how the next generationuses mobile phones and the implications for your business. We provide youwith information on “why” your prospects are using mobile phones the waythey are and help you understand the implications for your business, so thatyou can make meaningful decisions on how to connect with these usersnow, and also in the future.2
  4. 4. TABLE OF CONTENTSWhy are youth important to your business? 5Advertising 14Apple 17Buyer Behavior 19Customer Experience 21Customer Service 23Influence 26Innovation 31Loyalty 36Mobile Customers 38Mobile Data 42Mobile Messaging 44Mobile Music 46Mobile Payments 48Mobile Video 50Operator Strategies 52Prepaid 543
  5. 5. Pricing 56Retail 58Samsung 61Smartphones 63Social Media 67Tablets 70Trust 72Youth Branding 74Next Step 774
  6. 6. Why are youth important to yourbusiness?OverviewThere are 3 reasons why youth need to be on board to keep your brandrelevant – not just in the future but right here today. Before we get started,here are 3 reports you’ll be interested in to give you the necessarybackground info, data and case studies:3 Recommended Research Reports:• The mobileYouth Economy: The Hidden Value in Mobile’s Long Tail – a 24page PDF report which details where the growth markets in mobile are2013-2017.• Do Mobile Handset Brands Need to Focus on the Youth Market? – a 25page PDF outlining the youth business case for mobile handsetmanufacturers.• Do Mobile Operator Brands Need an MVNO or Sub-Brand to Target theYouth Market? This 17 page research PDF compares branding options foroperators and addresses the key mistakes made when engaging youth.5
  7. 7. Exploding the Myths• “Youth are cheap”• “Gen Y is fickle”• “Millennials are only good for prepaid“We hear these words every day and every day we simply point to theevidence – great brands like Apple and Amazon have successfully built theirbusinesses on the youth market, so why can’t you?Defining the Youth MarketAccording to Wikipedia:Generation Y, also known as the Millennial Generation, is thedemographic cohort following Generation X. There are no precise datesfor when Generation Y starts and ends. Commentators use beginningbirth dates from the latter 1970s, or from the early 1980s to the early2000s.That means we’re dealing with customers from the early teens up until thethreshold of their 30s. That’s a very large market and with it a very wide andcomplex set of mobile customers. Trying to categorize these customers asone blob for analytical convenience is as difficult as using one metric tomeasure their value – but that’s what we as an industry do.Redefining ValueThe issue stems from an inherent problem in the mobile industry – the onlymeasure of value we have of a customer’s worth is their phone bill.But, what of the student who spends $500 on an iPhone and then puts it onprepay at $12 a month? The reality is that ARPU is a weak measure ofvalue and particularly for mobile operators, we need to move frommeasuring revenue to measuring value.• Youth are cheap if we only consider ARPU• Our measures of value need to evolve from ARPU to lifetime value6
  8. 8. • Great brands like Apple and Amazon have successfully evolved fromARPU to lifetime valueApple: Building a Beachhead on the Student MarketApple got this right, first building a Beachhead in the student market with itsmusic offering, iTunes and the iPod. From this vantage point it moved intothe iPhone and the rest, as they say, is history. If Apple had gone after thehigh-spending executive customers, it would have been duking it out withMicrosoft on the Redmond’s home turf.When I went to college, everyone used PC. Only left-handers used Macs.By the late 90s, all the college kids were using Macs. Now, the samestudents are IT managers and heads of departments with their iPads andiPhones.• Apple built on its brand Beachhead in the student market• Apple adopted a long term organic approach to growing the brand• If Apple had chased high end customers first, it would have lost toMicrosoftThe Harley Effect: What Ages BrandsNokia and Blackberry didn’t get it right. From 2006-2008 both Nokia andBlackberry rose to prominence as the leading youth brands not just in theircategory but globally. Nokia was ranked as the #1 youth brand in the world.Blackberry beat Coke as the most respected youth brand in South Africa in2010, the same year of the soccer world cup (where Coke was a $500mheadline sponsor).Nokia and Blackberry suffered from what we call the Harley Effect – agingwith your customer base. The average age of the Harley Davidson owner isnow 51. Middle aged folk remember Easy Rider and Dennis Hopper fromtheir era as the icons of cool. The problem is, that Harley chased the highend customers rather than reinvest their profit into staying relevant withyouth.Harley-Davidson Tries to Rejuvenate Its Business“Its patrons grew older and wealthier, but its efforts to cultivate a large7
  9. 9. base of female and younger riders have been marginallysuccessful.” (source: Time Magazine)Now both brands are suffering the tail end of a slow-motion car-crash, thebasketball feeding through the hose pipe and other analogies. It will taketime, as with aged brands like Levis 501, for these two to rediscover theirroots in the youth market and feed through to relevance once again.• Short term focus on ARPU seduces brands into focusing on high endcustomers• If you always chase the high end, middle market, your market will age outof relevance• Harley Davidson used to be a cutting edge youth brand but now it suffersfrom an aging marketThe 3 ReasonsThe Key to winning the youth market is building a compelling business casewhy. Why do we need youth?If it’s only about ARPU, you’re always going to chase the high endcustomers and end up like Harley Davidson.The challenge here is building a case around long term value, the stuffwhich happens off the phone bill. So, here are 3 reasons to help you buildthat case:1.Youth are the High End CustomersConsider the phone bill and youth appear to be cheaper than middle agedexecutives. According to The Mobile Youth Report, execs spend marginallymore (10-20%) but are often on contract as opposed to prepaid.What isn’t factored into this equation is the complete picture:• Spend on the handset• Spend on mobile data services and accessoriesOur research shows that youth are far more willing to spend on the abovetwo categories than older customers. In fact, they’re spending significantly8
  10. 10. more of their disposable income meaning they have more skin in the game,meaning they place a higher premium on getting in right.Only 42% of youth rated price as “very important” as a factor in choosingtheir handset (the lowest of all age groups according to our research), with88% citing a good customer experience as key to their purchase decision.Factors included warranty, durability and reliability.That means not only do youth cite tangible factors other than price, theyalso offer real insight into what drives the market. Price is never a goodindicator of product demand.Price is overrated by the industry. According to the Mobile Youth Report,industry execs thought “price” was the #1 reason why people boughthandsets followed by experience at #2. In reality, customers cited thesefactors the other way round showing that as an industry, our logic andunderstanding of buyer behavior is very basic.When it becomes about price, you’re in the business of commodity. Ifhandsets and operators want to know why buy, look beyond the oldercustomers who tend to mention price and see what youth are saying aboutthe offers.Youth propensity to spend on value added services is well documented.Youth use mobile messaging services 10x more than older peers. Butbeyond messaging, youth are spending on music, games, video and apps,opening up these new markets to further investment with their initialrevenues.The value of youth should not be confined to the phone bill. This logic limitsyou to the mistakes of brands like Nokia, Blackberry and Levis. Think morelike Apple and Amazon and invest in the long term.• If you consider complete spend (ARPU + handset + off bill services/products), youth are high end customers• Youth rate experience over price. Older customers rate price. If you wantto move away from the race-to-the-bottom you have to seek answers inthe youth market• Youth means investing in the long term. It’s not an either-or situation withyoung vs old customers in the same way business should not focus on theshort or the long term. Business needs to focus on both.9
  11. 11. 2.Youth are the InfluencersGen Y, Millennials and students are the most vocal when it comes to sharingreviews and information about products with peers. 57% of teenage girlsand 47% of teenage boys share new brands or trends with their friends(source: The Mobile Youth Report).What separates the youth and older markets is the youth market’spropensity to create Earned Media.A quick 101 on Earned Media from Wikipedia to bring you up to speed:Earned media (or free media) refers to favorable publicity gainedthrough promotional efforts other than advertising, as opposed to paidmedia, which refers to publicity gained through advertising. Earnedmedia often refers specifically to publicity gained through editorialinfluence, whereas social media refers to publicity gained throughgrassroots action, particularly on the Internet.Earned Media is key to brand success today.But it’s not just each other they’re influencing. Consider the mother of theteenager daughter who’s just learned to use WhatsApp thanks to herdaughter installing it on her Samsung Galaxy. Youth tend to be theeducators and introducers of new technologies into families.Brands are often scared to let youth get hold of their products and startadvocating them but this is the route to the adult market. Of course, it takestime but Apple has risen to prominence with the highest NPS (net promoterscore) of all handset brands on the back of a highly vocal student populationwho grew up with the brand.• Youth are the most vocal customers• Youth influence each other and adult customers• The route to the adult market (long term) is through organic growth in theyouth market3.Youth Drive InnovationWhen parents first bought the iPad, they bought it on the promise of theeducational tool painted by its initial marketing. In reality, it was youth10
  12. 12. (particularly primary school children) who soon co-opted the device andturned it into a games machine.Youth often take devices out of the context they were originally intended forand turn them into something better (Blackberry and BBM are good cases inpoint). SMS represents possibly the most significant example of this, giventhan SMS was originally designed by industry engineers as a system testtool. $1 trillion later, youth have demonstrated their ability to turn ourmistakes into successes.Innovation today is fraught with risk. Consider MMS or Location BasedServices – 2 very expensive mistakes made by the mobile industry. It tookthe best part of a decade to see even the smallest upticks in customerbehavior on these two platforms. Only when the industry let go andcustomers took control did MMS or LBS become anything of note.De-risking innovation means allowing youth to take the technology, run withit and turn it into something useful. Something useful means applicable forthe less-tolerant mass market who want products out of the box. Whereyouth will navigate inconsistency, the adult mass market wants everything tosimply work.Launching products onto the adult mass market is risky, particularly if youare targeting corporate executives. If you filter it through the youth marketfirst, you get a better idea of applicable charging models, usage scenariosand the messages you need to emphasize in your marketing when laterapproaching the mass market.• Youth drive the uptake of new technologies• Youth today provide a mirror to how the mass market will use technologiestomorrow• Investing in the innovation of the youth market today allows you to de-risknew product launches for the mass market tomorrowSummaryGreat brands are first built in the youth market. If you chase the high endcustomers your market will eventually fall off the cliff. You need to begrounded in both markets – an approach that’s worked effectively for brandslike Apple and Amazon over the last decade.11
  13. 13. If you want to see how the mass market of tomorrow will be using theirdevices, look at how youth are using them today – mobileYouth12
  14. 14. Youth StatisticsThe mobile youth market is worth over $400 bn annually (source: TheMobile Youth Report)There are 1.6 billion mobile youth in the world today (aged 5-29) (source:The Mobile Youth Report). As a standalone country they’d be bigger thanChina.Brands with a strong youth beachhead (e.g. Apple) dominate industry profitshares (70%) despite having a small global market share (10%) (source:The Mobile Youth Report)Youth brands (e.g. Boost Mobile) have grown to become the #1 prepaidcarrier in the US despite the presence of industry leaders like VerizonWireless and AT&T (source: The Mobile Youth Report)Young Fans generate 80% of the brand’s word-of-mouth and the Fans withthe top 20% NPS scores are responsible for 80% of company profits(source: The Mobile Youth Report)Youth Resources• BlackBerry growth depends on youth• Why should Samsung focus on youth now?• Youth lead high-end smartphone market but operators need to change totake advantage of this opportunity13
  15. 15. AdvertisingAdvertising Reports• Download Report Preview: Social Media, Advertising and Influence• Download Report Preview: Who or What influences youth purchase?• Download Report Preview: Winning the Hearts and Minds of YoungCustomersAdvertising Quotes“Give them quality. That’s the best kind of advertising” – Milton HersheyAdvertising is a tax on boring products – anon“It no longer makes economic sense to send an advertising message to themany in hopes of persuading the few” – Lawrence Light, CMO McDonald’s“We found advertising works the way the grass grows. You can never see it,but every week you have to mow the lawn” – Andy Tarshis, A.C.NielsenCompany“Nike didn’t discover the power of advertising, they discovered the power oftheir own voice” – Dan Wieden14
  16. 16. Advertising is like sex, only losers pay for it – anonAdvertising Key ConceptsAd Agencies: An ad agency would much rather spend $1m creating“active” stuff. E.g. create a cool flash mob (read T-Mobile “Life is forsharing”) or throw parachute your new youth car out of a plane (readChevvy Sonic) than talk about real world stuff like passive communication,hanging out and everyday interaction. There’s a curious anomaly inmarketing today; ad agencies don’t advertise. When pressed, most will giveyou a number of reasons why they don’t need to from being a “business-to-business” concern to not needing to chase after clients. You wouldn’t takemedical advice from a doctor who smoked, or a financial adviser who wasbankrupt. Why, then, build your brand with a company that doesn’t do forthemselves what they’re doing for your brand? Advertising is a tax on boringbrands. Advertising is a remedy not a business strategy.Attention Economy: Youth don’t wake up thinking about your brandanymore. Advertising was born of an era when youth trust and attentionwere abundant. That simply isn’t true anymore.Authenticity: In the post Big-Idea era of marketing, authenticity can nolonger be bought or sold, traded as a commodity by clever advertisingagencies, it must be earned. More importantly, it’s a process that takes time.Agencies cling to the idea of viral video campaigns that can project a boringbrand into the world of youth authenticity overnight thus bypassing thenecessary groundwork and foundations that often takes years if not decadesto create. Perhaps the root of the problem lies in an industry that exists on aquarterly basis, where very little space is given to projects that provide longterm structure and authenticity for a brand, favoring instead short, sharp“hits” that spike youth attention only to die away until the next campaign isresurrected.Awareness: Terms like “awareness”, “top of mind” and “market share” areincreasingly no more than vanity metrics for brands that insist on followingthem. If customers like you, be afraid, be very afraid. Because, in today’sattention economy being liked means being invisible.Content vs Context: The world isn’t as it seems, it’s as we tell it. Physicalform (content) is shaped by meaning (context). Content is the product youput out in the market – what you make for them. We become easily seducedby the world of Content, the product, advertising and design agency spin.15
  17. 17. Content is the value we see. But context is the only value people feel.Context is the meaning that customers give to your product – what youmake them feel. Consider that word context again. Context: from the latin“con” – to join, and “textere” – to weave fabric. Context is the fabric. Takethe component threads out of the tapestry they are meaningless but as onethey tell a story.Earned Media: Earned media (or free media) refers to favorable publicitygained through promotional efforts other than advertising, as opposed topaid media (PR, advertising, sponsorship etc) (source: Wikipedia). The coreto youth marketing is Earned Media. Fans drive Earned Media and if youwant an army of vocal Fans you need an active Frontline. This completeSystem is measurable through simple metrics like NPS.Advertising Statistics39% of youth said their purchase decisions were influenced by TV adscompared to 94% who said that what their best friends had to say affecttheir purchase decision the most (source: The Mobile Youth Report)70% of youth reported feeling annoyed by ads that interrupt their daily liveswhile 44% said that they were unlikely to buy a product after coming acrossan ad (source: The Mobile Youth Report)The average American youth will have seen 120,000 marketing messagesby age 17 (source: Kahnemann)The human brain gates out 95% of all the information it receives at any onetime (source: Graham D Brown)Advertising Resources• Can Samsung beat Apple by spending more on advertising?• Change Agents: Author Graham Brown reveals who is the real drivingforce of mobile innovation• The Power of the Outlier: Author Graham Brown discusses why Outsidersare key to innovation16
  18. 18. AppleApple Reports• Download Report Preview: Generation Tablet• Download Report Preview: How can Challenger Brands Beat Samsungand Apple?• Download Report Preview: How can Samsung beat Apple?• Download Report Preview: The 15 Brands That Will Define Mobile in 2013Apple Quotes“Look at the design of a lot of consumer products — they’re reallycomplicated surfaces. We tried to make something much more holistic andsimple. When you first start off trying to solve a problem, the first solutionsyou come up with are very complex, and most people stop there. But if youkeep going, and live with the problem and peel more layers of the onion off,you can often times arrive at some very elegant and simple solutions. Mostpeople just don’t put in the time or energy to get there. We believe thatcustomers are smart, and want objects which are well thought through.” –Steve Jobs17
  19. 19. Apple StatisticsApple iPhones account for 71% of global smartphone industry profit sharedespite making only 10% of global smartphone industry market share(source: The Mobile Youth Report)75% prospective smartphone buyers intend to buy an iPhone in the futurebecause they view the brand as prestigious (source: The Mobile YouthReport)85% of current iPhone owners intend to purchase an iPhone when it’s timeto upgrade their contract (source: The Mobile Youth Report)Apple retail revenue of $6,200 per square foot surpasses revenues fromtraditional retailers like Best Buy ($800) and Tiffany ($3,000) (source: TheMobile Youth Report)Apple generates 2X more buzz than Samsung in the absence of regularadvertising campaigns (source: The Mobile Youth Report)Apple Resources• 5 ways to build a better smartphone experience (without changing thehandset)• BlackBerry growth depends on youth• Can Samsung beat Apple by spending more on advertising?• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience• The Top 3 Reasons Why Youth Buy Samsung (and why these are notenough to beat Apple)• What are Social Tools? Author Graham Brown shares a new way to lookat mobile phones• Why should Samsung focus on youth now?• Youth lead high-end smartphone market but operators need to change totake advantage of this opportunity18
  20. 20. Buyer BehaviorBuyer Behavior Reports• Download Report Preview: Price and Handset Purchase Decisions• Download Report Preview: Who or What influences youth purchase?Buyer Behavior Quotes“The essential difference between emotion and reason is that emotion leadsto action, while reason leads to conclusions” – Donald Galne“People buy on emotion and justify with logic” – Dan ArielyBuyer Behavior Statistics83% of youth bought their handsets based on what peers (not what adagencies) said about the brand (source: The Mobile Youth Report)Top emotional factors that affect youth purchase decisions are status (75%),design (65%) and convenience (58%) (source: The Mobile Youth Report)74% of youth prefer to visit a store before making a smartphone purchase to‘try’ and ‘see’ the product (source: The Mobile Youth Report)19
  21. 21. 59% of buyers use their smartphones to check product availability and 35%check store hours before visiting a retail store (source: The Mobile YouthReport)26% of teens who bought a smartphone for the first time got a second handsmartphone (source: The Mobile Youth Report)Buyer Behavior Key ConceptsEmotion vs Logic: People buy on emotion and justify with logic. Traditionalresearch (through surveys or online questionnaires) is often limited toappreciating only the logic of behavior e.g. “Q: Why did you buy the phone?”“A: Because of the QWERTY keyboard”. The quality of your insights is afunction of the quality of your relationships. The deeper the trust andinsights, the more likely people are to yield emotional answers e.g. “I boughtthe phone because I didn’t want to feel left out.” Similarly, If you understandwhy people buy cigarettes you also understand why people buy; why wouldanyone buy a product that killed them? Logically, cigarettes don’t makesense; cigarettes are expensive, addictive, offensive to a growing number ofpeople and, most importantly, dangerous. We buy at the emotional layer ofour subconscious based on the context of a product but when pushed tojustify our behavior we’ll rationalize it as a logical action.Pink Phone Syndrome: We spend most of our lives thinking about theopposite sex but we truly understand little about their mechanics orcomplexities. It amazes me that the best design agencies can do whenconsidering these vast oceans of misunderstanding the best the can comeup with is the pink phone. If we look at the data we start to understand whythe creative industry is so poor at understanding the needs of femalecustomers: only 3% of the advertising industry’s creative directors arewomen. Only 1 of the last 85 winners of Best Director at the AcademyAwards was a woman.Buyer Behavior Resources• Can Samsung beat Apple by spending more on advertising?• Change Agents: Author Graham Brown reveals who is the real drivingforce of mobile innovation20
  22. 22. Customer ExperienceCustomer Experience Reports• Download Report Preview: Peer to Peer Customer Service and Loyalty• Download Report Preview: Winning the Hearts and Minds of YoungCustomers• Download Report Preview: Youth and Retail for Mobile BrandsCustomer Experience Quotes“You‘ve got to start with the customer experience and work back toward thetechnology – not the other way around.” – Steve Jobs“We hung out with them at malls, ate dinner with them, went shopping andclubbing with them and spent a lot of time looking in their wallets and talkingabout money,” – David McQuille, Group Customer Experience at OCBCBank“Think about your device. Battery life is a challenge for most people. Youshouldn’t need to carry around a charger to make it through the day. If yourkid spills their drink on your tablet, the screen shouldn’t die. And when youdrop your phone, it shouldn’t shatter.” – Google CEO, Larry Page21
  23. 23. “LG is continuously innovating to offer creative ways to offer a userexperience that adds value to our customers. It’s the positive UX that willdifferentiate smartphones in 2013 and beyond, not only cutting-edgehardware specs.” – Jong-seok Park, President and CEO of LG ElectronicsMobile CommunicationsCustomer Experience Statistics56% of youth believe that a good mobile service experience depends oncustomer care and network quality (source: The Mobile Youth Report)63% of youth believe that a good smartphone experience depends ondevice quality and customer support (source: The Mobile Youth Report)21% of youth said that hidden fees and unexplained costs were their biggestconcerns negatively affecting their mobile experience (source: The MobileYouth Report)The top 3 factors that contribute most to customer experience are BrandTrust (65%), Customer Service (62%) and Earned Media (58%)  (source:The Mobile Youth Report)81% of people share negative experiences with friends and family while72% share positive experiences (source: The Mobile Youth Report)Customer Experience Key ConceptsTotal Cost of Ownership: The complete cost of owning a device orsubscribing to a service factoring in all the monetary and non-monetarycosts after the sale. For example, buying an expensive charger for thephone increases the TCO. Downloading software updates although freemay also increase the TCO because they require effort and energy on thecustomer’s behalf.Customer Experience Resources• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience• The Top 3 Reasons Why Youth Buy Samsung (and why these are notenough to beat Apple)22
  24. 24. Customer ServiceCustomer Service Reports• Download Report Preview: Customer Service is Youth Marketing• Download Report Preview: Peer to Peer Customer Service and LoyaltyCustomer Service QuotesCustomer service is your best marketing strategy – mobileYouth“We believe that customer service shouldn’t be just a department; it shouldbe the entire company.” – Tony Hsieh, CEO Zappos“Companies are learning that it’s much better to offer customers a place togive direct feedback at their virtual doorstep than to ignore complaints andlet them crop up everywhere” – Reich & Solomon, Media Rules“The goal as a company is to have customer service that is not just the bestbut legendary.”– Sam Walton“But, the thing is, since I always had my own little shop and direct access tothe public, I’ve been able to build up a technique without marketing peopleever telling me what the public wants.” – Vivienne Westwood23
  25. 25. “We see our customers as invited guests to a party, and we are the hosts.It’s our job every day to make every important aspect of the customerexperience a little bit better.” –Jeff Bezos, CEO Amazon.com“Customer service is just a day in, day out ongoing, never ending,unremitting, persevering, compassionate, type of activity.” – Leon Gorman, CEO L.L.BeanCustomer Service Statistics45% young customers abandon a brand because of poor customer service(source: The Mobile Youth Report)66% of customers switched a service because of poor customer service(source: Accenture)71% of youth seek non-traditional avenues to customer service before tryingthe call center (source: The Mobile Youth Report)75% of brand interaction is customer service (source: The Mobile YouthReport)81% of customers consult peers to solve smartphone issues (source: TheMobile Youth Report)Effective peer-to-peer customer service increases acquisition rates (+27%),retention rates (+31%) and overall satisfaction (+33%) (source: The MobileYouth Report)Customer Service Key ConceptsCustomer Experience: The 3 factors that support customer experience aretrust, customer service and earned media. Trust depends on the reliability ofyour product. Customer service is a key touch-point accounting for 75% ofall customer interactions. Earned media is the story customers tell aboutyour brand to each other. Improve the 3 factors of customer experience toincrease word of mouth and loyalty among customers.Peer-to-Peer Customer Service: Bottom-up models of customer servicee.g. peer-to-peer that encourage customers to solve each other’s problems.24
  26. 26. Peer-to-peer customer service turns what is traditionally a cost to thebusiness into a social benefit to the customer.Traditional Customer Service: Top-down models of customer service e.g.call centers that require customers to route through a centralized portal ofinformation to solve their problems/issues.25
  27. 27. InfluenceInfluence Reports• Download Report Preview: Fans• Download Report Preview: Metrics and Youth Marketing• Download Report Preview: Word of Mouth and Subscriber AcquisitionInfluence QuotesFind your Fans, the rest is mere detail – mobileYouthYou can’t buy youth trust attention anymore, you have to earn it –mobileYouth“Historically, our number-one growth driver has been from repeat customersand word of mouth.” – Tony Hsieh, Zappos CEO“We have a lot of social channels that we track on Facebook and Twitter…we know what people that actually left BlackBerry to another platform thinkabout that platform or what they think about the BlackBerry platform. There’sa lot of comments that say, “Hey, I wanna come back.” This is a targetsegment that our marketing approach will specifically go after.” – ThorstenHeins, Blackberry CEO26
  28. 28. “Sell to the sold” – Seth Godin“We take most of the money that we could have spent on paid advertisingand instead put it back into the customer experience. Then we let thecustomers be our marketing.” – Tony Hsieh, Zappos CEO“Do what you do so well that they willwant to see it again and bring their friends.” – Walt Disney“If you do build a great experience, customers tell each other about that.Word of mouth is very powerful.” – Jeff Bezos, Amazon CEO“Turn strangers into friends. Turn friends into donors. And then… do themost important job:Turn your donors into fundraisers.” – Seth Godin“We are in the maturing market and when we talk about smartphones, wehave to know what our segment market is – we have to know who ouraudience is. We cannot be everybody’s darling, if we did, we will beswimming in a school of sharks.” – Thorsten Heins, Blackberry CEOInfluence Statistics83% of youth bought their handsets based on what peers (not what adagencies) said about the brand (source: The Mobile Youth Report)Fans aren’t 2 or 3 times more influential than your average customer, theyare up to 100x more influential than customers (source: The Mobile YouthReport)The average American youth will have seen 120,000 marketing messagesby age 17 (source: Kahnemann)The human brain gates out 95% of all the information it receives at any onetime (source: Graham D Brown)70% of youth feel annoyed after watching an ad and 44% say they areunlikely to buy the product advertised (source: The Mobile Youth Report)Top influencers of youth smartphone purchase decisions are Friends (94%),Siblings(86%), Parents(70%) and Neighbors (57%) (source: The MobileYouth Report)27
  29. 29. Influence Key ConceptsAttention Economy: Youth don’t wake up thinking about your brandanymore. Advertising was born of an era when youth trust and attentionwere abundant. That simply isn’t true anymore.Authenticity: In the post Big-Idea era of marketing, authenticity can nolonger be bought or sold, traded as a commodity by clever advertisingagencies, it must be earned. More importantly, it’s a process that takes time.Agencies cling to the idea of viral video campaigns that can project a boringbrand into the world of youth authenticity overnight thus bypassing thenecessary groundwork and foundations that often takes years if not decadesto create. Perhaps the root of the problem lies in an industry that exists on aquarterly basis, where very little space is given to projects that provide longterm structure and authenticity for a brand, favoring instead short, sharp“hits” that spike youth attention only to die away until the next campaign isresurrected.Awareness: Terms like “awareness”, “top of mind” and “market share” areincreasingly no more than vanity metrics for brands that insist on followingthem. If customers like you, be afraid, be very afraid. Because, in today’sattention economy being liked means being invisible.Beachheads: A market segment of Fans who display a high NPS score foryour product or brand. Sometimes called a “hot spot” when used with brandvisual heatmaps.Content vs Context: The world isn’t as it seems, it’s as we tell it. Physicalform (content) is shaped by meaning (context). Content is the product youput out in the market – what you make for them. We become easily seducedby the world of Content, the product, advertising and design agency spin.Content is the value we see. But context is the only value people feel.Context is the meaning that customers give to your product – what youmake them feel. Consider that word context again. Context: from the latin“con” – to join, and “textere” – to weave fabric. Context is the fabric. Takethe component threads out of the tapestry they are meaningless but as onethey tell a story.Democratization of Media: Every customer asks this of your marketing“where am I in this story?” In the medieval era, storytelling was confined tothose who had money and like manuscripts, advertising has been thepreserve of the elite. We’ve created whole industries around advertising thatserve the interest of these elite patrons. We’re constantly told that28
  30. 30. “customers don’t know” and, therefore, it’s the prerogative of the priesthood(agencies) to tell us what we do really want in our lives. But customers todaydon’t have to wait to be picked, now they’re becoming celebrities andexperts by picking themselves, a move to decentralization that is renderingthe old fashioned ad agency model of marketing useless.Earned Media: Earned media (or free media) refers to favorable publicitygained through promotional efforts other than advertising, as opposed topaid media (PR, advertising, sponsorship etc) (source: Wikipedia). The coreto youth marketing is Earned Media. Fans drive Earned Media and if youwant an army of vocal Fans you need an active Frontline. This completeSystem is measurable through simple metrics like NPS.Fans: key advocates of your brand and its products. It’s Fans thatcustomers listen to when making informed product choices. It’s Fans thatencourage them to switch mobile phones. It’s Fans that give them reasonsto leave a service. It’s Fans that educate them about new products.mobileYouth research found Fans weren’t simply 2 or 3 times moreinfluential than the average customer but up to 100 times more. Whenadvertising agencies try to take brand stories onto Facebook they stillpersist in telling the brand story albeit with a social twist. What they fail torealize is that it’s not who’s telling your story but whose story you’re tellingthat counts. Fans are the new advertising industry. Fans follow people andproducts not brands. The question we should be asking is not “how do weengage the fans?” but “how do we break down the walls that prevent fansfrom engaging us?”Fans vs Customers: If you don’t know who your Fans are, you only havecustomers. Focus on the 10% of the market that influences the remaining90%, the 90% aren’t listening anwyay. Too many brand managers spendtheir professional life trying to get customers to like them when all along theyignored the fans who already loved the brand.Liked vs Loved: If your customers like you, be afraid, be very afraid. Ifyouth “like” you, you might as well be invisible.Net Promoter Score: a customer loyalty metric developed by (and aregistered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. Itwas introduced by Reichheld in his 2003 Harvard Business Review article“One Number You Need to Grow”.NPS can be as low as −100 (everybody isa detractor) or as high as +100 (everybody is a promoter). An NPS that ispositive (i.e., higher than zero) is felt to be good, and an NPS of +50 isexcellent. (source: Wikipedia). A lot of time is wasted by agencies talking29
  31. 31. about the obscure nature of “buzz” and “engagement”. Behind this rhetoriclies a fear that should we be able to measure it, we’ll discover thatadvertising is, in effect, pretty useless at impacting recommendation. If anagency tells you that Earned Media isn’t measurable because they’redragging their feet, go with one that tells you it is possible.Net Promoter Score vs Net Promoter System: What counts today in theyouth market is recommendation. That’s why both Apple and Zappos sharea common facet to their marketing that is rooted in quantifiable metrics tiedto customer recommendation. SatMetrix’s Net Promoter Score is anincreasingly popular metric to measure recommendation levels forcustomers but it’s widely abused. Net Promoter Score is commonly used bycompanies as a customer satisfaction index, in effect treating it as a vanitymetric. Companies like Apple use a Net Promoter System instead, feedingback information from the retail front into the HQ on a daily basis resulting ina faster customer experience improvement cycle and increasing their wordof mouth marketing.Telephones vs Loudspeakers: Social Business is the telephone –connecting people. Social Business doesn’t need to tell everyone its story itsimply provides a tool for people to tell theirs. We pick up the phone and say“You’ll never guess who I just saw at the train station…” Would the phone beuseful if every conversation we have, had to be about the phone company?Of course not, but that’s how creative agencies behave today – finding newways to get us to talk about them. Ad agencies and boring brands are theLoudspeaker – dominating conversations and interrupting people to get theirmessage across, often placating the inconvenience with humor or trying tobe clever.Influence Resources• Can Samsung beat Apple by spending more on advertising?• Change Agents: Author Graham Brown reveals who is the real drivingforce of mobile innovation• The Power of the Outlier: Author Graham Brown discusses why Outsidersare key to innovation30
  32. 32. InnovationInnovation Reports• Download Report Preview: Youth, CoCreation and InnovationInnovation QuotesThe first ever recorded telecoms innovation driven by the youth market wasDengon Dial in Japan – a simple “hack” that turned fixed-line publictelephone message boxes into a youth-driven dating service (more aboutthis in the book “The Mobile Youth by Graham Brown”).The segments quickest to adopt new mobile tech aren’t mainstream execsbut often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US,young female teens in Japan or young black females in South Africa.“Communications tools don’t get socially interesting until they gettechnologically boring.” ― Clay Shirky, Here Comes Everybody: The Powerof Organizing Without Organizations“I’ve seen the demonstrations on the Internet about how you can findanother person using a Zune and give them a song they can play threetimes. It takes forever. By the time you’ve gone through all that, the girl’s gotup and left! You’re much better off to take one of your earbuds out and put it31
  33. 33. in her ear. Then you’re connected with about two feet of headphone cable.”– Steve Jobs“Look at the design of a lot of consumer products — they’re reallycomplicated surfaces. We tried to make something much more holistic andsimple. When you first start off trying to solve a problem, the first solutionsyou come up with are very complex, and most people stop there. But if youkeep going, and live with the problem and peel more layers of the onion off,you can often times arrive at some very elegant and simple solutions. Mostpeople just don’t put in the time or energy to get there. We believe thatcustomers are smart, and want objects which are well thought through.” –Steve Jobs“What are the five products you want to focus on? Get rid of the rest,because they’re dragging you down. They’re turning you into Microsoft.They’re causing you to turn out products that are adequate but not great.” –Steve JobsInnovation Statistics40% of innovations introduced by a manufacturer is in internal processesand 35% of innovation introduced by service firms are in organizationalprocesses. Only 27% of innovations introduced by both contribute tomarketing (source: StatFi)Flip partnered with students to identify pain points and innovate its videocamera. The company went on to grab 20% video market share from Sonyeventually selling its operations for $590 million (source: Cisco)83% of hackathon attendees seeking to demo their innovative products toinvestors are below the age of 35 (source: tokbox)Innovation Key ConceptsCo-Creation: Working with other people to find solutions to existing issuesthat may appear insignificant. We need to move from viewing youth asdestinations for our marketing messages to treating them as partners in itsproduction.Cognitive Surplus: “This linking together in turn lets us tap our cognitivesurplus, the trillion hours a year of free time the educated population of the32
  34. 34. planet has to spend doing things they care about. In the 20th century, thebulk of that time was spent watching television, but our cognitive surplus isso enormous that diverting even a tiny fraction of time from consumption toparticipation can create enormous positive effects.” ― Clay ShirkyCultural Hacking: Customers changing the device or service in innocuousways to make it better or to derive more social benefit from it.Department of Great Ideas: You don’t need a factory to produce a caranymore. If you have a laptop and a connection, you are a factory.Experts vs. Amateurs: Amateur derives from the latin “amare” – to loveand “amator” – lover. When we study how innovation really happens wediscover it to be an informal process, driven by those who are passionateabout innovation rather than those who get paid to do it. Amateur bloggerswho upstage professional journalists in covering breaking news reports area great example. Experts by their very nature are highly trained, a learningprocess that encourages expertise over experience and time in the officerather than the field. Digital has changed innovation irrevocably,empowering every individual to take part in the process. Mobile banking’sfuture (and perhaps the future of the world’s retail banking system) doesn’tcome from a design agency in Munich or San Francisco but a student inKenya.Genchi Genbutsu: What we should be doing is practising what Toyota calls“Genchi Genbutsu” which, in Japanese, means literally “go and see foryourself”. Or, as the West corrupted the phrase, more poignantly “get yourboots on”. An idea that centers on being at the frontline where interactionsare happening.  Applied to youth marketing in mobile, it means a companycan’t outsource its customer insights to agencies.  People in the companyneed to immerse themselves in youth culture. Customer service creates theGemba culture of “getting your boots on”. Managers are “out there”,immersed into the culture and everyday behaviors of their customers.Gemba culture helped Toyota reduce the internal barriers that inhibitedinnovation on the manufacturing floor. Managers wouldn’t sit in comfortableoffices that removed themselves from the outside world, they were active onthe floor or in visiting dealerships. Toyota also built out into the youth marketwith its innovative Scion range by immersing itself into West Coast hip hopculture (as opposed to hiring an agency to make-over their car). Byexposing the company to real world insights, customer service breaks downthe walls and prevents the Kodak phenomenon of isolating yourself from themarket and creating echo chambers.33
  35. 35. Hacker Way: Facebook’s “Hacker Way”, adopted as their internal modusoperandus, teaches that “done is better than perfect”. It’s better to putsomething out there and iteratively evolve the product with user feedbackand interaction than to scheme up finished products, as MySpace did, in thehope of the perfect solution.Innovation is Culture: Innovation is culture not strategy. You can no longerhave an “innovation strategy” or “innovation department”, you simply have aculture that is either inhibitive or conducive to innovation. Within that cultureis a key assumption – that innovation happens on the outside of thecompany walls and, therefore, the role of the company is to break downthese walls and let innovation in. Creating social space for innovation is asimportant as having the right people to make it happen. London had itscoffeehouses, Vienna its salons and the Valley its meetups and sushi bars.W.L.Gore founder of the all-weather Goretex company said that“communication really happens in the carpool,”  where people could feelfree to talk openly without bosses around. 3M engages all its employees,not just the scientists, in its ’15 percent time’ program where they are giventhe freedom to chase any idea they want. The program since its inception in1940s has resulted in 22,800 patents. Google uses a similar ’20% percenttime’ program which gave rise to products like Gmail, Google Earth andGoogle Labs. Getting innovation right means creating the space for whatpeople do naturally – interact. Many organizations fail to improve innovationbecause they try to create fake social situations that people won’t use forregular interaction (like the office slides or the brainstorming rooms).Innovation is Social: Innovation is a social process. Innovation is rarely asingle disruptive step-up. In reality, silk wasn’t “discovered” by dropping thecocoon into hot tea but through many centuries of trial and error undertakenby silk farmers. Secondly, silk wasn’t discovered by one person but bymany. This wasn’t the work of some genius whose stature (emperess) orintellect (Archimedes) is beyond the reach of your average mortal but bymany nameless and uncelebrated individuals. People never “innovate” theysimply interact with one another. If that interaction creates a better way tosend a message, an idea for business or more efficient business process, ithappened between two or more people and in a social context. Zuckerberginvented Facebook because he wanted to meet girls. He wasn’t the mostsocially gifted teen in his peer group. Teens developed SMS because thenetwork charging models built walls rather than bridges in theircommunication. Wherever there is need there is innovation and there isalways a need to connect. Real innovation doesn’t happen when a designagency exec sits in his office and stares out the window at blue sky all day34
  36. 36. long waiting for innovation to happen. By contrast, real innovation is a fuzzy,messy social process that involves many hands and many interactions. Incontrast to the top-down world view of innovation that values expertise andbig ideas, innovation is often nothing more than the constant iteration ofsocial interaction between the experienced.Positive Deviance: The act of cultural hacking en masse by a group ofcustomers who want to overcome a flaw in the product or a barrier thanprevents them connecting with each other is called Positive Deviance (PD).PD drives innovation (e.g. with SMS). Deviance is often used in thepejorative; rule-breakers, rebels and dissidents. But it can also beessentially a positive force for change. What happens when deviance is thedriving force for innovation? What happens when your customers startbreaking the rules in order to produce a better product, a better way ofconnecting with their friends or a better way of being significant? Positivedeviance is a simple solution to a day-to-day often mundane problem.These solutions are often overlooked when using a top-down approach toinnovation. Positive deviance is about solving customer’s problems insteadof the industry’s, and this is why it will win you customers, not awards.Innovation Resources• Can Samsung beat Apple by spending more on advertising?• Change Agents: Author Graham Brown reveals who is the real drivingforce of mobile innovation• The Power of the Outlier: Author Graham Brown discusses why Outsidersare key to innovation35
  37. 37. LoyaltyLoyalty Reports• Download Report Preview: How can Operators Win the Youth Market?• Download Report Preview: Peer to Peer Customer Service and Loyalty• Download Report Preview: Price and Youth LoyaltyLoyalty QuotesRetention is the new acquisition – mobileYouthLoyalty is a mindset not a programme – mobileYouthYouth aren’t loyal to any brand or product, they’re loyal to what that branddoes for them – mobileYouth“They get it home and use it, and the joy is gone. The joy is gone every daythey use it–until they’re not using it anymore! You don’t keep remembering,‘Oh, I got a deal.’ Because you hate it!” – Tim Cook, CEO Apple36
  38. 38. Loyalty Statistics74% of customers reported they participated in brand loyalty programs, only12% said that it paid to be in the program. (source Colloquy)The most loyal customers with top 20% NPS scores, contribute 80% of totalprofits (source: The Mobile Youth Report)60% of youth churn from mobile carrier brands because of unreliablenetwork not rival promotions (23%) (source: The Mobile Youth Report)26% of all customers are thinking about switching brands any given quarter(source: The Mobile Youth Report)51% of youth who churn from mobile brands are influenced by their friendsand family to make the switch (source: The Mobile Youth Report)67% youth say they would not have switched carriers if the issue wasresolved in first contact. Only 44%  say the switch would have beenprevented by a loyalty reward program. (source: The Mobile Youth Report)Loyalty Key ConceptsChurn Rate: (sometimes called attrition rate) in its broadest sense, is ameasure of the number of individuals or items moving out of a collectiveover a specific period of time. It is one of two primary factors that determinethe steady-state level of customers a business will support. The term is usedin many contexts, but is most widely applied in business with respect to acontractual customer base. For instance, it is an important factor for anybusiness with a subscriber-based service model, including mobile telephonenetworks and pay TV operators. (source: Wikipedia)Net Promoter Score: a customer loyalty metric developed by (and aregistered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. Itwas introduced by Reichheld in his 2003 Harvard Business Review article“One Number You Need to Grow”.NPS can be as low as −100 (everybody isa detractor) or as high as +100 (everybody is a promoter). An NPS that ispositive (i.e., higher than zero) is felt to be good, and an NPS of +50 isexcellent. (source: Wikipedia)37
  39. 39. Mobile CustomersMobile Customer Reports• Download Report Preview: Smartphones and Ethnic Youth• Download Report Preview: Smartphones and Teen Social Lives• Download Report Preview: Smartphones and the Female Customer• Download Report Preview: Teens and InstagramMobile Customer Quotes“The next generation grows up thinking ‘well, of course’” – Seth Godin.“The aim of marketing is to know and understand the customer so well theproduct or service fits him and sells itself.” – Peter Drucker“Increasingly, the mass marketing is turning into a mass of niches” – ChrisAnderson, The Long Tail38
  40. 40. Mobile Customer StatisticsYouth spend between 15 and 30% of their disposable income on theirmobile handsets (source: The Mobile Youth Report)61% of youth sleep with their phone (source: The Mobile Youth Report)Given the choice between spending their last $10 on food and spending iton topping up their phone, 71% of youth said they would top up their phone(source: The Mobile Youth Report)77% of mobile carrier decisions and 47% of smartphone purchase decisionsare made by female members of a household (source: The Mobile YouthReport)57% of teenage girls share a new brand they discover with friendscompared to only 47% of teenage boys (source: The Mobile Youth Report)There are 1.6 billion mobile youth in the world today (aged 5-29) (source:The Mobile Youth Report). As a standalone country they’d be bigger thanChina.The segments quickest to adopt new mobile tech aren’t mainstream execsbut often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US,young female teens in Japan or young black females in South Africa.Mobile Customers Key ConceptsAddiction: Adults look at youth interaction with media and take theshortcuts in understanding. They tell us that youth are “addicted” to mobilephones because they can’t live without them. But, what this behavior fails todo is understand what they are addicted to. It isn’t the phone they’readdicted to, it’s what the phone does for them. If anything, youth areaddicted to social interaction. Because, 90% of their interaction with mobilephones is passive, we don’t understand it. Because we don’t understand it,we call it an addiction.Cashless Innovators: Student change agentsChange agents: Customer Beachheads who drive product innovationthrough cultural hacking. In mobile markets, change also comes fromunexpected sources. We’ve long written about change agents in theirvarious guises (Japanese high school girls, women in Indonesia, young39
  41. 41. black females in South Africa etc) being the polar opposite of how theestablished brand and their ad agency would have us think as the mostinnovative users. We are shown ad imagery of middle aged execs in suits(almost always male featuring supporting female) looking powerful andpurposeful as he peers into his mobile phone. Yet, in reality the changeagent is neither middle aged, nor male nor an executive.Digital Natives vs. Offline Immigrants: The believe that youth areaddicted to technology is a myth. Young people appreciate the socialbenefits of technology such as getting to know someone new throughFacebook but prefer to meet them in person to nurture a more meaningfulrelationship. Parents and teachers are key obstacles youth face in furtheringtheir social lives. Youth are more like offline immigrants looking to create aspace for themselves and their friends away from parents and teachers.Disconnected Generation: Youth today grow up without the socialconnectivity their forebears once had. They aren’t allowed to play out untildark, talk to strangers and their lives are significantly more structured. Thismeans they grow up without the social contact they need, turning totechnology to redress the balance.Disruptive Divas: Young female change agents, often ethnic minorities.Upwardly mobile and aspirational. Once a strong Beachhead for Blackberry.Insiders vs Outliers: Change almost always happens from the outside.When industries change, it’s the outsiders that instigate disruption. Whenmarkets change, it’s those customers who exist at the fringes who refuse toplay ball.Interest Economy: It’s interesting how increasingly science and scientistsare becoming sexy, particularly for girls. In the pre-digital era of the PepsiGeneration our role models and identities were defined by the teen flick andthe advert where “nerds” were beaten to a pulp by jocks or publiclyexcoriated by the cool kids. Now, however, we exist in a pluralistic medialandscape where these monolithic definitions of reality are outdated. Today,thanks to the emergence of a many-to-many economy, anyone with a voicecan define what’s sexy and what’s not – and that means anyone. WhenChris Anderson wrote “The Long Tail” he challenged us to rethink long heldnotions of economics. We started reassessing the whole idea of the “big hit”and the “top 10”. The missing link in this story is, however, the people thatmake the Long Tail possible. When we’re offered a Long Tail of options inevery category imaginable – from music to lifestyle – our notions of behaviorand identity will also change. This “Interest Economy” will unite people40
  42. 42. based on passion not geography. We’ve long talked up the digital revolutionas an industry waxing lyrical about new frontiers offered by mobile andFacebook but this isn’t a technology story, it’s a human one.Myth of the Digital Native: The idea of the Digital Native has perhapshelped perpetuate a whole series of ineffective tools and strategies aimed atextending the virtual existence of this generation. Yet, what we’ve missed allalong was the simple truth that their most basic need is to be offline. Youthmay spent a lot of time online but their ultimate drive is to use thesetechnologies to facilitate offline interaction. They text to hook up. They BBMto arrange times and places or exchange gossip about real worldinteractions at school that day. Creating virtual spaces or technologiesdisconnected from the real world is to build castles in the sky; unless thetechnology funnels down to create a better offline world, it’s simply a wasteof time.Offline: According to mobileYouth data, over 50% of youth said theirpreferred form of communication is “face to face”. Even in this digital age,face to face is still key in the recommendation process. Mobile companiestoo often make the mistake of building their technologies in this onlinebubble. If your product doesn’t make their offline life better, you might aswell flush it down the pan because it will survive only as long as you keeppumping it with expensive marketing. Youth aren’t natives who live in theonline world, their existence is very much offline. Sure, they’ll use digitaltools more than their older peers but the end goal of their activity is togenerate offline interaction.Teenage Pirates: Teen change agents. Key to the adoption of newtechnologies like Facebook, Napster, Video and Messaging.Segmentation vs Articulation: Segmentation fulfils a selfish need of thebusiness, articulation helps people tell their story. Articulation encouragesfans to express themselves – hopes, needs, fears, emotions. Articulationseeks to understand the consumer as a social being living an active sociallife influenced by peers and family. Segmentation ignores the social lives ofpeople and views them in isolation.Users vs People: How we view the problem is the problem. If we viewmobile owners as “people” we start considering them in the social context oftheir daily lives – their social needs and their interactions.41
  43. 43. Mobile DataMobile Data Reports• Download Report Preview: Mobile Video• Download Report Preview: Operators, Youth and Music Services• Download Report Preview: Teens and InstagramMobile Data StatisticsMobile devices will account for more than 33% of all global web traffic byend of 2013 (source: The Mobile Youth Report)Smartphone mobile data traffic will grow by 81% annually till 2017accounting for 80% of all mobile data traffic (source: The Mobile YouthReport)49% of youth value their mobile data plans more than pay TV service (43%)and mobile voice plans (35%) (source: The Mobile Youth Report)55% of youth prefer accessing internet on their smartphones using anyavailable wi-fi connection over carrier supplied 3G or 4G connection(source: The Mobile Youth Report)42
  44. 44. 60% of youth access internet on their smartphones to organize a gatheringwith their friends (source: The Mobile Youth Report)Mobile Data Key ConceptsValue Added Services: Non-voice, non-text data services such as socialmedia, video, music and OTT messaging that allow the operators toincrease ARPU.Mobile Data Resources• (New Research) Social Media Best Practices: What can mobile brands doto engage youth on social media?• Are you ready for the Peak SMS world?• Call me on Facebook? Will Facebook’s Network Effect catch the MobileIndustry out?• Is Messaging Facebook and Google’s $1 trillion giveaway?• mobileYouth Feature Sep 2012: The future of messaging• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,WhatsApp and Kik43
  45. 45. Mobile MessagingMobile Messaging Reports• Download Report Preview: Mobile MessagingMobile Messaging Quotes“Around 18 months ago we started noticing that people were using moreSkype, people were using Viber and What’s App and our SMS revenuesstarted going down. So we asked them why and it was a very simpleanswer. It was because it was free, so we decided to turn the model upsidedown.” – Vittorio Colao, CEO VodafoneMobile Messaging StatisticsMobile operators lost $23 bn in 2012 due to the rise of mobile messagingapps (source: The Mobile Youth Report)Global mobile messaging app traffic will surpass global SMS traffic in 2014(source: The Mobile Youth Report)91% of young smartphone owners still rate SMS as their top messengerchoice (source: The Mobile Youth Report)44
  46. 46. 80% of youth say they use messenger apps with SMS, instead of replacingSMS (source: The Mobile Youth Report)Messaging app penetration is highest among teenage girls (40%) followedby teenage boys (30%) (source: The Mobile Youth Report)Mobile Messaging Key ConceptsActive vs Passive Communication: 90% of communication is passive.Just because we don’t see it or it doesn’t appear obvious doesn’t mean thatit’s meaningless. Much of our social meaning is communicated throughmundane behaviors. Think of it as ape-like grooming, where we sit around inlarge groups doing nothing particularly constructive or measurable exceptreinforce these peer group relationships. When parents walk into the backroom and see their teen children “hanging out” with friends they are oftenperplexed by how unproductive this behavior is. They just sit there, hangingaround listening to music. They don’t even seem to be saying much.“Hanging out” behavior is passive communication manifested on a globalbasis and it continues to trouble adults who fail to see its social purpose.Mobile Messaging Resources• Are you ready for the Peak SMS world?• Call me on Facebook? Will Facebook’s Network Effect catch the MobileIndustry out?• Is Messaging Facebook and Google’s $1 trillion giveaway?• mobileYouth Feature Sep 2012: The future of messaging• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,WhatsApp and Kik45
  47. 47. Mobile MusicMobile Music Reports• Download Report Preview: Operators, Youth and Music ServicesMobile Music Statistics44% of youth multitask while listening to music on their mobile phones whenalone (source: The Mobile Youth Report)Youth spend 30 minutes a day listening to music on their mobile comparedto 24 minutes browsing the web and 17 minutes playing mobile games(source: The Mobile Youth Report)Mobile music revenues from streaming and download services will accountfor more than 50% of mobile music revenues in 2013, ahead of ringtonesand ringback tones (source: The Mobile Youth Report)31% of 21-24 year old youth prefer to download music directly on theirmobile  compared to 21% who prefer to download it to their PC (source: TheMobile Youth Report)32% youth have paid for a music app while 18% have downloaded  freemusic apps (source: The Mobile Youth Report)46
  48. 48. Mobile Music Key ConceptsSocial Tools: People don’t buy stuff, they buy what stuff does for them. Themobile phone is a powerful social tool but not the only one available. Peoplewill always weigh up the value of a social tool in comparison to otheravailable options (e.g. clothes, cigarettes, music, entertainment)47
  49. 49. Mobile PaymentsMobile Payment Reports• Download Report Preview: Youth and Mobile Payments• Download Report Preview: Youth and Mobile ShoppingMobile Payment Quotes“We hung out with them at malls, ate dinner with them, went shopping andclubbing with them and spent a lot of time looking in their wallets and talkingabout money.” – David McQuille, Group Customer Experience at OCBCBank, on creating the bank’s youth brand, FRANKMobile Payment StatisticsMobile payments industry will amount to a trillion dollars by 2020 (source:The Mobile Youth Report)42% of smartphone owners haven’t used a mobile payment method due tosecurity concerns (source: The Mobile Youth Report)48
  50. 50. 88% of youth want better security in mobile payment methods but 81% ofservice providers push convenience as the key marketing message (source:The Mobile Youth Report)74% youth trust PayPal to provide a the best mobile payment servicefollowed by Amazon (72%) (source: The Mobile Youth Report)54% youth would use a trustworthy mobile payment service during socialoccasions such as going out to a cafe with friends (source: The MobileYouth Report)Mobile Payment Key ConceptsExperts vs. Amateurs: Amateur derives from the latin “amare” – to loveand “amator” – lover. When we study how innovation really happens wediscover it to be an informal process, driven by those who are passionateabout innovation rather than those who get paid to do it. Amateur bloggerswho upstage professiona journalists in covering breaking news reports are agreat example. Experts by their very nature are highly trained, a learningprocess that encourages expertise over experience and time in the officerather than the field. Digital has changed innovation irrevocably,empowering every individual to take part in the process. Mobile banking’sfuture (and perhaps the future of the world’s retail banking system) doesn’tcome from a design agency in Munich or San Francisco but a student inKenya.49
  51. 51. Mobile VideoMobile Video Reports• Download Report Preview: Mobile VideoMobile Video StatisticsMobile video will account for more than 50% of overall mobile internet traffic in 2016 (source: The Mobile Youth Report)41% of youth aged 18-24 prefer watching short video content on mobiledevice over their PC (33%) (source: The Mobile Youth Report)More than 50% of video watched on mobile is less than 10 minutes in length(source: The Mobile Youth Report)14% of youth watch a video review of a product in their smartphones whileshopping inside a retail store (source: The Mobile Youth Report)62% of youth engage in mobile video chat sessions with peers during latenight hours (source: The Mobile Youth Report)77% youth use Oovoo as their primary mobile video chat app followed byTango (62%) (source: The Mobile Youth Report)50
  52. 52. Mobile Video Key ConceptsConvergence vs Divergence: The industry vision of a singular convergedtechnology or device is becoming a pipe-dream. Youth are opting for adiverged future. Take the mobile phone as an example – one mobile phonebut up to seven social tools. Youth will use different apps e.g. SMS, email,BBM, Kik, Skype and texting in parallel to achieve different social objectives.Cool vs Mundane: Technology becomes socially relevant when it ismundane, not cool. People are yet to find a socially relevant use for thelatest smartphone features. Mundane features like SMS, however, are keytools that enable people’s social lives. 90% of smartphone owners rate SMSas the key messaging app despite availability of ‘cooler’ apps like WhatsAppand Facebook Messenger.Early Adopters vs Change Agents: The drivers of emerging technologieslike mobile video aren’t business users conferencing with each other butteens in their bedrooms using services like ooVoo and young immigrants.With respect to the latter, it’s the Hispanics in South West USA who are thehungriest for new mobile services, not established white communities up theAtlantic coast.51
  53. 53. Operator StrategiesMobile Operator Reports• Download Report Preview: How can Operators Win the Youth Market?• Download Report Preview: Prepaid Market Overview• Download Report Preview: Price and Youth Loyalty• Download Report Preview: Youth MVNOs and sub brandsMobile Operator Quotes“If you wait until there is another case study in your industry, you will be toolate” – Seth GodinMobile Operator Statistics6 out of 7 billion people in the world have access to a mobile phone but only30% have access to a bank account (source: The Mobile Youth Report)40% of youth switch mobile operators because of poor customer service,not lower prices from competitors (source: The Mobile Youth Report)52
  54. 54. Operators are missing out on 35% of youth mobile expenditure emergingfrom new services such as music, games, video and other mobile apps(source: The Mobile Youth Report)21% of youth said that hidden fees and unexplained costs were their biggestconcerns with mobile operators (source: The Mobile Youth Report)56% of youth believe good mobile experience depends on customer careand network quality (source: The Mobile Youth Report)Mobile Operator Resources• Are you ready for the Peak SMS world?• BlackBerry growth depends on youth• Call me on Facebook? Will Facebook’s Network Effect catch the MobileIndustry out?• Is Messaging Facebook and Google’s $1 trillion giveaway?• mobileYouth Feature Sep 2012: The future of messaging• Why should Samsung focus on youth now?• Youth lead high-end smartphone market but operators need to change totake advantage of this opportunity• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,WhatsApp and Kik53
  55. 55. PrepaidPrepaid Reports• Download Report Preview: Prepaid Market Overview• Download Report Preview: Price and Youth Loyalty• Download Report Preview: Youth MVNOs and sub brandsPrepaid StatisticsPrepaid subscriptions dominate emerging markets of Africa (96%),  Asia(85%) and Latin America (66%) (source: The Mobile Youth Report)91% of smartphone growth in 2012 came from prepaid subscribers (source:The Mobile Youth Report)Youth on prepaid accounts stay with a carrier for an average of 22 months –similar time period as a post-paid connection (source: The Mobile YouthReport)65% youth prefer prepaid connections because they believe it’s a fairrelationship between the brand and customer (source: The Mobile YouthReport)54
  56. 56. Youth on prepaid accounts spent most of their time browsing the internet (25min per day), checking social networks(17 min per day) and using instantmessenger apps (16 min per day) (source: The Mobile Youth Report)55
  57. 57. PricingPricing Reports• Download Report Preview: Prepaid Market Overview• Download Report Preview: Price and Handset Purchase Decisions• Download Report Preview: Price and Youth LoyaltyPricing StatisticsYouth prioritize safety features like warranty (78%) and durability (66%) overprice (42%) when making a smartphone purchase decision (source: TheMobile Youth Report)56% of marketers believe youth abandon brands because of cheaperoptions from rival brands but only 29% of youth agree that they haveabandoned a brand due to cheaper prices elsewhere (source: The MobileYouth Report)96% youth say price is a key determinant of purchase decision when buyinga secondary handset i.e. a feature phone that acts as a backup for theprimary smartphone (source: The Mobile Youth Report)56
  58. 58. Youth spend 36% of their monthly budget on mobile and weight increasingmobile expenses against social experiences like going to a restaurant withfriends (20%) and shopping with friends (32%) (source: The Mobile YouthReport)Operators like Safaricom in Kenya and Verizon Wireless in the US havehistorically had lower churn compared to rival carriers despite higher prices(source: The Mobile Youth Report)57
  59. 59. RetailRetail Reports• Download Report Preview: Youth and Mobile Payments• Download Report Preview: Youth and Mobile Shopping• Download Report Preview: Youth and Retail for Mobile BrandsRetail Quotes“We want interactions with Optus to exceed expectations and the feedback,both good and bad, from our pilot stores will be invaluable in helping usshape the experience for the rest of the transformation” – Rohan Ganeson,MD of retail sales at Optus“I worked for Apple Retail for a couple of years in college. During my timethere they had implemented the net promoter system, and I truly loved it.Unfortunately I can’t give an NPS opinion from a management perspective,but from an employee’s perspective, it helped motivate me to do my bestevery day because anyone could be a detractor. It was also great when,during meetings, our management team compiled the NPS feedback andwe got to hear verbatim what our customers thought of our service.” CatKobe – ex Apple Genius employee58
  60. 60. “Our mission was to build a place to enrich the lives of customers…a placeto gather, to learn and to experience” – Ron Johnson, founder Apple Retail“Every sofa, bus, train is a shop front as people are looking at their phones.”– Andrew Harrison, CEO Carphone Warehouse“But, the thing is, since I always had my own little shop and direct access tothe public, I’ve been able to build up a technique without marketing peopleever telling me what the public wants.” – Vivienne Westwood“Led by mobile, a commerce revolution is under way. Technology is creatinga new web-enabled retail interface, a new seamless, multiscreen commerceexperience that connects consumers anytime, anywhere. This will expandshopping beyond conventional store environments and e-commerce sites.How we shop is being transformed, and eBay Inc. intends to be a leader inthis new commerce world.” – John Donahoe, eBay President and CEO“People shop and learn in a whole new way compared to just a few yearsago, so marketers need to adapt or risk extinction” – Brian Halligan, AuthorInbound MarketingRetail StatisticsYouth spend more than $50 per trip on average compared to adults whospend $30 or more (source: The Mobile Youth Report)73% of young women call a friend from the store to ask for their opinionwhile 58% of men search the web on their smartphones for more info(source: The Mobile Youth Report)58% youth prefer to shop in a physical retail store compared to 45% whoprefer online stores (source: The Mobile Youth Report)76% of youth engaged in showrooming i.e. they visited a store to ‘look’ and‘try’ products before buying them online (source: The Mobile Youth Report)46% of youth use their smartphones while in a retail store to call peers froadvice followed by looking for product reviews (28%) (source: The MobileYouth Report)59
  61. 61. Retail Key ConceptsFrontline: The point at which the customer interacts with the brand (oftenretail). There are many forms of a Frontline: retail, events or onlinecommunities. Frontlines are a key part of a successful youth marketingstrategy today because it’s at the Frontline where the brand touches thedaily lives of customers and fans. 75% of customer interaction happensthrough customer service. That means the majority of branding occursoutside of what the creative agency does. For Apple, their Frontline is theirretail stores. In 2001, Apple spent 5% of their revenues on advertising.Today they spend just under 1%. Why? Their Frontline is a far moreeffective brand builder than advertising could ever be. Apple’s Frontline is akey composite of their success story. When people talk about the Applesuccess story many cite Steve Jobs’ genius or “design thinking” but thesefactors are icing on the cake of a more robust system built around theirFrontline. Of Apple’s 43,000 employees in the US, 30,000 work for Appleretail.Showrooming: Customers using the retail store to try out products beforebuying online (often with a different retailer e.g. Amazon)Retail Resources• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience60
  62. 62. SamsungSamsung Reports• Download Report Preview: Generation Tablet• Download Report Preview: Handset Brands and the Youth Market• Download Report Preview: How can Samsung beat Apple?• Download Report Preview: The 15 Brands That Will Define Mobile in 2013Samsung Quotes“For each of us, life is a journey. What you want is a device that can help uson the journey.” – JK Shin, Samsung CEOSamsung StatisticsSamsung took over Nokia and Apple as the industry leader with 33% ofglobal smartphone market share (source: The Mobile Youth Report)89% of prospective smartphone buyers intend to purchase a SamsungGalaxy smartphone because they view it as an affordable alternative to theiPhone (source: The Mobile Youth Report)61
  63. 63. 34% of current Samsung smartphone owners intend to stick with Galaxysmartphone when its time to upgrade (source: The Mobile Youth Report)Samsung is the #1 electronic brand when youth think about buying gadgetsfor themselves but falls to #3 behind Apple and Sony when it comes torecommending brands to friends (source: The Mobile Youth Report)Samsung Resources• 5 ways to build a better smartphone experience (without changing thehandset)• BlackBerry growth depends on youth• Can Samsung beat Apple by spending more on advertising?• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience• The Top 3 Reasons Why Youth Buy Samsung (and why these are notenough to beat Apple)• What are Social Tools? Author Graham Brown shares a new way to lookat mobile phones• Why should Samsung focus on youth now?• Youth lead high-end smartphone market but operators need to change totake advantage of this opportunity62
  64. 64. SmartphonesSmartphone Reports• Download Report Preview: Handset Brands and the Youth Market• Download Report Preview: Price and Handset Purchase Decisions• Download Report Preview: Who or What influences youth purchase?• Download Report Preview: Winning the Hearts and Minds of YoungCustomersOverviewMobile is the largest spending category for the 2 billion young mobileowners around the world. Some brands focus directly on the youth marketwith a hope that their young customers will stick with them in adulthood.Other brands take an indirect approach and establish themselves asaspirational brands for young consumers.What approach should brands take to capture the youth market? What doesthe latest research tell us about the young consumer market? What role domobile phones play in the social lives of youth? How do teens, ethnic youthand young females influence the market as a whole?63
  65. 65. Smartphone Quotes“Smartphones are reinventing the connection between companies and theircustomers” – Rich Miner, Co-Founder Android“Think about your device. Battery life is a challenge for most people. Youshouldn’t need to carry around a charger to make it through the day. If yourkid spills their drink on your tablet, the screen shouldn’t die. And when youdrop your phone, it shouldn’t shatter.” – Larry Page (Google CEO)“Simple can be harder than complex: You have to work hard to get yourthinking clean to make it simple. But it’s worth it in the end because onceyou get there, you can move mountains.” – Steve Jobs (Apple CEO)“Communications tools don’t get socially interesting until they gettechnologically boring.” ― Clay Shirky, Here Comes Everybody: The Powerof Organizing Without Organizations“For each of us, life is a journey. What you want is a device that can help uson the journey,” JK Shin, Samsung CEO“LG is continuously innovating to offer creative ways to offer a userexperience that adds value to our customers. It’s the positive UX that willdifferentiate smartphones in 2013 and beyond, not only cutting-edgehardware specs.” – Jong-seok Park, President and CEO of LG ElectronicsMobile CommunicationsSmartphone Statistics83% of youth bought their handsets based on what peers (not what adagencies) said about the brand (source: The Mobile Youth Report)Youth spend between 15 and 30% of their disposable income on theirmobile handsets (source: The Mobile Youth Report)61% of youth sleep with their phone (source: The Mobile Youth Report)Given the choice between spending their last $10 on food and spending iton topping up their phone, 71% of youth said they would top up their phone(source: The Mobile Youth Report)64
  66. 66. Smartphone Key ConceptsBring Your Own Device (BYOD): Key trend in the enterprise market.Employers allowing employees to bring their own smartphones to workrather than bulk buy corporate devices. The shift is opening the door fordevices like Samsung and Apple while at the same time squeezing outBlackberry as younger employees introduce these new brands into theworkplace.Form Factor: Unique size and shape of a component or device (such as acircuit board, disk drive, or power supply of a computer) that determines itsfit (physical compatibility) or interchangeability with other components ordevices of a system. (source Business Dictionary)Hard Factors: Physical elements of the product experience that cannot bechanged by marketing (the content) e.g. design, form factor, tariffs.Pink Phone Syndrome: We spend most of our lives thinking about theopposite sex but we truly understand little about their mechanics orcomplexities. It amazes me that the best design agencies can do whenconsidering these vast oceans of misunderstanding the best the can comeup with is the pink phone. If we look at the data we start to understand whythe creative industry is so poor at understanding the needs of femalecustomers: only 3% of the advertising industry’s creative directors arewomen. Only 1 of the last 85 winners of Best Director at the AcademyAwards was a woman.Smartphone: A smartphone is a mobile phone built on a mobile operatingsystem, with more advanced computing capability connectivity than afeature phone (source: Wikipedia)Soft Factors: The non-physical elements of experience that are dependenton marketing e.g. earned media, trust. 90% of brand is shaped by softfactors.Total Cost of Ownership: The complete cost of owning a device orsubscribing to a service factoring in all the monetary and non-monetarycosts after the sale. For example, buying an expensive charger for thephone increases the TCO. Downloading software updates although freemay also increase the TCO because they require effort and energy on thecustomer’s behalf.65
  67. 67. Smartphone Resources• 5 ways to build a better smartphone experience (without changing thehandset)• BlackBerry growth depends on youth• Can Samsung beat Apple by spending more on advertising?• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience• The Top 3 Reasons Why Youth Buy Samsung (and why these are notenough to beat Apple)• What are Social Tools? Author Graham Brown shares a new way to lookat mobile phones• Why should Samsung focus on youth now?• Youth lead high-end smartphone market but operators need to change totake advantage of this opportunity66
  68. 68. Social MediaSocial Media Reports• Download Report Preview: Smartphones and Teen Social Lives• Download Report Preview: Social Media for Mobile Brands• Download Report Preview: Social Media, Advertising and Influence• Download Report Preview: Teens and InstagramSocial Media Quotes“It’s a strange business model at present where telcos invest huge amountsof money to upgrade data networks and players like YouTube, who gets therevenue, don’t pay anything.” – Marten Pieters, Vodafone India CEO“You don’t need to control the conversation to reap the benefits” – HenryJenkins“For a truly effective social campaign, a brand needs to embrace the firstprinciples of marketing, which involves brand definition and consistentstorytelling.” – Simon Mainwaring“Cooperating creates group identity.” ― Clay Shirky, Here ComesEverybody: The Power of Organizing Without Organizations67
  69. 69. “People share, read and generally engage more with any type of contentwhen it’s surfaced through friends & people they know and trust” – MalorieLucich, Facebook“We are in a world where most American citizens over the age of 12 sharethings with each other online.” – Clay Shirky“The key is to produce something that both pulls people together and givesthem something to do” – Henry Jenkins“This linking together in turn lets us tap our cognitive surplus, the trillionhours a year of free time the educated population of the planet has to spenddoing things they care about. In the 20th century, the bulk of that time wasspent watching television, but our cognitive surplus is so enormous thatdiverting even a tiny fraction of time from consumption to participation cancreate enormous positive effects.” ― Clay ShirkySocial Media Statistics47% youth follow brands on social media because the brand organizesevents that youth want to attend. Only 13% of young social media followersown the brand’s product. (source: The Mobile Youth Report)67% youth interact with posts from friends compared to 42% who interactwith promotion posts from brands (source: The Mobile Youth Report)Youth are more likely to interact with strangers on social media who sharecommon interests (33%) than brands (27%) (source: The Mobile YouthReport)50% of youth seek out brands on social media because they want aresponse about an issue they have (source: The Mobile Youth Report)41% of youth trust a brand based on positive online reviews on social mediawhile only 25% of youth say that the number of ‘likes’ is key to building trust(source: The Mobile Youth Report)Social Media Key ConceptsAll Media is Social: When experts talk of the changing media landscape,they often point to a transition from “traditional” media (TV, print etc) to“social media” (Facebook, Twitter etc) but this terminology is misleading. All68
  70. 70. media is social. Media (meaning “inbetween”) exists to provide a channelbetween people. What is now known as “traditional” media was “social”media back in 1989. “Social media”, as a term, is misleading because itinfers there is “social” and “unsocial” media, the latter being everything thatcame before Facebook. If we accept there is an “unsocial” media we also letevery media owner and advertiser off the hook for allowing their storytellingto become ineffective; there always have been “conversations”, don’t justassume it’s something the “social media” guys should be doing.Brand Democracy: Customers are the brand. It’s not who’s telling yourstory but whose story you’re tellingMany to Many: Customers today have the tools to perform the functionsbusiness used to have control over, so why stand in their way? Not only arethey more motivated, they have more experience of your product and work24/7. When we insist on interfering with ad agencies, design agencies andcall centers we turn these functions from being a social benefit into a costcenter. We then set about outsourcing and reducing their scope in the nameof efficiency and cost reduction. Telephony is a Many-to-Many technology.Content is neither controlled nor created. By virtue of being the platform, theprovider only has to make sure the tools are working rather than constantlyhaving to invest in creating new and engaging content for people to payattention to.Sharing: What people share today on Facebook is little different than whatthey shared in the days before social media. Same behaviors, differenttools. In fact, it’s nothing new. Back then we used photo albums and verbalgossip. Now, we’re simply bringing it into the 21st century. In a world ofscarcity, we are driven to horde. In a world of abundance, however, we aredriven to share. If your neighbor drove to your office every day, you aremore likely to pool your transport. If everyone knew everyone else’smovements, the lanes of the Californian highways would see significantlyless traffic. They’d have to have 2 carpool lanes and less for the singledrivers.Social Media Resources• (New Research) Social Media Best Practices: What can mobile brands doto engage youth on social media?• Call me on Facebook? Will Facebook’s Network Effect catch the MobileIndustry out?69
  71. 71. TabletsTablets Reports• Download Report Preview: Generation TabletTablets Quotes“Tablets will be the mother of all markets” – Tim Cook, CEO Apple“We sell the hardware at our cost, so it is break-even on the hardware. Wewant to make money when people use our devices, not when people buyour devices.What we find is that when people buy a Kindle they read fourtimes as much as they did before they bought the Kindle. But they don’t stopbuying paper books. Kindle owners read four times as much, but theycontinue to buy both types of books” – Jeff Bezos, CEO AmazonTablets StatisticsGlobal tablets shipment will exceed 350 million by 2017 (source: The MobileYouth Report)26% of people own and use PC, tablets and smartphones together insteadof replacing one with another (source: The Mobile Youth Report)70
  72. 72. Tablet app revenues ($48 bn) will surpass smartphone app revenues ($44bn) in 2018 (source: The Mobile Youth Report)76% of parents say that children under 18 are the designated primary usersof tablets in the family (source: The Mobile Youth Report)More than 1 in 10 children under the age of 4 has regular access to a tablet(source: The Mobile Youth Report)71
  73. 73. TrustTrust Reports• Download Report Preview: Customer Service is Youth Marketing• Download Report Preview: Metrics and Youth Marketing• Download Report Preview: Who or What influences youth purchase?Trust Quotes“Trust, once eroded, is very hard to restore.” ― Dan Ariely, PredictablyIrrational: The Hidden Forces That Shape Our DecisionsTrust Statistics90% youth trust peer recommendation over all forms of online andtraditional advertising (source: The Mobile Youth Report)65% people believe trust in a brand emerging from the product’s reliability/durability shapes customer experience above all other product features(source: The Mobile Youth Report)72
  74. 74. Trust Key ConceptsTrust: You can’t scale trust, attention and love. All the things that factoriesthought of once as scarce are now abundant.Trust Resources• The Top 3 Reasons Why Youth Buy Samsung (and why these are notenough to beat Apple)73
  75. 75. Youth BrandingYouth Brand Reports• Download Report Preview: Social Media for Mobile Brands• Download Report Preview: Social Media, Advertising and Influence• Download Report Preview: Youth MVNOs and sub brands• Download Report Preview: Youth, CoCreation and InnovationYouth Brand Quotes“Your culture is your brand” – Tony Hsieh, CEO Zappos“For a truly effective social campaign, a brand needs to embrace the firstprinciples of marketing, which involves brand definition and consistentstorytelling.” – Simon Mainwaring“Youth don’t wake up thinking about your brand anymore, get over it” –Graham D Brown74
  76. 76. Youth Brand Statistics50% of youth recommend a brand because they have had a positiveexperience with the brand (source: The Mobile Youth Report)On average 20% of youth say that brand is important when making asmartphone purchase decision while 50% say it’s not an important factor(source: The Mobile Youth Report)63% of smartphone owners believe that satisfaction with a smartphonebrand depends on device quality and support (source: The Mobile YouthReport)88% of all positive recommendation for a brand are generated by Fans whomake up 10% of the brand’s customers (source: The Mobile Youth Report)Youth Brand Key ConceptsMVNO: A mobile virtual network operator (MVNO) (or mobile other licensedoperator (MOLO) in the United Kingdom) is a wireless communicationsservices provider that does not own the radio spectrum or wireless networkinfrastructure over which the MVNO provides services to its customers. AnMVNO enters into a business agreement with a mobile network operator toobtain bulk access to network services at wholesale rates, then sets retailprices independently. An MVNO may use its own customer service andbilling support systems, marketing and sales personnel or it may employ theservices of a Mobile Virtual Network Enabler (MVNE) (source: Wikipedia)Storytelling: The first hand prints of the young paleolithic girl found a cavewall from over 10,000 years ago are no different from your 2 year olddaughter’s hand prints in paint at kindergarten. Our basic need to tellstories, and the Social Code that compels it, is as old as human history itselfand reflected in these 1000 year old scraps of parchment. While the SocialCode remains timeless, what has changed is the canvas on which we tellthese stories. We tell stories to make sense of the world, its tools andproducts. Products are valued not by their parts and components, they arevalued by the stories people tell about them. Marketing is about delivering acustomer experience that is consistent with the brand promise.Youth vs Youthful: the difference between what you say and what you doabout your brand. For example, advertising may promote a Youth brand75
  77. 77. where a Youthful brand (like Apple) appeals to youth without being overtlyyoung by promoting a positive customer experience.76
  78. 78. Download thishandbook for free!Go tohttp://www.mobileYouth.organd sign up to our newsletter

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