Monday, May 07, 2007

Enough About LTV: Let's Talk Mobile

One final thought on last week’s string regarding LTV vs. product-based metrics. The precise relationship between LTV and conventional measures such as profit and cash flow is this: profit and cash flows are constraints, while LTV is what you optimize.

Now that we’ve cleared that up, I’d like to point out that today’s New York Times has not one but two articles on mobile marketing. One is on the front page of the business section (“Hollywood Loves the Tiny Screen. Advertisers Don’t.”, The New York Times, May 7, 2007, Business Day, page C1) and the other is inside (“Cellphones Tailored for Any Organization”, The New York Times, May 7, 2007, Business Day, page c7). This follows a piece last month in BusinessWeek (“The Sell-Phone Revolution”, BusinessWeek, April 23, 2007).

The BusinessWeek piece was still in the “gee-whiz, they can do ads on mobile phones” stage of thinking. The two Times pieces were a little more evolved, addressing the business challenges in mobile content and the idea of private-label cell phones for affinity groups or businesses (being offered by Sonopia).

I could note here that the private-label cell phone concept is yet another example of monetizing a customer relationship: in this case, by getting a consumer to commit to carrying your own cell phone, which then gives you a channel to beam them messages—your own and other people’s. But I think I just talked about that last week, and wouldn’t want to repeat myself (unless the topic is LTV. Have I mentioned that lately?)

So let me make another observation: the idea of private-label cell phones leads to the idea of people having more than one. The Times article mentions companies giving their phones to employees; this might easily be extended to favored customers and suppliers. I’m not sure there’s much business sense in this, although of course companies do already often provide non-branded phones to employees as regular business tools. But if some sort of revenue base evolves that makes it profitable for groups to offer phones to consumers for next to nothing, I can certainly see consumers carrying multiple phones in the same way they carry multiple credit cards.

In fact, I rather like the concept because it will break the emerging notion that cell phones are identical with their owners: each person has one phone and each phone has one person. This is almost true today but will probably be less true in the future. So it’s good for marketers to think ahead about how they’ll deal with many-to-many relationships.

No comments: