Alternative payment types – More than just a cultural choice.

Piggy Bank - Alternative Forms

As companies move more aggressively into new global markets, there is a natural progression to think about alternative payment types to help improve conversion rates and customer satisfaction.  I’m not talking about PayPal, but rather bank-based payment options that are often considered the “preferred” payment method in countries from Germany to India to Brazil.  This includes direct debit, wires (electronic funds transfer) or real-time bank transfers.

Many of these markets have traditionally been cash-based societies, and as more commerce has moved online, the primary mode of payment has not shifted all the way to credit.  When we say that certain payment types are “preferred”, I think it gives the improper connotation that individuals in these countries would rather not use credit cards because of a “cultural choice”.  While the US is undoubtedly a credit driven society, it is important to note that the use of alternative bank payment options in these other markets is primarily driven by a less evolved credit and risk ecosystem rather than an aversion to credit.

Low credit limits – A credit card is really just a short term loan.  Since the data points required to gauge someone’s credit worthiness are often limited in these markets, it is a lot harder to do a quick and dirty risk and underwriting using something like a social security number and an associated credit history with a FICO score.  That typically means that credit limits for most consumers can be very low.  In Brazil, credit card limits can often range between 100 USD and 500 USD.  In India, many bank issued credit cards require fixed deposits (starting at about 300 USD) with a credit limit that is 70 to 80% of the fixed deposit.  If you’re trying to buy an airplane ticket or an iPad over the internet, it’s going to be pretty hard to do with that low of a limit on your card.

High APR – In addition to low credit limits, most cards in these markets come with significantly higher annual rates than in the US.  Rather that offering a very specific APR to an individual with a certain risk profile based on a number of data points, banks are typically offering a few tiers of APRs based on limited information.  As a result, rates remain high so that the portfolio of individuals in a specific tier can offset each other regardless of their true credit worthiness.  In India, we are talking about 30 to 45% APRs, and in Brazil, which has one of the worst rates globally, APRs start around 120% and go up from there.  So even if you manage to secure a credit limit that is high enough to pay for a high ticket item, you’re going to have to find a way to pay for it during that billing cycle to avoid some hefty fees.

Reasons like these are what force consumers in these markets to “prefer” alternative payment options.  This is also why many of these markets have evolved installment plans for the payment of expensive products and services.  Yes, there is some aspect of this type of buying habit that is cultural.  But let’s face it, if these consumers had access to the credit system that we enjoy in the US, they would probably buy everything on credit as well.  Changing the issuance of credit is a systemic change that will take time, and in the meanwhile, it is important for companies moving into these markets to understand the specific payment types that make sense for their business and the underlying reasons why.

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Local card acquiring – Why every company with significant global volume should care.

Local Acquiring

For most companies looking to optimize and advance their international customer acquisition strategies, there are a number of factors that are typically top of mind.  Market size, growth, language, culture, etc.  As strategies become more fleshed out, the details around conversion start becoming more important.  Number of clicks to purchase, fields of personal information to complete, and perhaps even what type of payment type should be offered besides credit cards.  But the one thing that is often the easiest to miss is whether or not local acquiring should be considered.  To be fair, local acquiring is a decision that is most often tackled once a market has been established in another country, but it is worth understanding why local acquiring matters before brushing this factor aside.

What is acquiring?

Before we get into local acquiring, let’s just take a few steps back and make sure we’re all on the same page about card acquiring in general.  At the most basic level, a credit card transaction is a short term loan.  The consumer has a contract with their credit card which is issued by a financial institution or issuing bank that he or she will repay the bank at the end of the month.  The company or merchant who has a product or service to sell to the consumer also has a contract with a financial institution or acquiring bank that they are selling a legitimate product in a legal and financially stable manner.

The way the system works is that the acquiring bank takes the credit card information from the customer and reaches out to the issuing bank to make sure that the consumer is good for the money (for a bit more on the nuts and bolts of what really happens, check out this white paper by the Federal Reserve Bank of Atlanta).  Once the issuing bank gives the okay, the merchant can then feel confident in providing the customer the required services.

Okay, so what is local acquiring? 

Even though the issuing bank gives the okay, there still needs to be a bit of trust between the issuing bank and the acquiring bank.  It’s only the issuing bank that ran the credit checks on the consumer, and it’s only the acquiring bank that ran the risk and underwriting on the merchant.  If either the consumer or the merchant turns out to be different than expected, one or the other financial institution could end up taking on the burden of that short term loan.  So if a Korean consumer is buying a subscription to let’s say Evernote, which happens to be based in the US and for argument’s sake also only has a US bank acquirer, then the US acquiring bank is going to have to talk to the consumer’s Korean issuing bank to make sure that the consumer is good for the money.

As you can probably tell, neither bank is going to be as familiar with each other as they would be if both were Korean or US based, and any merchant’s statistics will show that even legitimate credit card transactions get declined because of the unfamiliarity between the two institutions.  I’m not talking about zero transactions getting through, but rather a smaller percentage, and this really depends on the regions of the acquiring and issuing banks.

Local acquiring really means that the acquiring bank and the issuing bank are in the same region or country.  They have a higher level of trust between each other, and as a result the process is a lot smoother.  In the example above, Evernote may want to consider contracting to Korean acquiring channel through a payments service provider to get access to better local credit card processing for their Korean customers.

The bottom line

In the end, there are a few major items that local acquiring can help with:

  1. Improve your success rate – When both the issuing bank and acquiring bank have enough trust to let good transactions go through, you’re going to have more conversions when consumers are ready to buy.
  2. Eliminate cross border fees for your customer – Since the issuing bank and the acquiring bank are in the same region, there is no FX risk to the issuing bank and thus no cross border fee is assessed to the consumer.
  3. Potentially reduce interchange costs – In the US, we happen to have really high interchange rates (the rates that the banks and card schemes like Visa and MasterCard charge merchants for acquiring). This is mainly because of the affinity cards (Visa Signature, Corporate Cards, Hotel Reward Cards, etc.) that issuers give to consumers in the US. Someone has to pay for all of those rewards, and it’s typically the merchant who ends up footing the bill (often passed back to the consumer as a mark-up on the product, but that’s another story). Since this does not exist in many non-US markets like Europe and Australia, merchants can take advantage of lower interchange by locally acquiring credit cards in those regions.

Whether the time to optimize for local acquiring is today or not, it would be advisable for any merchant to understand the complexities that surround acquiring in general to be ready when the time is right.

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Filed under Local, Payments

Giving credit… onto a credit card

Trying to think of better ways to get money back to someone who didn’t make an initial credit card purchase, I have been hitting a bit of road block on a clean solution that is cost effective and simple.

This is the dilemma that I discussed in my previous post…  Paul in Singapore rents his apartment on Airbnb to Ellen who is in town from Australia.  How does Airbnb get Paul money in SGD that Ellen paid in AUD?  PayPal, bank transfer, local schemes…

I know that I am avoiding some important risk factors here, but the answer here may lie in the credit card schemes.  Visa has had something called the Original Credit Transaction (OCT) for a bit of time, and it looks like they are actively promoting it to developers as Visa Personal Payments.  The caveat is that you need to be a large financial institution with a Visa acquiring license to actually use the APIs provided, but when you do, you as a service provider can send money through the system to individuals globally onto their Visa card on file.

To be clear, the main purpose that it is outlined in the marketing collateral for OCT and Personal Payments is a person-to-person international payment network.  In the example above, Ellen could directly send money to Paul’s Visa card for the amount required.  Here’s what this would look like in real life:

But if you dig into some of the Personal Payments API documentation, you realize that there are some really robust tools for either a company like Airbnb or a payments company partnering with Airbnb to plug in and manage all of those outbound payments for their users through the use of FX, OCT and other tools to facilitate payment into the service provider’s Visa card.

cross_border_payments_flow - Visa Personal Payments

 

If this is all that is seems to be, a service provider would need to do a few things.  First, get all of the required funds from the inbound flow of payments into a funding account.  Second, validate that the person getting paid is indeed the right person with the proper AML (anti-money laundering) checks and balances.  And finally, ensure that the card on file checks out against the person who need to be paid.  If you could get all of these items to line up, it would appear that there is a workable solution here that would make the lives of a lot of people much easier.  Would love to hear more from anyone who has more insight on Visa Personal Payments, and how this could potentially not be as simple as it sounds.

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Helping complete the last leg of a marketplace payments journey…

Global Payouts

Over the last few months, I have become increasingly interested in solutions for outbound payments, especially from a global perspective.  The more you talk to marketplace type businesses (Airbnb, Uber, oDesk, 99Designs, etc.), the more you notice a need for a seamless payout experience on a global basis.

It’s easy enough to accept a payment, especially if your customer can pay with credit.  The really hard part is giving back someone money when they weren’t the person who made the initial payment.  For example, if Dan who lives in London wants to get designers from around the world to help put together a new logo for his company, Dan might use a site like 99Designs.  He would see all of the submissions, and perhaps he ends up choosing a logo from a woman named Julia based in Ecuador.  The entire process is managed by 99Designs, and they can take a credit card payment from Dan relatively painlessly.  Paying Julia her cut is where it becomes a lot more complicated.

Today, Julia can only get payment back in USD through 4 different options (PayPal, MoneyBookers, Payoneer or Western Union).  All of these options take time, cost money in the exchange and transfer and create a ton of friction.  This is not a problem faced only by 99Designs, but pretty much every marketplace with global reach is finding it difficult to make these outbound payments after a service or product is delivered.  It’s a broken system, and marketplaces are hungry for new solutions and partners to help manage the complexities of their payment needs.  The alternative of not having the right solution means that these types of companies are devoting a lot of time and energy in a part of the business that really should be left to a payments company.

If the seller and the buyer are both in the US, it’s a bit of an easier problem to solve.  Balanced Payments is one start-up trying to make it easier for marketplaces to think about both inbound and outbound payments in a single solution.  But it is a solution intended for smaller or newer marketplaces who are not truly global in nature and just need a simple method to manage payments for a unqiue business need.  It’s an offering that satisfies the needs of a domestic market, but starts falling short when we think from a global perspective.

Perhaps a cleaner way to send money globally will be through the issuance of credit to an existing credit or debit card, although this is currently a relatively difficult method to get approved from a risk and underwriting perspective.  Visa does allow for credits to be sent via the Original Credit Transaction, and some gateways like Braintree and Authorize.net are able to do the same.  While the winds of change are probably wafting through financial institutions to think more creatively about managing risk while meeting the needs of market, I think payouts to credit cards in countries across the world (especially those with higher risk profiles) will be a difficult thing to do.

I don’t know if I have missed an offering here, and I do know that Earthport and Envoy continue to do a solid job bridging the gap as start-ups think of innovative ways to meet this growing need.  For anyone who has more information on this topic, I would love to find time to connect and discuss.

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PayPal App – Happy stomach but more payments friction

PayPal for Food

 

Since the debut of the latest version of the PayPal mobile app at the beginning of September, the payments giant recently teamed up with Eat24 to entice customers to start using the app to pay for food through $5 and $10 coupons.  Using this incentive to test out the app and fill my belly with some food, I hit the streets of San Francisco over the course of a week in search of subsidized  lunches… and to that I am thankful.

What I realized is that there is still a lot more groundwork to be done, and there are aspects of getting traction with an app like this that still are not justified to the consumer unless someone is literally paying for their lunch.

  • Irregular payment processes – If you’re going to try to change behavior, it is best to have the same process from merchant to merchant.
  1. The first place I used the app was at an Indian burrito place called Tava.  I hadn’t used the app before, and so I had to awkwardly take a self picture and add it to my profile while waiting in line.  The process here was that the consumer checks in and then tells the cashier that they are paying with PayPal.  I checked in twice (logging in each time), and when I got to the checkout counter I was already checked out.  Fumbling with the app, I let two others pay before me as my lackluster portrait showed up on the tablet register and I was able to make the purchase.
  2. The next day, I decided to go to Jamba Juice for a smoothie.  I wanted to be well prepared, so I checked in outside before I even walked in.  As I approached the counter, I proudly told the cashier that I would be paying with PayPal.  “Hmm.  Not sure how you would do that”, she said.  She runs to the manager in the back, who tells me that I need to pre-order my beverage via the app.  As I stand in a corner looking up at the menu for some fresh carrot juice, the manager says,  “Oh by the way, the whole menu isn’t on the app.  There aren’t any fresh juices on there.  Kind of a work in progress.”  I order something that is on the menu, and walk away for a few minutes while they get the order and prepare it.
  • Lack of education among merchants – For most of the merchants that I visited (even those who had the little paper table advertisements displayed) almost nobody knew exactly how to take a payment, how the promotion worked and what to do in cases where there was a problem.
  1. After these varied paying experiences, I was a bit afraid to use the app for another purchase, but the call of free food beckoned.  I showed up at a small Middle Eastern restaurant, where the owner didn’t even really know how to take a PayPal order.  I figured it out myself, placed the order on the phone, and the order showed up on his register.  “You really should have tried to get the $5 off”, he said pointing to the placard next to his register.  When I tell him that I already got the $5 off, and that PayPal would be taking care of that while paying him the full amount, you could see that he wanted to start telling his customers immediately to use the app and buy more food.
  • A LOT more friction to pay with than a credit card – Had it not been for the subsidized lunches, I would have stopped using the app after the first attempt.  The number of times that I had to log-in, explain the process to merchants and try to decipher the right payment approach for each vendor was a net increase in friction rather than a decrease in my payments journey.

Overall, PayPal is going to learn a lot through these types of promotions, and the reality is that they are in a good position to figure out how to make a wallet work at the point of sale.  Payment processes can be streamlined for the customer, and merchants will soon see enough of these types of transactions to understand what it means to pay by PayPal (or Square, Google Wallet, etc.).

While there was definitively more friction in my experiences with the app than through a traditional form of payment, I can see how not having to enter card details or provide them during pickup or delivery can help reduce friction.  Unfortunately for PayPal, this is already something that Yelp is partnering with Eat24 since July of this year, and that’s a more likely place for me to look for food.  The other area that I think is interesting is the ability to pay a dining check with tip without having to wait for your server to physically bring out a pen and paper.  And again, Yelp and OpenTable are thinking through similar ideas which will make it hard for PayPal to be top of mind when at a restaurant or searching for food.  It could make sense for PayPal to become the preferred payment option from a Yelp app, but then again the wallet wars are still anyone’s game to win or lose.

 

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Filed under Payments, Product Innovation, Product Marketing

Increasing mobile conversions through smart payments sharing

As the margins around credit card processing are eroded through caps on interchange and a commoditized competitive market, payment solution offerings need to include value-added components to the services that they provide.  Anyone can take a payment these days at a rock bottom costs, and as any professor of strategy can tell you, you can only make more money by increasing the perceived value of your offering or lowering your own costs.  Probably time to increase perceived value…

The trick, of course, is providing a solution that addresses a need both for the merchant and the consumer.  Look at what Google Wallet, Square and Braintree’s Venmo Touch are doing today, and you can see how these types of solutions are reducing friction both for the merchant and the consumer.

The merchant’s pain point – Based on Braintree’s own research 70% of mobile searches do not result in a successful conversion, and a lot of it has to do with the difficulty of typing in card/personal data for purchase.  How could you improve conversions and make the process simpler?

The consumer’s pain point – Holding your phone or tablet and entering in your card data is a pain.  For me, if my card data is not already stored with the merchant, I’ll probably just wait until I am in front of my laptop.  Thus the large drop-off…

Sure a consumer can have a tokenized card sit with their favorite merchant, but there are few merchants who have the marketplace power of an Amazon or Apple… or the appeal of Uber or Hotel Tonight.  And if the merchant is using a utility like Jumio to help make the process of entering card data, then it’s making the experience better but not exceptional.

The solution – What if as a merchant, you could pull up a tokenized card based on a previous purchase or one that is stored directly on the consumer’s phone or tablet?

Google, Square and Venmo are attempting to do just that for their pool of merchants, and it’s going to have a major impact.  If the card that I already have stored with Uber pops up when I’m surfing my tablet and exploring my next vacation on Airbnb, then how much more likely am I to buy at the point of search?  A lot more likely than when I would do my research and wait until I was in front of my laptop.  In the old scenario, I might stumble onto a place on Hotels.com or TripAdvisor, but now I’m making my purchase on my mobile device and moving on.  That’s pretty powerful stuff that improves conversion and drives real revenue to merchants.

The challenge that remains – For this to be truly impactful, only a few companies can own the relationships with these major mobile merchants.  Either that or mobile OS companies need to start becoming payments companies, so that they can essentially store card tokens within the mobile device.  Both Apple and Google have been spending time building on some of these capabilities, but the reality is that they will probably need to make an acquisition when the time is right.  Then any app could pull my tokenized card data from my phone, and I would just use the appropriate card to make my purchases.

And that’s probably a good thing for everyone.

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Let’s get started. Again.

Finding The Happy Medium

With a little over a year under my belt working with companies to figure out better ways to transact globally, it feels like the right time to start blogging again. There are so many points of intersection where social, big data, local, and payments can change the way that we think about international commerce.

Most of my daily conversations revolve around payments, so I recognize that this is going to influence my posts moving forward. But as the initial hype around each of these topics dissipates and becomes a part of “normal” eCommerce fundamentals, the truly innovative companies will be those that can utilize a combination of three or all four of these areas to provide truly compelling solutions. And ultimately, converting interest into revenue is heavily influenced by effective payment strategies. So these posts will be less about innovative companies who are simply doing cool stuff, but rather innovative companies who can effectively make money for themselves or others.

Rather than throw it all into one big post, I’m going to get my blogging juices flowing by setting the stage. Here’s how I see the major topics from a high level. I’ll get it into it more over the next few weeks, but just wanted to have some space to e-whiteboard it all.

Social
A customer’s personal and professional network that sits behind your web presence or provides a way to connect directly with your customer

Big Data
A way to make sense of all of the data that is floating around in the ether or behind your company’s walls

Local
Knowing where in the world your customers are physically located and providing relevant content based on that information. – This includes mobile, but let’s be honest, it’s all going to be mobile pretty soon

Payments
Providing a simple way for your customers to pay you for your product or service

Social + Big Data
Taking all of the things that people are having conversations with their friends and followers, and then analyzing it to put together strategies that can drive your business

Social + Local
Letting people know that they are physically close to other people in their networks

Social + Payments
Social commerce works because we like buying what other people buy, and ultimately we trust each other

Big Data + Local
Tons of data becomes a lot more useful when you can pinpoint where in the world it’s coming from

Big Data + Payments
Take all of the transactions that pass through your gates and figure out what patterns and insights emerge

Local + Payments
Figure out where your customers are physically and make it easier to make purchases

Social + Big Data + Local
Who + What + Where. Add it all together and you have a ton of information to drive more relevant options back to your customer

Social + Big Data + Payments
Match up social profiles and conversations with transaction data to combine consumption patterns with demographics and opinions

Social + Local + Payments
People like buying what other people buy, especially when those people live closer and like similar things

Big Data + Local + Payments
Understand what people buy and where they buy to sell more effectively

Social + Big Data + Local + Payments
Know where people are, who they are friends with, what they buy and what they talk about, and you can provide compelling products and services that will keep the interest of your customers and optimize the way you sell to them

There are already a bunch of entrepreneurs who have figured it out and are out building these companies. Lots more ideas left to execute on. I look forward to hearing your thoughts on how I can improve on this framework, and hearing more about your companies as well.

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Filed under Big Data, Local, Mobile, Payments, Social

Moving from social hearing to social listening

Everyone says it, and yet few social media marketers seem to take their own advice to heart.  “It all starts with listening,” they say.  And everyone nods their heads in agreement.  But how many follow through?

In a micro-second world where focus and attention is often marginally greater than a cursory study, it seems to make sense that professionals deep inside the world of social media would have even less time to really listen.  I think that we have made the mistake of confusing hearing with listening, and buying into the jargon that social media monitoring really is the same thing as social listening.

In 7 Habits of Highly Effective People, Stephen Covey wrote, “Most people do not listen with the intent to understand; they listen with the intent to reply.”  As we put greater emphasis on engagement, are we thinking more about the response than the learning?

Listening is about taking the next step from simply hearing what people are saying to internalizing what they are trying to convey.  It is about finding context within content and matching feeling with thoughts.  Social media monitoring in itself is just data.  It is the content and the thoughts, but it does not convey intention.  For marketers to take full advantage of social data, they need to look at more than just what people are saying and how often.  Graphs that show volume fluctuations are great, but how does that help you figure out what you should do based on what your customers are telling you?

Lee Iacocca, the former CEO of Chrysler, once said, “I only wish I could find an institute that teaches people how to listen. Business people need to listen at least as much as they need to talk. Too many people fail to realize that real communication goes in both directions.”

If you can’t show that you have listened (not just to your customers, but also to yourself and your company), then how can you improve to meet their needs?  Some people think that this type of listening is mainly about driving product innovation.  But it is much more.  Analytical rigor applied to social media data can help improve future marketing campaigns, fix customer service issues and pinpoint better ways to generate interest for products and services.

This cannot be done within the confines of a social media monitoring product.  It is, however, a necessary first step.  So, monitor.  Hear what people are saying.  Then, take the data out.  Put the data into visualization or business intelligence software.  Have a data analyst look for trends that match content with context.  I know that this is not easy, but at least you won’t be tricking yourself into thinking that hearing is the same thing as listening.

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Filed under Corporate Social Media, PR and Communications

Using the hype around Pinterest to define your interest-based community strategy

With the considerable attention that Pinterest is getting these days, many individuals and companies are wondering whether and how they should be developing their “Pinterest strategy”.  Rather than thinking about a Pinterest strategy, I would challenge companies to use this time to figure out which types of interest-based social networks are optimal for engagement and participation for their particular brands.  Influence within interest graphs is often coveted by companies trying to reach their target customers through social technologies.  But if the interests of a specific network are not aligned with the products and services of the brand, then spending time defining a strategy for that network may not be the best use of anyone’s time.

To be sure, Pinterest is clearly showing some impressive numbers.  Last month, according to ComScore, the site had over 11.7M monthly unique visitors.  In addition, a Shareaholic study placed the percentage of referrals from Pinterest at a higher number than Google Plus, LinkedIn and YouTube combined.  But looking deeper into the metrics, we see that the most engaged users of the social network are upper-middle class women in middle America.  Referral traffic from the site is promising, but it is mainly to lifestyle-focused retailers and it is unlikely that anyone in the web metrics world thought that Google Plus, LinkedIn or YouTube were driving tons of traffic.

The point is that Pinterest is great for companies whose customers fall within the demographics and interest graph where people are having related exchanges.  If when you listen, your customers are not engaging on Pinterest conversations, then you can probably hold off on this specific social network.  Don’t pay attention to those who say you might miss the train.  If you have a strategy for current and future interest-based social networks, you should be fine.  But focus on what matters today.

We should also keep in mind that there are a number of interest-based social networks besides Pinterest which already exist: including Instagram, Foodspotting and Fitocracy.  In addition to these networks, there are clearly forums and web communities that target on specific interests from maternity to motorcycle racing.  If talk about Pinterest has raised awareness for being a part of communities that are not Facebook, Twitter and YouTube, this is a good opportunity to identify the types of communities which are directly to your business.

And it all inevitably comes back to listening.  It is a lot easier to be where your customers are talking than to force them to find you on networks that your company thinks are important.  Monitor conversations about your company and your competitors, figure out which communities have the biggest bulk of posts, and define your strategy based on this analysis.

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Filed under Business Development, Corporate Social Media

Why companies with big ticket items need to pay attention to LinkedIn

Is LinkedIn an opportunity for marketersAfter spending the last few weeks telling brands and start-ups to consider LinkedIn as a marketing opportunity, I thought it could be helpful to post some of the hard numbers that make this a compelling channel and social network to sell higher-end products and services.

While many Global 1000 marketing departments currently have a reasonably mature Facebook and Twitter strategy, only a select few are working on a robust LinkedIn marketing strategy.  Considering the demographics of the audience that makes up this social network, it is surely an untapped channel that can provide deep targeted messages to reach an affluent audience with the power to spend money.

According to a compilation from the LinkedIn Ad Platform at the beginning of Feb 2012, LinkedIn has over 147 million members of which 44% work in companies that have more than 10,000 employees.  Within these members, about 40% are Managers or higher and 25% have the title of Director, Owner, Chief Officer or Vice President.  More than 26% of the members are in the high-tech and finance industries, and in fact, every single member has identified what he or she does for a living.

As the level of conversation and number of participants across social networks increases, marketers are having a harder time finding and advertising to the right people who may actually be interested in their products and services.  LinkedIn is a simple way to tap into the interest graph, and as a marketer, this is going to tie together ability-to-purchase with demographics and/or interest.

A simple use case could be for a technology brand.  You sell CRM solutions, and you want to market to people who are authorized to buy these tools for their company.  On LinkedIn, you can buy ads that directly target the roles and types of companies that you are looking for.  On top of that, you can create and contribute content to conversations through  LinkedIn’s Company Pages, Groups and Answers.  If the content is engaging, you can get people who actually buy CRM solutions to talk more about your company with other people who are also in the market for buying CRM solutions.  It’s a way to use a single social network across the entire customer decision journey.

But this also works for other scenarios, where you, as a marketer, are not necessarily looking for an interest that is directly related to an individual’s job.

Imagine running a campaign for a luxury car.  While you could advertise on Facebook, to people in a certain age group or maybe even individuals who have included a reference to cars in their profiles, is that really the right set of people to target for your campaign?  Instead, you could show your campaign ad to every member on LinkedIn who is a Director or above.    Luxury cars are not necessarily for car enthusiasts or people over 50.  Luxury cars are for people who can afford them, so use the tools and channels that can better help find these people.

This is not to say that Facebook advertising does not work, but rather that LinkedIn as an advertising platform is too often ignored.  While a number of technology companies are already trying to figure out how they can use the channel, there are still too many companies with big ticket products and services who are not paying enough attention.  This is probably not the best channel to sell Hanes underwear or Cherry Coke, but it is worth looking into for any company or start-up that wants to target an affluent audience with the ability to spend money.

 

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Filed under Brand Management, Corporate Social Media, Product Marketing