The head of Mood Media Australia, Steve Hughes, discusses the concept of experiential marketing and the clever ways businesses can revamp their in-store experience for their customers.
“Recent studies show about 58 per cent of people with a smartphone have used their smartphone to buy in-store,” says Steve.
With many Aussie retailers – and other businesses – struggling amid intense competition and online transactions, giving customers cause to walk through your door has never been more important.
Speaking on the My Business Podcast, Steve explores a range of issues on how SMEs can improve their customer experience offering, the thing businesses most commonly get wrong in their messaging at the point-of-sale, and how low-cost technologies are revolutionising the buying experience for the modern consumer, plus much more!
Enjoy the show!
Adam Zuchetti: Welcome to My Business Podcast. It's Adam Zuchetti here. We've got today an interesting business and its managing director in. So rather than what we usually get in an SME and the business owner themselves and pick their brains on their business and how they operate. But we wanted to get this person in today to discuss the field in particular in which his business operates.
So we've got Steve Hughes who's the managing director of Mood Media Australia. Steve, who are you going?
Steve Hughes: Good, thank you Adam.
Adam Zuchetti: Thanks for coming in and talking to us today. So get us bit of background. What exactly does Mood Media do?
Steve Hughes: Mood Media helps brands to connect with their customers. We created the background music industry some 80 years ago and today we continue to work with clients to enrich their customers' experience. We do this through the use of sensory branding. Sensory branding campaigns include the use of music, visual, sent, and mobile marketing applications. The solutions that we deploy are generally done at the point of purchase, so in the premises where the businesses operate.
Adam Zuchetti: Okay. So you're not actually talking about ad campaigns and things like that that go out on TV. It's actually the in-store experience.
Steve Hughes: Absolutely, yes. It's everything in store. So anywhere that has a public place, basically visiting. Lots of, obviously, retail stores that we supply to, hotels, gyms, and the like.
Adam Zuchetti: How many customers would you roughly say that you've got across Australia?
Steve Hughes: Across Australia, we serve over twelve thousand businesses across Australia and New Zealand.
Adam Zuchetti: Twelve thousand. That's a lot.
Steve Hughes: Well, global it's a lot more. We supply to over six hundred thousand businesses globally. And I suppose one interesting fact that you may find interesting, we actually, if it was measured, we would probably be the number one radio station in the world through the services we provide globally.
Adam Zuchetti: So exactly what kinds of things ... You're sort of dealing with music in the hotel lobby, for example? That kind of thing?
Steve Hughes: That's a good example. Yes, we supply a combination, really, of music, digital signage, so digital screens that you might see around a place nowadays, far more than we ever use to see of course, and also a combination of maybe some in-store messaging and now I think more than ever the use of mobile technology as well, which I can probably talk a bit more on later on.
Adam Zuchetti: On the music front, I'm just curious about how you convey the value of your services instead of encouraging the business to just sort of turn on the radio or something like that. What do you actually tell your customers that you offer in that space?
Steve Hughes: Yeah. The idea for us when we talk to brands is to ... We ask them several questions and the first question might be what do you want your brand to sound like? But just putting on a radio station, quite often you find a lot of repetition in songs, for a start. And the songs that may play from the radio don't always fit with that brand and what the brand should actually be playing.
For example, we asked the brands who are your customers? So obviously identifying some of the demographics they may have; maybe female skewed or male skewed, certain age groups for example, and from that you start drilling down into the type of music that may be relevant to be played in the business premises.
Adam Zuchetti: Okay. And then you were talking about mobile technology. So what exactly are you doing in that space?
Steve Hughes: Yes, so lots of people use their smart phones now. In fact, recent studies show about 58 per cent of people with smart phones have used smart phones to buy in store. So we've partnered with Shazam to provide a service, which is quite unique. It revolves around beacon technology. So if you're in a store, you want to engage with the shopper in the store and you can do so by I suppose sending a message to their phone somehow. Now most people don't like to have too many apps on their phone as I'm sure you understand.
Adam Zuchetti: Mm-hmm, yup.
Steve Hughes: Whereas Shazam of course is on most people's smart phones. In fact, I think it's present on nearly close to 80 per cent of people's smart phones. So if you walk into the store, you've got Shazam app there. Generally you'd have a call to action. So you walk into the store and they'd say 'Shazam in store today for an offer of sorts.' Generally an incentive is a good way of enticing a customer to do something. So you might say 'Shazam in store for a discount.' And they'll Shazam a song in store and through our audio devices there's an audible watermark that is basically pushed out to the store and that will bring up the track that is playing as the Shazam app would normally do. But in addition to that, and the important thing is, it will actually also push out some marketing content specific to that store.
And it can be quite targeted to the customer. So whatever marketing campaign the retailer wants to deploy we can take that content and push that out to the phone. A good idea would be the use of a coupon, for example. Which they would then go to the counter with the good that they're purchasing and get, say, 20 per cent off, that kind of thing. So it's a fun way of retailers engaging with their customers in the store whilst they are actually walking around and purchasing goods in that store.
Adam Zuchetti: It must be quite trackable to, the return on investment of putting the campaign together, because then you can actually see in really time whether it's having an effect or not.
Steve Hughes: Absolutely. So you can actually track basics stats in terms of the customers that have come through. And as you say, they've actually taken up on that offer.
Adam Zuchetti: Well, off the top of your head, do you have some kind of statistic of roughly the kind of proportion that you do get a conversion from those kind of campaigns?
Steve Hughes: It does vary. A lot of it will depend on how, obviously, the overall campaign is put together. If it's put together well and you have a good call to action in the store, then it comes up as quite a high percentage of uptake. If it's kind of silent in-store in the sense that people may Shazam or may not Shazam, of course it's a lot lower.
Adam Zuchetti: So when you say high percentage, are we talking sort of 60 per cent, 80 per cent towards the 100 mark?
Steve Hughes: More between the 60 and 80 per cent would be a fair go, yeah.
Adam Zuchetti: So in terms of one that may not be so good and doesn't deliver that kind of return, are there usually key things that the business is getting wrong in their messaging that come through and you can recognise that quite easily and fix that easily?
Steve Hughes: Yeah, like I said, I think the key thing is always... It's the combination of signals and...if you walk into the store, you need to be aware of the offering the first place. If you're not aware of it, you're not going to be engaging in it. And I think this comes down to the whole omni-channel marketing that is now taking place where retailers that do it across the board really well will engage their customers and connect their customers to the brand because they'll push the messages out consistently across all forms, whether it's on websites, whether it's through adverts, and bringing those messages in to the store. The more that retailers can do that, and then I think more effectively they can engage with the customers in the store as well.
Adam Zuchetti: This sounds like something that's actually really expensive and big budget and I know that you work with a lot of our bigger retailers. You were saying that a lot in the West Farmer's Group for example, Buddings, came up, those kind of retailers. But do you work a lot in the SME space as well?
Steve Hughes: Yeah, we supply to many SMEs as well as large retailers. I think your point about cost is a very good one. I think technology nowadays has got to the point where there aren't too many excuses for the small end of town to play the game as well. And what I mean by that I suppose is cost of, for example, an additional screen, is far more affordable now than it would have been say five or ten years ago.
Adam Zuchetti: Yeah, definitely.
Steve Hughes: And there's no reason why a small trader, small business can't invest in such technology to promote their brand as well as a large retailer.
Adam Zuchetti: So what are some of the smaller businesses that you guys actually deal with?
Steve Hughes: We tend to deal with quite a lot of franchise based stores. We'll also supply, obviously, into smaller one off cafes and restaurants; that kind of thing as well, some small gyms. Some examples of a couple of names, I suppose, of clients, that we deal with on a franchise base; Amcal Chemist have recently taking our audio messaging services and they have something called Amcal Air radio station with some messages that goes into store. We deal with some quite iconic Australian brands such as Crocs and R.M. Williams. We also supply into quite a few gyms and into grocery, Harris Farm Grocery, for example, which would be small as compared to larger into town that we also supply to such as Woolworths.
Adam Zuchetti: I want to come back on the big end of town and dealing with those large companies because obviously payment terms is a really big issues and SME in particular struggle with this. But I'm interested in hearing your perspective and with all of the big companies that you guys deal with, do you actually really struggle to have them pay on time?
Steve Hughes: To be honest, we don't. I think with retailers, they're a cash-based business, obviously, their financials are driven quite differently small to big ends. The big end of town may take a little bit longer to pay, but we don't have any really problems with any of our customers paying, thankfully.
Adam Zuchetti: Well that's good, isn't it? The other thing I really wanted to ask you, Steve, is about the concept of experiential marketing and we were talking a little bit about this off air. And you were saying, 'Look, I think it's actually been around a lot longer than potentially the term as a buzz word or a buzz phrase.' Can you talk me through the evolution of the customer experience and how that's evolved over the time, particularly in your fifteen years in the business? How has it really evolved over time and why do you think the businesses are really now focusing on this a lot more than they have previously?
Steve Hughes: You're right. The term itself is a bit more buzz now than it used to be, but businesses have always tried to, I think, engage their customers to try and give them a good experience. Even going back to the 1800s where the first department stores used to, obviously allow people to come in and touch and feel the clothes and changing rooms were there. It was trying to make the experience as positive and as easy as possible for consumers. And that's still the case, obviously, now. And I think it's, in the fifteen years I've been there, I think that what's happening is that it's becoming more difficult to differentiate yourself in the marketplace. I think that Australian retailers have certainly had to wake up a little bit in terms of the global retailer from overseas coming into the market space that previously hadn't. And they're bringing along I suppose the learnings that they've had from the markets overseas that tend to be a little bit more competitive over there, and they're bringing those learning into the Australian market.
So the Australian retailers are waking up to that and actually investing more time and effort into making sure that the customer experience is as good as it can be. And that's across the board; from the service to the look and feel and the atmosphere of a place. So customers really want the excuse to go into a store. You can obviously buy online now pretty easily so why do people go into a store? They go in there for an experience. They go in there to touch and feel, to communicate with people, and hopefully to, obviously, have a fun experience.
That's a bit of a long winded way of answering your question, I apologise, but it's certainly... I think the main thing is I think the customers re trying to differentiate themselves as much as possible now.
Adam Zuchetti: Okay.
Steve Hughes: And becoming and selling your brand is probably one of the most important things I think that the retailers and businesses themselves now need to really identify their brand and customers and connect with their customers as much as possible.
Adam Zuchetti: So it's interesting that you're saying that businesses have always really tried to do this. But when we were chatting just before we came on air, you mentioned that you think there's a lot of things that retailers still aren't doing in this space. Can you talk me through what you think they actually are and why you don't think that they are going into those places?
Steve Hughes: Yeah, I think the use of technology and the mobile marketing applications that exist could be more heavily used in-store. I think there's still somewhere to go for retailers to fully grasp what they're trying to do in the store in that space. Some of them, I think, will be trying things and some are trying things I'm sure quietly as well. And that's a key thing, you should always, obviously, trial any sort of implementing product. Any implementation or platform should always be trialled. And you can see the likes. I think Myer, for example, recently had a catwalk display where you would be able to hold your phone up and see the model walking down the catwalk and then details of what they're wearing would come up on the phone.
Adam Zuchetti: Okay.
Steve Hughes: So there's thing like that happening in the space, which are very exciting. And I think that there's lots of those kind of mini trials of projects taking place, but what we haven't probably seen is a full scale implementation of those types of things across all the stores that a particular retailer, for example, may have.
Adam Zuchetti: Do you think that's just because of the perception of cost? Particularly at the smaller end of the business scale. Or that a lot of retailers don't realise these kind of technologies exist and they could adapt them for their own uses? What do you think the fundamental reason is behind it?
Steve Hughes: Yes, there could be certainly a fear of potential costs and sometimes something new is actually more costly than if it's obviously not new because new invariably means that some RND that's being paid for along the way. Having said that, a lot of the technologies that exist there are not actually that expensive to employ. And the reason why maybe they're not doing so could be potentially that they don't know or aren't full aware of those things. As we know, running the business and so many things on the day-to-day basis to think about just in basic logistics and [inaudible 00:15:26] retail is a touch industry to be in and providing goods and services generally across the board is pretty hard and it's looking outside, looking above the trenches, as it were, to see what's out there. And it's a pretty hard thing to do.
But I think that what's happening is that there's a push for that to be happening because if you don't get on board and try to differentiate yourself, then you are going to be struggling to be noticed in the crowd and if you lose track of your brand and what you represent and as we've seen recently are some retailers that have struggled in that space and they may not survive. So I think it's ever more important now to get the head up above the trenches and have a look out to see what is out there.
Adam Zuchetti: Yeah, it is very tough in the retail space. There's been so many high profile retailers go against the wall. Is it a worry for you? For your own business? That retail is struggling so much and across so many different retail sectors? It's not just clothing or one particular kind, it seems to be quite broad across the retail sector. Is it a really sort of worry for you dealing specifically, I suppose, for the retail industry?
Steve Hughes: I suppose we'd like to say it's an opportunity as more than a worry because we'd like to think that that's –
Adam Zuchetti: If everything's hunky-dory, you've got nothing to do.
Steve Hughes: Well there are the services we can help and provide retailers to differentiate themselves and that's what we do; we provide that. We help them more identify their brand in-store and I think that looking at some of the brands that we're talking... You mentioned some are running against a wall. I think maybe some of those haven't maybe done that so well. But we see it as an opportunity to really sell our services and help them and we'd like to think that because of that and the competition hotting up, we would probably get more knocks on the door than ever.
Adam Zuchetti: What kind of proportion of the business that you bring in is a retailer coming to you saying, 'I specifically want this but don't know how to implement it' versus a retailer coming to you saying, 'Look I want to do something in this space' and you providing all the ideas and inspiration behind it? Is there a decent split between them or are they really sort of heavily slanted one way or the other?
Steve Hughes: I think that we tend to have conversations with many marketing departments and there are customer experience departments as well. They'll have some ideas themselves, generally speaking. And we will work alongside them to bring some of their ideas to life. What we tend to encourage is to try something out quickly. You may not have to do everything all in one go, so it could be a step by step approach. In doing so, you can get something up and running pretty quickly. And that thing gains momentum and then move to the next stage. So it's quite a consultive process.
Adam Zuchetti: Okay. What's the coolest thing that you've actually seen out there in the market place? You were talking about the Myer Fashion Show, that's quite different. But is there anything that's been really stand out in your mind; you think wow, we produced that, really proud of that, it had amazing results for the retailer and everyone's talking about it because it is something really different?
Steve Hughes: I think one of the things I've seen with one of the brands we work with, I don't think we can take claim to them doing it, unfortunately, but I think, it's actually Mya again, I'm mentioning it twice, I should get paid by them. If you remember Christmas time, if you went to the Sydney store at Myer, there was this giftorium that they did?
Adam Zuchetti: Yeah, I did see that actually.
Steve Hughes: So you get into the lift and you're taken up in a spaceship across the Sydney sort of skyline as it were and you come out and there was a lot of energy up with all the Christmastime and large, huge toys and music and a bit of live entertainment going on. And I suppose, yes, we helped supply the music for Myer in the store that would always help that, but I thought that was a really good, fun thing to do and it captured the imagination for a lot of people. Obviously Christmas is a great time to do that.
But I think that those kind of things are always good to try and do. They may not always potentially have a return on investment that you see straight away, but they're memorable events and I think that's the kind of thing that connects customers to brands is those memorable events. It's not always that pure return on investment that you need to be thinking about.
Adam Zuchetti: Yeah, that's a really strong point. Particularly with our audience being SMEs, they're obviously so close to customers and wanting to maintain those relationships. And it may not always be a direct sale, but maintaining that relationship for the longer term. What kind of advice would you give to SMEs about the space you operate in and really trying to maximise the efficiency of the customer time in store?
Steve Hughes: Yeah, I suppose the advice is always try to be a little bit different and don't be scared of trying something completely different. As I say, it might not have and ROI on it, but it does engage the customer and gives them a memory. There's a million answers to that; there's a million businesses out there. I think from an SME perspective, like I said before, probably the cost of trying to something with technology isn't as great as it used to be. And that gives, I think, small businesses the opportunity try things that maybe otherwise they wouldn't have thought about doing. It would've scared them in the past. So I think that's a great opportunity to think about that.
And, as we discussed off air just prior, if you've got a small business that has a passionate entrepreneur running that business in the store, it oozes that entrepreneurial feel and through the walls of the premises that they're operating from, trying to replicate that across more than one store is probably the secret and the key. But if that can be done, can you really have an engaging atmosphere experience, people will come back and they will spend more money with you. And they won't think twice about doing that because they love being there.
Adam Zuchetti: So I guess you're kind of saying don't be afraid it to do some research, go and see what's available and actually cost it because it might not be as prohibitive as you first realised or first think.
Steve Hughes: Yeah, absolutely. I think everyone knows nowadays with apps on the phones and apps just generally, the cost of engaging and getting involved in that is sometimes quite minimal and we often speak to customers with all sorts of ideas that they may have and some are crazy and you think 'no, that's never going to work' and sometimes we can help, sometimes we can't. But I think some of the crazy ideas also work as well.
Adam Zuchetti: The crazy ones are often the best ones.
Steve Hughes: That's right.
Adam Zuchetti: Well, I think we're running out of time, but thanks for the insight Steve, that's really good, really useful.
Steve Hughes: Thank you very much.
Steve Hughes: You can find us online, you can go to moodmedia.com.au. I wasn't expecting to be answering that question, sorry. I was about to say give me a call on my mobile, but maybe that's not a good idea.
Adam Zuchetti: Yeah, broadcast your mobile to a few thousand viewers.
Steve Hughes: I would go online and you'll find us easy enough for sure.
Adam Zuchetti: Yup. All right, fantastic. Or come through to us by email and we can forward anything on to Steve. Until next week, we'll see you then. Okay. Bye.