TLA is a Three Letter Acronym. They are all over the marketing and business world. Often times, people just assume that everyone knows what they are talking about when they throw out acronyms. However, NFC is one that is starting to gain traction and in 2012 we will most likely be hearing more about.
So what is NFC anyways?
NFC stands for Near Field Communication. NFC technology allows for simplified transactions, data exchange, and wireless connections between two devices in proximity to each other, usually by no more than a few centimeters (Wikipedia.org).
The biggest use of NFC technology that will impact consumers is that it will be working in conjunction with mobile devices to exchange secure data in a variety of applications. Here are some applications and recent examples in the media (click on the link for further reading):
- Blackberry announced that the BlackBerry® Bold™ 9900 and BlackBerry® Curve™ 9360 smartphones have been certified by MasterCard Worldwide as PayPass-approved devices
- Dutch Banks and Carriers to Launch NFC in 2013
- Google has heavily invested in Google Wallet – a mobile payment system using NFC technology
- McDonalds, Starbucks, Subway and other big retailers have tapped into NFC payment options
3) Keys (house and car)
- In Japan, McDonald’s has successfully been using NFC technology not only for mobile payment but as a channel to distribute coupons and special offers
- Proxama delivers first NFC marketing campaign in UK for new X-Men movie
- Nokia teams up with Angry Bird to create Angry Birds Magic an exclusive game for Nokia users that uses NFC technology
- Proxama launched NFC marketing campaign at a number of Vox cinema foyers in Dubai
- Foursquare add NFC check-ins
If this technology takes off and there is mass adoption, there will no longer be a need for a wallet and keys, instead only a mobile device. Three important factors that will influence adoption – access, ease of use and security. Access – mobile devices need to have NFC technology. Right now, there are only a few mobile devices that are NFC enabled. Ease of Use – NFC technology applications must be simple to use, easier than what is currently available. Security – NFC technology needs to be proven safe and secure in order to build trust.
There are definitely doubts and controversy surrounding the success of NFC:
How will NFC technology be used for marketing?
On November 30th ABI Research released a report that stated that mobile marketing will benefit greatly from NFC technology with the use of NFC tags for smart posters, marketing, loyalty, information, content, social networking, gaming and validation (ABI Research: NFC Tags).
Push Marketing versus Pull Marketing
Most consumers are familiar with push marketing. Push marketing is when the marketing message is placed in front of the consumer. The marketer controls when and where the message is seen – for example billboards, emails, internet pop-up advertisements, cold calls, etc.
Pull marketing is when the consumer needs to get (pull) the information – for example visiting a website, clicking on an advertisement, reading an online blog, etc. NFC technology when used in marketing follows a pull marketing strategy. For example, with smart posters that have NFC tags, the consumer uses their mobile device to tap the NFC tag to get the information. This means that there needs to be some reason that the consumer wants to voluntarily tap their mobile device to the tag and pull the content from the NFC tag. Marketing with NFC technology is more active than passive. With this strategy, the consumer needs to believe that they are gaining value.
A marketer engaging in NFC technology must clearly 1) Define their target audience, 2) Understand their needs and wants, and 3) Be open and adaptive to real time feedback. NFC technology can serve to build brand loyalty and stimulate word of mouth within a targeted segment. Peer to peer word of mouth is one of the strongest forms of brand validation. NFC technology also encompasses the ability to tap information mobile to mobile, making it very easy for a target market to share information.
Some people believe that push marketing creates short term gains and pull marketing creates long-term loyal customers. While others state that there is a need for both push and pull marketing strategies to gain and retain customers. With NFC technology and marketing, a bit of both will be required especially in the onset, as customers are adopting the new technology.
NFC technology will have various applications in the future. This technology can work in conjunction with: loyalty programs, couponing, one time offers, etc. It allows marketers to more closely analyze and react to their consumers in real time.
The Future of NFC Technology
It will be interesting to see if and/or when society will become completely mobile. Not too long ago, the idea of paperless books seemed like a far off notion. Today, it is a reality. Digital photography is the norm and not the exception. Offices are moving to paperless. I am sure when credit and debit cards were introduced there was a lot of skepticism and fear. Not everyone is comfortable being completely cashless. However, the value is there and mass adoption has taken place. Marketers will need to adapt to the changing playing field and create strategies and tactics that are adjustable to mobile times.