Regular readers of MobHappy will know that back in the dawn of mobile marketing pre-history, I was involved in a venture-backed start-up called ZagMe. We ran a location based marketing service where opt-in users received sms coupons when they went to the mall.
ZagMe failed for reasons extraneous to the business model and success of the service, though there’s no doubt that we were far too early for all kinds of reasons. If you want to find out more, email me using the link on the right and ask for a copy of my White Paper - free, as it’s you.
I mention this because one of the conundrums we faced was coupon delivery. sms is expensive to deliver, which precludes many impulse-based brands from using it. As an example, if you send a message costing 10p to deliver and you get 10% response, you need to sell something with a £1 margin, just to break even. Clearly the stats get worse if response rates are lower.
A further issue we faced that our 85,000 users were double opt-in. They registered as users in the first instance, but then had to sms us when they arrived at the shopping mall. This was partly as better technology simply wasn’t available, but partly as we felt that an automatic trigger would be intrusive. Supposing if you didn’t want to hear from us that day?
As a result, only about 30% of the users went on to use ZagMe more than once, despite rave feedback in focus groups. The fact is that many forgot about us, forgot how to use us, were just too lazy or most likely - ZagMe just wasn’t important enough to be worth the hassle.
So I was very interested to read about Cellfire’s approach to this very similar problem. How do you take the best of push-based marketing, while retaining the user-controlled, non-intrusive nature of pull?
Many people have tried wap-based approaches, but this tends to fail for the same reasons as ZagMe - people forget to use it. So is there a better way?
Cellfire is a couponing service that cleverly uses an application downloaded onto the phone and thus acts as a permanent reminder that the service is there. Users simply fire up the app and can see all the latest offers from Cellfire advertisers.
And as the app is topped up over the air with new offers, the cost of delivery is free, meaning it can be used by many more brands.
Very neat.
Of course, while Cellfire has solved one of the key issues in a mobile marketing channel, many more challenges still need to be faced and conquered. Not the least of these are getting users to sign up, download and install the application in the first place, persuading advertisers to pay them to distribute coupons and getting those advertisers’ staff to know what’s going on when someone wonders into a shop flashing their phone hopefully. However, I feel that the big advantage Cellfire has is that their timing is right and that’ll help them overcome many of the issues they’ll face as a business.
They’ve already signed up some big brands to trial the advertising channel, so it looks like they’re on their way. Definitely one to watch.
Russell,
Thanks very much for your time in looking at Cellfire. We are very excited about the prospect of delivering great deals at great retailers to consumers. When we originally built Cellfire, we were very adamant about two things: 1. We wanted it to be as non-intrusive as possible, which is why we chose to build an application; 2. We wanted it to be free–since we’re helping people save money, we figured we’d do our best to keep their phone bills low as well.
The unique FlexGUI technology we built allows the application to do just that. We’ve got some great retailers on board, with more to come.
Really appreciate your insight and expertise.
Best,
Brent
This is cool, but i’m wondering how the costs really stack up against an SMS approach. If the app downloads coupons from a server, then it must use data bandwidth, and most users aren’t on unlimitted usage data plans yet. How much does it cost to receive a single coupon? A few cents? If the app downloads a dozen coupons for you to browse, from which you might be interested in one or two, then how much are you paying for that coupon? How does this compare against receiving a single SMS per coupon? I wonder how many users really understand these costs, and I wonder how much that will affect adoption rates. Don’t get me wrong, though. I still think it’s cool.
I will start with same sentences as Andy, this service is great and don’t get me wrong but someone need to specify data charges. Brent and company is doing good job on bringing youth oriented coupons but do they differentiate themselves from other available coupons in market. I don’t know since I don’t live in California, I am not sure of their service but I do know about one eg. Hollywood video coupon they offer is offered on lot of websites. Still I need pay data charges to download that is not fair.
Hope as they made a fast progress on developing application and getting venture money, they will also move faster on other fronts.
Andy, Kedar, hi, just wanted to answer some of your questions. We do not charge consumers anything to download or update their coupons. The question is whether you have a data package or pay for data as used. If you have a data package, it will be free. If you don’t have a data package, when you use the “Update Coupons” feature, it will cost you around 3 to 4 cents. You can get multiple coupons from updating once, so it’s far less than a penny per coupon. We specifically wrote our network language to minimize charges for users.
Thanks,
Brent
Cellfire seems cool, But I don’t use it very often any more, What would be great is if I could actually make a purchase from the phone.
From the Cellfire site:
Will the cashier accept my Cellfire coupon?
All the cashiers have been trained on how to accept Cellfire coupons and will be pleased to do so!
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This reminds me of Moblil Lime’s model. A huge problem is making mobile coupons redeemable like they are a regular paper coupon. I don’t think it’s realistic to expect cashiers to recognize a cellfire coupon. It’s just not possible to keep up the level of training. Also, the entire system must be passive (getting people to download an app to the phone is tough too) and work with existing infrastructure without special training for employees or the consumer. Showing a cellfire coupon to an employee will ensure that the transaction will take longer than normal, a.k.a the melted ice cream/screaming kid phenomenon.