All About The Product

This is a blog about the products I work on with a common theme around designing and building distinctive, engaging, digital-first experiences that just work for users and the business. I'm currently Director of Product at Computershare. I like cycling, cider and small dogs, not necessarily in that order and all views are categorically my own, not those of my employer.

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Here’s some more examples of Your Plan print and online advertising. As you’d expect the advertising leads with the products being promoted, the TV’s, fridge freezers or washing machines with Your Plan appearing as a supporting sales message. 

The value of Your Plan is to help wavering customers, to provide them with a finance option to help them spread the cost of their purchase or to take advantage of a six month payment holiday which comes as a standard option with every Your Plan purchase. At this time of year with Christmas coming up such a buy now pay later period is, perhaps understandably, quite popular. 

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Your Plan Black Friday TV advert airs this week

This is the super exciting CurrysPCWorld TV advert featuring Your Plan that aired this week. It’s the first time that one of Laser’s products have featured in TV advertising.  

Flexible credit you control

CurrysPCWorld are using Your Plan in the way that it was designed - to help their customers make their purchases more affordable.

The run up to Christmas is an expensive time of year and Your Plan helps the customers to spread the cost of their purchase. They can choose a six month holiday period where if the credit amount is paid off in full before the end of the period they don’t pay any interest or they can choose to spread the cost over between 3 and 36 months.

Your Plan helps CurrysPCWorld by making products more affordable and they can use it in the way shown n the TV advert to support specific products or product categories.

But a Steve Punt voiceover, I’ll take that!  

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Now that Your Plan has launched I can share some of the products screenshots. As you’ll see we’ve used a mobile-first design, fully responsive throughout with a clean, modern look and feel. We’ve based our creative on meeting the needs of customers who told us that they wanted to know what was going on and to feel like they were in control. 

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CurrysPCWorld Your Plan - Flexible credit you control

Today we’re launching Your Plan with Currys PC World, one of the UK’s largest and best known retailers. 

Your Plan is a highly flexible credit plan that puts customers in complete control of how much they pay and for how long and helps CurrysPCWorld drive sales by giving customers a flexible easy-to-use finance option in-store and online. 

Your Plan for customers

Your Plan is based on extensive consumer research by Laser UK and Dixons Carphone which, perhaps not surprisingly, found that shoppers found finance confusing, expected to be caught out and wanted help in choosing the right option for them. 

Flexible credit you control

Your Plan has been designed to put the customer in control, to provide all the information they need to make the right decision and to be easy to use. Our aim has been to build a finance product that customers can trust, being completely transparent about the costs and making sure there’s no sneaky fees or hidden catches. 

Customers can choose a range of options to build a plan that’s right for them. They can:

Your Plan in any channel

Your Plan is available as a payment option for any purchase costing over £249 in-store or online. Online simply add the product to your basket and during the checkout process choose ‘Pay by Credit’ where you can choose your plan, complete a simple application and, subject to being approved, e-Sign your credit agreement to complete your purchase. In-store customers talk to a CurrysPCWorld colleague and follow the same procedure. 

Both online and in-store customers are presented with the information that they need to make a decision that’s right for them, putting them in complete control of how much they want to pay and for how long. Borrowing costs are clearly displayed and the customer can clearly see the impact of different options like the buy now pay later period. 

Your Plan online account

Once customers have completed their purchase using Your Plan they can register for a Your Plan online account and see how much they have left to pay, over how many months and can also use the plan to shop for additional purchases, without the hassle of having to re-apply. Once the account has been opened, shoppers can use it to buy again on anything £99 and over.

More on the business side

Your Plan is an omni-channel payment and shopping solution that meets customer needs for simple, straightforward finance options. Your Plan works seamless across online, in-store and telesales channels provides CurrysPCWorld with a flexible, engaging solution to help drive sales, increase average transaction values and customer satisfaction.

Your Plan delivers the following capabilities:

Digital-first, paperless solution 

Our mobile-first responsive design has been built for digital consumers who seamlessly swap between in-store and online. Customers can complete their purchase using Your Plan without the need for any paper including electronically signing their contract documents    

Quick, easy to use finance application

Your Plan provides one quick, easy-to-use finance application whether you’re in-store with CurrysPCWorld staff or online. Customers can complete a quick eligibility check without leaving a footprint on their credit file, providing peace of mind for potential customers and helping the sales process

Personal, re-usable credit limit   

On approval customers are given a personal credit limit that they can re-use for shopping at CurrysPCWorld without the need to re-apply. Customers can simply identify themselves as a Your Plan customer online or in-store, confirm their details and checkout using Your Plan  

Get pre-approved online, shop in-store 

Our unique Pre-Approval process enables customers to apply for finance online, and take a simple barcode to store to complete their purchase. Sales staff simply scan the token to import the customers details into the point of sale system and complete their purchase.

Integration into CurrysPCWorld payment systems 

Your Plan is integrated as a standard payment option into 10,000+ in-store point-of-sale terminals and in the online checkout enabling customers to choose from paying by cash, card or Your Plan in any sales channel

Your Plan Online Account

Your Plan provides a useful, easy-to-use online account that gives the customer complete visibility and control over their account. The account shows a clear visual display of their overall account and the status of each individual purchase. Customers have complete flexibility to make additional payments or to settle their account at any time at no extra cost. 

Ongoing customer engagement 

The Your Plan account enables CurrysPCWorld to keep in contact with the customer, reminding them of the benefits of Your Plan and the ability to re-use it. Your Plan is supported by a joint CRM-driven marketing programme engaging the customers from first-use and throughout the life of their account. 

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Asda Cashback Credit Card

Today we’re launching a new Cashback and Cashback Plus Credit Card for Asda, one of the UK’s biggest supermarket brands.

Asda’s Cashback Credit Cards enable customers to earn cashback on everything they buy, anywhere. Customers of the Credit Card will earn enhanced cashback on all Asda shopping, Asda fuel and George.com whilst also earning cashback on all other purchases. Customers can choose from a fee-free standard Cashback Credit Card that pays 1% in Asda and 0.5% elsewhere or the Asda Cashback Plus Credit Card that pays 2% cashback in Asda and 1% elsewhere. 

How does Cashback work?

Customers will earn cashback every time they shop with their Asda Cashback Credit Card. The more they shop, the more they earn, with no maximum cashback amount. As soon as they’ve earned £2.50 in cashback customers can download or print a voucher, take it to any Asda store where, like any other voucher, they can scan it at the till and have the price of their shopping reduced. 

Asda Cashback Credit Card 

Asda’s Cashback Credit Cards enables customers to earn cashback on everything they buy, anywhere. Customers of the Cashback Credit Card will earn 1% cashback on all Asda shopping, Asda fuel and George.com with 0.5% cashback on all other purchases.   

Asda Cashback Plus Credit Card 

Asda Cashback Plus Credit Card customers will earn 2% cashback on all Asda shopping and 1% on all other purchases with a £3 monthly fee.   

Asda Cashback Credit Card online account

The Asda Cashback Credit Card online account shows the customer everything they need to know. They can keep track of all their Credit Card related information and complete common transactions including seeing their current balance, viewing transactions and statements and making payments. 

Customers can also view their cashback balance and create and manage their cashback vouchers. From the online account customers can view their cashback balance, create a voucher and, from their mobile or a printed voucher that’s automatically emailed to them, take the voucher to store and spend their cashback.  

Asda Cashback vouchers can be scanned from a mobile screen or a paper voucher at one of nearly 15,000 tills in any Asda store. 

What do Asda get out of this?

Asda’s Cashback Credit Cards offer genuine value to customers in a market where major card issuers are reducing the richness of their cashback or reward schemes. The scheme’s unlimited cashback is an obvious benefit when cashback has been cut, as in the case of the previously marketi-leading Santandar 123 accounts or capped and both Credit Card’s offer their customers cashback that can be redeemed as cash against Asda shopping.

The Cards are based on customer insight that told us that Asda Credit Card customers wanted to be rewarded for their shopping in Asda. They’ve taken the card at least in part due to their affinity with the Asda brand and the cashback reward vouchers are designed to be a physical manifestation of that reward. The vouchers clearly show to both the customer and to Asda that they’re earning a reward for their shopping. Both the customer and Asda can track the value of cashback and see first-hand the vouchers being redeemed in store.

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Barclaycard Purchase Plan

This is a post about credit cards. Credit cards are boring but necessary and most people use them to one extent or another, often to spread the costs of large purchases. 

The trouble with using credit cards in this way is that the costs can soon add up and as the terms and conditions are often bafflingly complicated people lose track of what is going on and end up paying back much more than they intended to. 

So on the face of it the Barclaycard Purchase Plan is a good idea. It works like this:

Purchases from £495 up to 85% of your credit limit (£5,000 maximum) are eligible to be paid back in equal installments over 6 to 24 months

You’ll pay 0% interest and a one-off fee

The purchase amount and the fee will be added to a Purchase Plan and spread over the term you’ve chosen, and included in your monthly instalment

The fee will depend on the purchase amount and the term you’ve chosen 

Now in principle this is a good thing - the main way that credit card debt gets expensive is when people pay the minimum monthly payment and pay interest on their balance for long periods of time. This Purchase Plan helps answer this problem by splitting the repayment of larger purchases over pre-defined periods of time and as such the customer benefits from:

Certainty - they know how much they’ll pay

Flexibility - they can pay more at any time

Uses existing Barclaycard account - so no complicated applications or new credit searches

Barclaycard explain it like this

Now basically this is the problem - it’s quite difficult to understand (even for someone in the industry). Some concerns are:

The need to check eligibility before making the purchase - this will undoubtedly catch some people out who will think they can apply the Plan retrospectively 

The Plan is promoted as “Enjoy 0% from 6 to 24 months (One-off fee applies)” - this may well be true but the one-off fee can have a substantial affect on the APR and raise it considerably - the Representative APR is more like 11%, which is a big difference to 0%!

Fees vary from 4% of 8% depending on the purchase amount and term - this undermines the customer promise of certainty somewhat as the customer won’t be certain

Repayment complexity - this is really where it starts to get complicated:

If you normally pay your account in full each month you’ll pay the main balance plus the monthly plan amount 

If you normally pay the minimum amount each month you’ll pay the minimum payment on your main balance plus the installment amount

...so far so good but...

If you pay more than the minimum but not the full amount (i.e. an ‘over’ payment) then the amount is used to reduce the balance of the monthly plan which, while on the face of it is ok, means that you’ll pay interest at your standard rate on your main balance and take you longer to pay off, increasing the repayment costs of the main balance substantially

Now given that I’ve struggled a bit to explain this it’s a reasonable assumption to say that many people will struggle to understand the nuances of this plan and the costs of using it. In principle it’s a good idea but I suspect that Barclaycard found it harder than they expected to reduce the complexity for the customer and have ended up with something which is more complicated than they intended.

To fix it is easy to say, harder to deliver but you’d need to:

Allocate ‘over’ payments to the least cost option automatically

Allow the customer to move purchases between their main and purchase plan balance

Provide tools and information to clearly represent the interaction between the main balance and the plan balance and put the customer in control 

Remove the pricing differences - choose a standard fee of x%

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Zopa loans application review

This is a customer journey walkthrough and review of Zopa’s loan application which I think is the best in the market. ‘Best’ of course is highly subjective but I’ve looked at:

Clarity of proposition/customer promise

Visual design

Browser behaviour and flow through application

Information requested 

Copy and tone of voice

Support to customer

In most of these categories Zopa’s application is pretty good and they do a great job of engaging consumers in their application and explaining what is going on, which is sadly missing from many other providers. 

Page 1 - Landing page

This is a nice landing page. Zopa isn’t yet a mainstream brand so communicating who Zopa are and what they offer is important. The strapline “Be smarter with your money” is quite clever as it addresses both sides of the ‘peer-to-peer’ in peer-to-peer lending and appeals to both borrowers and lenders. The two calls to action are very clear - ‘Get a loan’ or ‘Lend your money’.

There’s a couple of sections dedicated to building the customers confidence in Zopa as a provider with ‘Low rate loans at Zopa’ describing Zopa as “the UK’s largest peer-to-peer lending service” and provides some big numbers to reinforce their credibility (£1.07 billion lending to 110,000 people). This is particularly important for prospective customers as although peer-to-peer lending is growing quickly it’s still a niche product in a marketing dominated by some very large banking, supermarket and retail brands. 

Zopa also state “we offer low rate loans to people who are good with their money” and reinforce this message in the lenders section with “...lending money directly to responsible borrowers.” This is a critical commercial point for Zopa’s business model as they’re targeting quality borrowers who will pay back their loans with a low default rate. 

Page 2 - 'Get a loan’  

Page 2 takes us into the loan application for the first time. Here the potential applicant gets to configure their loan - choosing their loan amount using a simple slider and picking their term using radio buttons. The loan configurator changes the APR % and the monthly cost depending on how much is borrowed. Zopa are quite up-front about these differences in price which are often hidden by other competitor products.  

The experience is smooth and straightforward - at this stage as a prospective customer all I’m interested in is seeing how much it’s going to cost me so I really just want to fiddle around a bit and see what happens. When I’m happy with my loan configuration the ‘Get a quote today’ call to action is nice and clear. 

The ‘Representative example’ is a regulatory requirement and can’t be avoided.  

Below the loan configurator (I need a new name for this!) are a series of confidence building reinforcements that answer customers different questions:

‘Why Zopa?’ - is a list of features of the Zopa loan product

‘Sensible loans in a world of nonsense’ - is a tongue-in-cheek look at what good value and how flexible the Zopa loan is

‘You can get a Zopa loan to’ - answers customers questions about how they can use their Zopa loan as most prospective applicants arrive at this stage with a very specific use for their loan in mind

‘How to apply’ - does what it says

Customer reviews - are looking to reinforce the Zopa benefits and put a friendlier face on what can be a serious and dry product  

Page 3 - 'Get a personal quote'

Having settled on the loan amount and term on the previous page the customer is now into the serious side of things - providing the information that Zopa will use to decide whether to lend you any money. These are the critical pages for Zopa as they need your personal information but ask for too much and the customer will give up half way through. 

There’s some interesting language here - as a prospective customer I just want to know if you’ll lend to me and I’m not entirely sure what a “personal quote” is, although it becomes clearer later. The ‘soft search’ copy explains to the customer that the request doesn’t impact on the customers credit score. This could be made a little more prominent earlier on in the journey as it’s a good ‘no-costs’ benefit for the customer and enables them to check if they’re eligible for a Zopa loan without leaving a credit file record. Conceivably this could be explained a little more as I’m not sure many loan applicants understand the impact of their applications, especially people making several or speculative applications. 

First impressions are really positive:

Clean, fresh, friendly looking application

The pale blue background calls out the fields to be completed very cleanly

Section and field headings are clear

Browser behaviour is nice and smooth with active fields outlined with a nice blue hue and errors or missing data highlighted in orange  

Language and tone of voice is straightforward

‘Calculate your quote’ is a pretty straightforward call to action and I’m happy to click it.   

The page asks for quite a few fields but as the customer is in a serious mindset of borrowing what can often be a considerable sum on money it doesn’t feel too long. Critically Zopa’s application is far shorter, better presented and easier to use than most of its’ competitors.

There are a few questions where the customer may wonder:

Phone number - will Zopa use this or is it just a nice-to-have?

Loan reason - do Zopa really need to ask for the loan reason as there’s no way of checking the customers intention? This could also be completed in the follow up checks that Zopa make on their initial approval

Address lookup - lovely! Easy to use and sometimes unusually for an address lookup, works perfectly

‘Create a password’ - at this stage the customer is just receiving a quote so it may be too early to ask them to essentially create an account. It may be better to ask for the customers email address and position it as required to send the customer their quote by email?

Page 4 - 'Your personalised quote'

Ok, so we’re making progress...

Based on what I’ve been told I expect my personalised quote to be calculated and that seems to be what is happening. Zopa tell me this might take 60 seconds, asks me to “sit tight”, provides a spinning wheel to reinforce this and then ticks off the various stages it’s going through. This last bit is a nice touch as it provides a reason for the delay but also explains what Zopa is actually doing... 

That said what’s a ‘bank check’ and why are they checking my bank? I’m only asking for quote!! 

Page 5 - 'Your loan quote'

Now there’s a bit of a jump here. My personalised loan quote has finished processing and it looks like I’ve passed the first stage and been made an offer. I say “looks like” as it’s not 100% clear what has happened as there’s no clear heading or copy or any breadcrumb or navigation to indicate how far through the loan application I am. However I can see that I have a ‘loan quote’ of £10,000 for 5 years at 6.5% which I’m happy about.

The ‘About us’ and ‘About taking out a loan with us’ provide some reassurance and guidance to what will happen next which is trying to help the customer overcome take the next, more serious step, which is to make a full application that will leave a record on the customers credit file.    

So I’m happy with the quote and want to proceed so I need to fill out the next bit of information. ‘Continue your loan application’ is good guidance and the supporting copy usefully tells me there’s a cooling off period and that I’ll have an entry placed on my credit file if I proceed.  

This is the really personal stuff - Zopa want to know my job title (why?). I can understand that employer is important as they’ll want to be sure that I am employed and that I can pay back their loan. If I’m in long term employment with a stable business with an income that can cover my loan repayments then clearly this is a good indication of my ability to repay and my risk.

I’m asked for my current bank details for where the loan money will be paid. Zopa are asking for this before I’ve been approved which may be a hurdle for some customers but equally it’s important to smooth the process for those customers accepted.       

I’m not sure about the final call to action ‘Proceed to payment options’ - for loan applicants who are accepted this will be the result but there will be a substantial portion of applicants who will be declined and this call to action doesn’t really describe the action that is being taken. More straightforwardly the call to action could be ‘Apply now’.    

Page 6 - Decision 

The decision screen is difficult to see without actually applying for a Zopa loan which I’m not doing at the moment but as I entered dummy data Zopa have picked up on it and declined my application (as you would hope!).

The decline is polite and straightforward (”We can’t offer you a loan today”) and Zopa provide some useful information about why the application may have been declined, without explaining the exact reason to the applicant (which is standard practice). Zopa also provide a referall to the debt management charity StepChange which is good.      

Overall summary 

Loan application are almost by definition a bit difficult - they’re a serious subject, highly regulated, involve lots of money and cost people a lot of their hard earned cash so they’re not to be taken lightly. The personal loans market is dominated by the high street and supermarket banks and many providers have unwieldy, long, difficult to use applications that request all sorts of information that is difficult for customers to justify providing, even for a purchase like a loan.

Against that background Zopa’s application is pitched perfectly - it’s highly focussed on the customer, providing an easy to use and quick application that is supported by the information that the applicant needs to progress at each stage. It looks and feels nice to use and is serious whilst retaining a sense of being different and communicating who Zopa are.

The lightness of touch comes early in the journey when the customer is still in the discovery phase and where Zopa can bring some of their personality to bear to overcome the customers inhibitions or concerns.  My main summary is that the application is quick and doesn’t request too much information.

So from me 9/10, well done Zopa!

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WhatsApp worlds biggest messaging app, threatening Facebook

WhatsApp recent announcement that they now have 400 million monthly active users prompted Business Insider to compare the growth of WhatsApp to their closest competitors WeChat from China and LINE from Japan.

The data shows WeChat ending November with 297 million users and LINE having 186 million. Although both of these numbers are huge and growing quickly and WeChat and LINE are both showing how to grow their revenues WhatsApp are growing faster and seem to be taking an unassailable lead in messaging.

Apps this big must be worrying for Facebook and Twitter who rely on large networks on users regularly visiting their sites to sell advertising. WhatsApp is a straightforward user experience with a single overriding goal of messaging in a simple, ad-free environment. Compared to the clutter and ever increasing advertising in both Facebook and Twitter WhatsApp offers a reassuringly straightforward approach and with growth sustained at this level users may find that they don't need Facebook as much as they used to.

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WhatsApp hit a staggering 400 million monthly active users

WhatsApp have announced that they now have 400 million monthly active users - that’s actual active users, not just people who download the app or register. They’ve also added 100 million monthly active users in the last four months.

Not bad for a paid-for app.

Here's the blog post:

"Today, we’re proud to announce that because of you, WhatsApp has reached a milestone that no other mobile messaging service has achieved: 400 million monthly active users, with 100 million active users added in the last four months alone. This isn’t a count of people who just registered for WhatsApp – it’s the number of people who are actively using the service every single month."

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For all the hype BBM's only number 9 in the world of Android

For yet more evidence, if any were needed, of WhatsApp's strong position Mobidia have published some data showing the penetration of the major messaging apps on Android smartphones. 

Their results show WhatsApp is installed on 41% of Android smartphones, Korea's Kakao Talk is on 23% with Facebook Messenger and Skype on about 15%.

WhatsApp are clearly the dominant messaging app and the data shows how users use more than one messaging app, often for different uses. For example their primary means of communication with close friends may be WhatsApp but they use Skype or Facebook Messenger to keep in contact with their wider friend networks and may also use apps like SnapChat (who come in at 7% of all Androids reflecting it's, as yet, niche appeal to young users).

KakaoTalk's result of 23% is driven by its popularity in Korea where it is the most popular smartphone app. Apps such as Kik, Tango and even BBM show that, although they may have many millions of users, their position is driven by strong niches such as youth for Kik and Blackberry users for BBM. 

Mobidia collates this data from the millions of smartphone users that use its free app to monitor their mobile data usage. According to Mobidia the sample represents smartphone users from all major, global geographies.

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10 ways that free messaging app monetize - Slideshare

Here's a companion Slideshare on my 10 ways that free messaging apps monetise post. Please feel free to download if you would like. 

10 ways that messaging apps monetize - a guide to monetization from Mark Watts-Jones

  Any questions welcome. 

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10 ways that free messaging apps monetize

Free messaging apps didn’t have a business model until along came stickers and games platforms. This post looks at the options for messaging apps to monetise.   

 1.       Paid for/subscription

Of the leading messaging apps WhatsApp is unique in charging for access. Although after a recent change they now offer their users the first year free, with each subsequent year costing $0.99.

As WhatsApp are anti-advertising and don’t offer any other premium features this subscription is how they earn their dollars although with more than 300 million monthly active users they're probably doing ok. 

That said the only reason WhatsApp can charge is they're market leaders and any other apps following their lead will likely fail. 

2.       Advertising

Along with WhatsApp most of the top messaging apps exclude banner or display advertising from their core messaging features believing that such advertising adversely affects the user experience.

WhatsApp have been particularly explicit about advertising, with CEO Jan Koum even extending their dislike of it to include

"anything that smelled like an advertising business"

By this he's referring to the stickers and in-app purchases that competitors LINE, WeChat, Viber and others promote in their apps. For me this is a little disingenuous as the messaging part of most of WhatsApp competitors is available without advertising and the richer experience of stickers and games are opt-in.

Of which more below...

3.       Stickers

Stickers, for those who’ve been asleep for the last six months, are pictures, sometimes animated, that are exchanged by users within chats.

They’re small, visually rich, often cartoon-y images that are used by users to embellish their chats - to express emotion, tell a story, be silly, funny or serious or for any other reason that the user might like to use an image to represent how they feel. They're like ‘better’ emoticons. 

Stickers typically come in ‘packs’ of between ten and twenty and can be downloaded and used within one-to-one or group chats.

Selections of free sticker packs, often produced by the app itself, are offered to drive awareness and encourage usage with the hope that once users are hooked that they become premium stickers users.  

Premium sticker packs, priced at around $2 per pack, are a mixture of the apps own-produced content, content from established producers such as Disney or Sony and from smaller providers who produce bespoke content especially for the app. The rich, graphical nature of stickers is great for movie and character content but the format also lends itself to producers who can create interesting and engaging content. 

With a clear business model and users who seem to like the concept it's no surprise that stickers have spread quickly with LINE, KakaoTalk, Viber, Tango, Kik as well as Facebook Messenger and Path all offering them. And with LINE earning $10 million per month from sticker sales alone I expect to see a lot more stickers! 

4.       Sponsored stickers

Once messaging apps have built up large communities of users they become attractive to brands as a means to directly engage with users. Apps like WeChat and LINE offer official, verified accounts (see 5 below) but a first step to user engagement is to offer free, sponsored stickers.

This straightforward extension to stickers offers enables brands to get to users in a visually appealing way and, by definition, where the user does the content sharing for them. This model works extremely well for music artists, movies or other mainstream digital content where users genuinely want to get their hands onto content.

Imagine how quickly Twilight, Lady Gaga or Despicable Me content spreads and brands will pay handsomely for this access.   

The messaging apps have different options open to them on how they monetise including a simple access fee where the brand pays to place it's content, payment per download or payment per message. Sponsored stickers are LINE's third largest revenue stream after in-app payments and premium stickers so again we'll see more of this.

5.       Official accounts

Having built a large community of users the perennial question facing messaging apps is how can they monetise if they don't accept display advertising? Well the answer to this could be official accounts.

Official accounts give brands, celebrities and merchants the ability to connect and engage directly with users. The official account uses the same, familiar features within the app so they can connect as 'friends' with users, exchange messages and share content. 

For enlightened brands that content could include basic marketing messages but more likely will take advantage of the closeness of the relationship to the user and include prizes, media, exclusive news, offers, coupons or discounts.

In the case of WeChat users can add brands or celebrities via their user ID or using a QR code reader which is built into the app. Adding Lionel Messi, the FC Barcelona and Argentina football player, gives me, in theory (!), a direct connection to him. 

LINE have similar official accounts and have brought together sponsored stickers and official accounts in their current promotion of Real Madrid. Users can download a free Real Madrid sticker pack in exchange for adding Real Madrid's official account as a contact.

Again there's several different ways for the apps to monetise:

Pay to create and promote official accounts

Pay per engagement e.g. per contact added, per message exchanged, per content downloaded

Pay per message e.g. brands could buy 'bundles' of messages to send or receive

Sponsored content

With messaging apps having many millions of users in specific markets it's easy to see how brands would be eager and willing to pay to get access to these users, particularly if users gain something valuable in return and are incentivised to connect to the official accounts. 

The risk of course is that the official accounts get excited and start spamming their followers which has a wider impact on the users willingness to keep using the app. Tread carefully would be my advice to both apps and brands.

6.       Content merchandising

Content merchandising isn't going to be an option for every messaging app but for the one's creating their own characters licencing them for merchandising may well prove to be a highly lucrative move.

Such a move follows the success of Rovio in expanding Angry Birds into a global entertainment, publishing, and licensing brand. 

Jun Masuda, LINE’s chief strategy and marketing officer spoke about LINE’s merchandise licensing business, noting that sales of LINE character goods already account for 4 billion yen in sales. He added that the company will be rebranding the character business as ‘LINE Friends’, and they hope to accelerate that business in the future.

7.      Filters, wallpapers, themes and other content

With stickers having finally demonstrated a business model that works expect to see more content extensions to the core messaging experience. There's lots of different content types that can be retailed within a messaging app including wallpapers, filters, themes and others.

Whether this works or not depends on the implementation - there's more to success that shoving content down a users throat but stickers have proven that at least some users will pay so expect more content.  

8.      Platform SDK including in-app purchases

The really big revenue generator are in-app purchases from games which follows the move in casual and social gaming to freemium models where the core game is given away for free and the app monetised with 'extras'.

Messaging app game platforms enable their users to discover and download games and other apps, play against each other and share results and leaderboards. Users can also buy virtual items and purchase extra's like coins, levels, tips, boosts or anything that the user needs to progress in the game.

Korea’s Kakao Talk recently revealed some impressive statistics about the games on their platform:

30 million users have played at least one of their 180 titles 

400 million+ downloads

$311 million in revenue during the first half of 2013

The revenue figures are gross and are shared with the developer and the publisher (Apple App Store or Google Play Store) but they are still big numbers. 

Interestingly developers are not charged to publish their apps nor do they pay for downloads - the whole model is based on free to download with in-app purchases.

In-app purchases though LINE’s games platform contributed 53% ($53.7 million) of their revenue in Q2 2013 so KakaoTalk are not on their own in producing great results from this approach.

Other messaging services are following suit with China’s WeChat, Tango and Kik also offering their own platform SDK’s.

Whether there are enough game developers in the world to publicise a good range of titles on all of these platforms remains to be seen and different users will have different expectations on the game content in their app but nonetheless a sign of the future.

9.       Commerce 

With large communities of users and the presence of brands in official accounts it's likely that mobile commerce will be a direction for ambitious messaging apps to go in.

China's WeChat has the most advanced approach enabling user's to connect their credit/debit cards and their WeChat account so that they can make purchases from within the app. If this sounds a little far fetched then consider:

WeChat already includes a scanner used to read QR codes to help users share their accounts and connect with friends - this scanner has been updated so it can read product barcodes, allowing users to scan barcode and pay for the product from within WeChat

Official accounts can use their messaging to push offers and vouchers based on location directly to a user

Accounts can have their own dedicated mini-navigation created by WeChat so that they can link to their own pages from within WeChat

With many hundreds of millions of users on WeChat there's incentive for merchants to integrate with them and with the direct to consumer marketing possibilities through official accounts it's easy to see new forms of social commerce emerging.  

10.       Music

LINE again. This time announcing LINE Music to come "in the fall of 2013. 

Jun Masuda, LINE’s chief strategy and marketing officer said that LINE Music will not be a separate app but included in LINE’s basic functions. Masuda said that you’ll be able to listen and share with friends too, and the service will not be just for Japan, but outside the country as well.

How easy it is to deliver music remains to be seen as the perennial problem of securing the support of the record labels remains. Playing song snippets and pushing users to pay for a full track download doesn't seem that interesting for users, although Shazam push $300m worth of download revenue per year.

Streaming might work though and the messaging apps are probably well suited to socialising features like playlists, popular tracks etc... We'll see soon enough. 

11.       Other revenues

Call termination – either internationally or terminating calls out of/into the messaging app - seems an obvious route to monetisation for communication services with may tens, if not hundreds of millions of users.

But there seems little appetite for this route. Nimbuzz offer chargeable call termination and Viber are trialling different options on a small subset of their users but these are tiny efforts in the overall picture. 

[mwj-blog]

Worlds first Messaging App bundle — includes Facebook, WhatsApp, Viber, KakaoTalk

Globe Telecom offers the worlds first unlimited bundle with access to the six largest OTT messaging apps plus unlimited calls and SMS for $0.70 per day

Back in October 2012 I wrote about mobile operators starting to offer dedicated WhatsApp tariffs that include data for a small daily, weekly or monthly fee. Although unlikely to have a massive impact these packages make sense for all concerned - the operators get to attract new subscribers and a little data revenue, WhatsApp get yet another distribution channel to grow their service and subscribers get an 'all-in' bundle that is (hopefully) competitively priced.

But as services like Viber, LINE and WeChat have grown it doesn't make sense to restrict these tariffs to WhatsApp only and that is exactly what Globe Telecom from the Philippines have recently announced. They're extending an existing bundle that already offered access to Viber to include Facebook Messenger, Kakao Talk, WhatsApp, WeChat and Line.

The press release states:

"Today, Globe launches Globe Prepaid GoUNLI30, a 30 peso (US 70 cents) bundled prepaid offer which provides subscribers with unlimited texts to all networks, unlimited calls to Globe & TM users, and unlimited access to instant messaging and chat applications Viber, Facebook Messenger, KakaoTalk, and major OTT players without the need for Wi-Fi or additional data charges.

In addition... subscribers who prefer pure messaging apps and want to get access to over 1 billion users around the world can register to UNLICHAT25, which offers uninterrupted use of Viber, Facebook Messenger, KakaoTalk, and major OTT players for only P25, or US 60 cents valid for 1 day, without the need for Wi-Fi."

Good for subscribers? 

They key determinant of success for this offer is of course basically price. Subscribers can access any of these services directly by just paying for their data (or using wifi) so the price has to be good enough for them to choose this bundle.

Interestingly it may be the inclusion of unlimited SMS and calls that provides the price attraction and provide Globe with the majority of it's benefits.  

[mwj-blog]

Tu Me is dead. What now for operators response to voice and messaging apps 'stealing' their revenue?

Telefonica are withdrawing Tu Me, poster child of mobile operators over the top voice and messaging app response

Telefonica have confirmed Tu Me's death. A message on the Tu Me website advises users the service will end on September 8th. Jamie Finn who led Tu Me's development told Light Reading that it's abandoning Tu Me to focus on Tu Go, its app that lets users use their mobile number from any device. 

"We are doubling down on Tu Go since it only makes sense to focus on what is working and our customers are asking for every day," adding that Telefonica had to prioritise "based on "not unlimited engineering resources."

Tu Me is dead. What now for operators OTT app response?

Interesting is what this does to mobile operators efforts at fighting back against the voice and messaging apps that are hammering their revenues. Tu Me was a poster child for operators efforts to develop their own apps and taking on WhatsApp, Viber et al at their own game. Telefonica had Tu Me but weren’t alone with Bobsled from T-Mobile, Libon from Orange, MSNGR from TelCel/Claro (developed by Myriad Group who I work for) and GMessage by Globe in the Philipines. 

These services all face the same problem - mobile users have increasingly chosen their favourite voice and messaging app and once the apps grow amongst their group of friends and family it is incredibly difficult to lure them to a different service. 

The operator backed services can fight back by using whatever leverage they have to make their app attractive – for example making it free of data charges, offering free SMS, including it in post or pre-paid tariffs or simply promoting it heavily to their subscribers - but they're fighting against some very fast, very committed, experienced apps that have already created massive user numbers.   

Telefonica Digital doing the right thing

Against this background Telefonica Digital's decision to kill Tu Me shows that it really does understand the market it operates in. It's mission is to "seize the opportunities within the digital world and deliver new growth for Telefonica" and if Tu Me wasn't growing fast enough and was judged to have failed then it should be killed and resources focussed elsewhere. This is what happens in the real world, but so often not in mobile operators. 

In many respects Tu Me delivered on its promise - it was a decent app, well featured, that worked well - but it was probably too close to WhatsApp et al to be able to carve out it's own niche.

Tu Go on the other hand seems to meet a clearer need where it allows the users mobile number (and their minutes and texts) to be used on any device. This is an extension to Telefonica's core communication service and adds some value to the user- on this basis it may stand more chance of success than Tu Me which was offering different way to communicate.

[mwj-blog]

Vietnam first country to ban messaging apps?

Reuters report that Vietnam's government is considering a ban on messaging apps. The report states "State media said the government might 'ban' free messaging services because of the harm done to network providers."

It goes on:

"The prime minister said the government would "build and promulgate the policies" in managing the free communication services on the internet (Over-The-Top (OTT) services.)"

"We will lose 40-50 percent of our revenue if all of our 40 million customers use Viber instead of traditional call and text," a representative of Viettel Telecom, one of the country's biggest phone network providers, told state media."

Well that's one way to go about addressing the 'problem' of messaging apps.

Not sure how successful it will be but at least there's a plan. Not one that any user, mobile operator subscriber or right thinking capitalist will like but hey, it's a plan. 

[mwj-blog]

LINE and KakaoTalk show how to make a lot of money from messaging apps

One of the obvious questions facing any of the many free social messaging services is what, if any, is their business model and can they earn any revenue from their many millions of users?   

Until fairly recently the answer to that question was unclear. WhatsApp are vehemently anti-advertising but have a revenue model where they charged $0.99 for a years subscription (which could be free for the first year depending on the platform). Other services included advertising but generally the messaging market has focussed on user growth with monetisation coming later. 

Well 'later' has arrived and the routes to monetisation are illustrated by the results Japan's LINE and Korea's KakaoTalk who are both making hundreds of millions of $ revenue from in-app purchases from their games platforms and stickers .

LINE Corporation, the parent company of messaging app LINE, published their quarterly results for Q2 showing impressive revenues for LINE of $101.3 million, up 66.9% from the previous quarter. 

In-app purchases though LINE's games platform contributed 53% or $53.7 million revenue, followed by sticker purchases at 27% or $27.4 million with sponsored stickers and other revenue from brand integrations making up the rest.

LINE's games platforms enables games and other apps to connect into LINE and use the LINE community to share scores, send invites and play games. LINE currently have 33 games available including LINE Pop with 30 million downloads and LINE Wind with 10 million.

Similarly Korea’s KakaoTalk revealed that their own games platform have generated $311 million in revenue during the first half of 2013, up 194% from the final quarter of 2012. These revenues are shared between KakaoTalk, the games developers and a share to the platform provider (Apple or Google) but they're still great numbers.

Kakao passed 100 million users in July 2013 and says that 30% of its users have played at least one game. Games that hook into Kakao Talk are estimated to have passed a cumulative 400 million-plus downloads.

[mwj-blog]

TelCel MSNGR shows how to compete in messaging app market

There's a lot of competition out there in messaging app land. WhatsApp is very strong in most markets where it operates and there's a lot of regional variation where individual apps dominate a market, for example:

LINE in Japan

WeChat in China

KakaoTalk in Korea

But there's obviously still room for growth as many essentially undifferentiated apps are also growing fast - Tango, Nimbuzz, Kik Messenger, Voxer, MessageMe, GoSMS Pro among many others. And that's before we consider iMessage, Facebook Messenger, Skype and BBM. 

So the question is how do apps compete against that lot? Well TelCel and Claro shows how one major mobile operator group is approaching it. 

TelCel and Claro MSNGR

Firstly smartphone market penetration in Latin America is large and growing fast. For example at the end of Q1 2013 Vivo, Telefonica's brand in Brazil, had 10.2m smartphones, up 78% year-on-year. Nonetheless as a proportion of the overall subscriber base smartphones remain relatively small at 14% although again, growing very quickly. 

The opportunity for brands like TelCel and Claro is to join in the landgrab for users before WhatsApp, LINE dominate. And that's where Messenger comes in (branded as MSNGR and developed by Myriad Group who I work for).

MSNGR has a series of features and benefits that are targeted at the Latin American market, some of which are difficult for OTT messaging apps to replicate. For example:

Completely free of all data charges

Includes free SMS to send and receive to non-users 

Mobile browser version to engage with non-smartphone owners

Wide coverage of smart and feature phone OS - Android, iOS, Windows Phone, Blackberry, J2ME, HTML and Firefox OS

Comparable features

The main user benefits are of course that it's completely free to use. Not just free of premium charges where the user has to pay for data traffic but completely free - with no data charges. An XHTML browser version that can be used on any feature phone enables users to engage with all of their contacts whatever their device, helpful in a market where smartphones are still relatively limited. Together this makes MSNGR an attractive service to users in markets where ARPU is low but users have the same demand for services that they do in markets with higher smartphone penetration. 

With TelCel and Claro putting their marketing might behind MSNGR to drive awareness and uptake by using their usual marketing channels - SMS campaigns, broadcast, posters, online, social etc... - MSNGR really should fly even in the face of competitors like WhatsApp and LINE.

What do TelCel and Claro get out of it? 

TelCel and Claro are basically trying to build a massive community of users in advance of WhatsApp et al growing in their markets so that they can control their own destiny. They may cede some revenue by offering a free service but with the users on their own service they can control how they approach and monetise this. With users tied to other services TelCel are reduced to the role of the access provider with less influence.  

As the community of users grows TelCel and Claro can also benefit from different revenue streams such as:

Display advertising 

MO SMS - which is charged at a small premium

Content revenue from stickers, wallpapers etc...

In-app purchases from games platforms

All of this of course depends on MSNGR holding it's own against the competition, in particular the mighty WhatsApp and the fast growing LINE. TelCel will not back a service that is reduced to a bit part player so we'll be watching the growth of MSNGR closely.