The analogy I’ve often used to describe the mobile industry is that of trying to build a solid foundation on molten lava. It takes the brave entrepreneurs you’ve come to meet on UNTETHER.tv to start building before the crust is strong enough. This is another of those stories and one that offers so many lessons I would sit with a pad and pen close by while you watch it.
The first time I sat with David Rush was just over a year ago when his company was called EvzDrop with a focus on building a consumer-facing app-based company. Jump forward to today and David has refocused as a business to business company helping them use context (a combination of mobile and social and location and time of day) to find new business. Essentially he’s brought his company from fighting to become a brand to focusing on being the plumbing for his customers. Plumbing in this industry is good. The noise is so concentrated at the app level, the best way to move a company forward is to be one that helps others build their brand and their revenue. Plumbing = good in mobile.
This entire episode focuses on the transition, the challenges, the reasons he made this difficult mid-air correction (my favourite part is when we discuss the process he went through to determine change was necessary), how Earshot helps their customers and his take on the readiness of the market for what his company now offers.
Key takeaways from this episode. Click on the link and the video will take you to that clip
Rob: Hello everybody and welcome to UNTETHER.tv. I’m your host and founder, Rob Woodbridge. Just over a year ago, last October, that’s October of 2012, I sat down with David Rush who was the founder of a company called Evzdrop at the time. We had a great conversation about location-based marketing and place versus space and place versus the user, it was a great conversation, and here we are a later sitting down with David again.
This time he’s done a pivot with his company and they’re now called Earshot at Earshot Inc. We’re going to find out what happened in the last year. I think this is all part of the everchanging mobile location-based marketing world that we live in right now that you can’t be too attached to your ideas or your company in this instance. So we’re going to find out what happened.
We’re also going to find out what is Earshot, how you can benefit from using Earshot or leveraging Earshot, how you can benefit from all of the technology that David is building out. But first I’m going to bring him in. David, welcome, thanks for coming back.
David: Thanks, Rob. Good to see you.
Rob: I didn’t scare you away last time with our conversation?
David: No, no, no, we had a good chat. I’m glad to be back.
Rob: I like doing that. I like doing this a year apart simply because people don’t remember. It’s like childbirth, like, “Hey,” a year later, “Let’s have another kid.” “What are you crazy?” And then soon it just drifts back in, the reasons why you shouldn’t have come on, and you decide you’re not going to do it again next year, but I’ll have you on next year and you’ll be like, “Hey, thanks, I can’t wait.”
David: I’ll pencil it in.
Rob: Yeah. So you’re in Chicago. So first of all, what is Earshot? Let’s get through that and then I want to talk about what happened with Evzdrop.
David: Sure. So Earshot is an evolution of Evzdrop and we can chat about how that evolution came to be, but we are a proximity- based engagement platform. Essentially we are looking to intelligently filter and present engagement opportunities to brands that are interested in connecting with people based on where they’re standing at any given time and obviously where they’re authoring social media posts.
The idea being those that people within Earshot of designated locations have a higher propensity to convert, transact, and oftentimes those locations have contextual relevance. So an REI or a North Face is interested in people that are at Yosemite or in Vale or hiking. And so by understanding where people are standing, we can bring more meaning behind the way in which you can find clever ways to engage people on social media and really identify ways to create earned media which, today as we see happening with examples like I think it was America West or whatever this week and . . .
Rob: WestJet, yes. That’s a Canadian company up here.
David: WestJet, excuse me. Yeah. It’s obviously the most authentic impactful form of marketing there is. We believe that, although advertising has its place, location-based advertising can be stale to a degree and if there’s ways to enable more clever conversations with people that were unsuspecting, that can lead to higher [inaudible 03:16] revenues as well as we’ve got some ways to help decrease costs as well.
Rob: You must love when these guys, these big companies, come up with these kind of campaigns that really articulate in really an emotionally impactful way the business that you guys are in.
David: Yeah, and I think it really boils down to what the consumer is looking for from these brands. You like at Dollar Shave Club and what they were able to do and you look at the best brands out there today, whether it’s Lululemon or Apple or Zappos, and what they’ve done is they’ve kind of redefined the rules for customer service where it’s not just being [inaudible 03:49] anymore, it’s about being proactive and it’s finding personalized ways to communicate directly with people that are meaningful.
And it doesn’t mean that you send them a location-based ad based on the fact that they’re a 30-year-old male and they like sports and so they should be getting ads that correspond to that. It’s knowing that that particular person follows all of these brands on Twitter and they happen to be at this arena a week ago and they happen to like these brands on Facebook, and that [inaudible 04:21] who that person is and then where they’re standing adds just a whole different dimension on there again, the probability of a transaction of some kind or a deeper emotional connection to a brand based on the type of communication that’s sent to them.
Rob: Is it hard to sell this now? Because a year ago, we talked about this a little bit and we’ve seen this market emerge and I think that the level of knowledge that is now fluctuating through the industry is increasing at a rapid rate. But even as early as a year ago, and on this podcast I deal with the [Azid Khan] from the Location Based Marketing Association, we’re always stunned by sometimes the lack of adoption or the lack of confidence in this kind of technology. Is it getting easier to sell?
David: I think there’s two parts to it. I think on the one hand, consumers’ desire for privacy hasn’t changed, and people’s expectations of not being creeped on are resilient, so you have to find ways in which they would feel like it was acceptable to communicate with them, and I think that’s becoming better understood by the individuals at the brands that are being tasked with this, whether it’s the community managers and their teams growing, or the customer service people that are understanding how to communicate in 140 characters or less, [inaudible 05:43] Twitter for a customer service issue.
I think it’s beginning to grow, and I think every brand is looking for ways, because it’s so logical, to use location-based information to effectively engage and bring people in store. I think, as you said, there’s a lot of different stories out there and a lot of different approaches to it, but I do think that it will never change that privacy has to be respected, with the consumer, or it’ll backfire.
Rob: The last couple of years, what we’ve seen, especially on the social media side, with social media and mobile, this convergence. Social media has landed on mobile with a huge blast. We’ve seen this over the last couple of years, Facebook and Twitter certainly the dominant platforms in that space, but dominant in mobile as well.
But we saw, early on in the days, that there was a consistent pitter- patter of social media activity, so you could say something about a brand, and the brand would respond. Sometimes they never got the sentiment right. You can be angry at a brand, but they will come back and say, “Hey, thank you for talking about us!” They don’t understand the context. It’s a pitter-patter activity.
We’ve seen these recent examples around the Olympics in Sochi and certainly this WestJet activity, where it’s event-based. It’s destination-based, almost. They’ve got people in an airport and they do this on purpose, and they put a lot of effort into building this one event, and two days later, it’s done. Is there one that works better than the other, or do you have to have a consistent pitter-patter of activity and then be able to do these big events like WestJet did?
David: Every brand looks at it differently, and I think you want to space out surprises so they truly become surprises. It’s the “surprising the light” trend that can continue to grow that more and more brands are seeing as a real strength, especially with social influencers, people that they know do have reach. They want to find ways to connect with them.
There’s also this continuous stream of opportunities that are happening in and around locations, and specifically for retailers that become really compelling opportunities for engagement. We ran an independent test of a major retailer.
We set up a geofence one block in every direction from that retailer and gathered data with a course [inaudible 08:27], and during that time, we found that over 90 percent of every social media post did not carry the appropriate Twitter handle, but more importantly, it didn’t even carry the brand’s name. It didn’t mean, though, that there weren’t posts that had words like, “sale,” “shopping,” “shoes,” “looking,” [inaudible 08:47], indicators that could have presented opportunities for this retailer to connect with in a contextual way and drive in the store people that may have been thinking about buying. Again, I think from a continuous perspective there’s a lot of opportunities. Event-based, it’s pretty straightforward.
Rob: It is, and it’s usually done for impact right away, isn’t it?
Rob: I’ve got a whole bunch of questions about how people can start the best practices, so I want you to start thinking about the best practices, or two, three, four things that people, businesses, should be doing in this space to be able to leverage location, context, history, social networks. I want to talk about this one statistic that, if you’re a business person listening to this, which you are, that statistic that’s on your website that says customers who are engaged with a brand through social media spend 40 percent more than other customers who do. If you’re a business person, you’re trying to figure out the why, there’s the big why right in front of you, and I want to come back to that.
I do want to understand how Earshot is the evolution of Evzdrop. I love the play on the name is Evzdrop is really which, and maybe that has something to do with the privacy piece, right? To where you’re like, the connotations of Evzdrop versus within Earshot. So, when we talked a year ago, you were fully ensconced. Evzdrop was going, we had a great conversation. I loved the fact that you were going after customers, revenue was important, you understood your needs, you understood what you were doing. Walk us through what’s happened over the last year.
David: Sure. Yeah, well when we launched Evzdrop, we were focused on building our own network, which required that a consumer hear about Evzdrop, download the app and when they had an inspiration from a specific place, be the voice of that place by authoring what we were calling a drop, which was our version of a post. And we’d give that user the flexibility of posting it to Twitter and/or Facebook. We also gave them the flexibility of being anonymous, which were sort of key features.
We knew going into our project that, in order to grow an independent network, a new network, a lot of things were going to have to go right and we didn’t go into it naive. But we knew that we had to take a crack at it, and should we achieve that escape velocity and growth to build our own network, there were a lot of interesting ideas that we had in our backlog that could have been realized.
We had modest growth and we had some great successes. We won a couple of awards and we were proud of what we achieved with Evzdrop and we also always intended to build a real business around this and it was a strategy that went from B to C to B to not pure B to B. There is no consumer dependency other than the Tweet or Instagram post who is tagged with a Foursquare check and is tweeted. We will use other proximity validators in time to be able to know where posts are coming from, but the user never really has to know that Earshot exists. It’s working behind the scenes, it’s a platform for our clients and, so from a name change perspective, Evzdrop was really well received from a consumer perspective. Everybody is a curious person who eavesdrops naturally.
As we started talking to bigger brands who loved the concept of connecting within real time, most people that were in the midst of an experience with their business or brand, we heard more than once that they were going to struggle with the idea that they were going to Evzdrop on their guests or customers. And we knew that if we were to move to a B to B model, this could present some issues. So, we spent some time going through the process of coming up with the right name, and frankly, Earshot, funny how these things work out, it’s really worked out much better for us even than Evzdrop. It’s easier to spell, frankly.
We believe that it can represent who we are today and then it can represent who we want to be longer term as well. So we feel glad as far as a brand pivot is concerned and we’re, through [inaudible 13:00] we’ve got and, again, the other realization, and it wasn’t something we didn’t know going into Evzdrop, but we also knew that these other social networks had obviously done the heavy lifting and had established millions of millions of users that were consistently using their networks. And why not use that as the catalyst to enable what we had always imagined, which was a real time communication channel that we wanted to empower these brands with, with people that mattered, not based on their loyalty status or just their Klout score but based on where they were standing. And so that’s what we’ve been able to do now by using tweets or Instagram posts as the catalyst rather than having to expect someone to author in our own app.
So, long-winded answer, but that was kind of the way it all unfolded and we spend most of our summer rebuilding a lot of parts of the platform and we were thrilled to kind of have version one of the project launched a couple months back. And had a successful case study, a test that was run about a month ago, and we’re in the process of activating a lot of new client sales we had over the holidays.
Rob: I love that. I think that this is probably emblematic of a lot of other companies that went after the consumer first and kind of looked at it and thought realistically about it and thought like a real business would, that maybe this approach direct to the consumers, it’s a very challenging thing to do when you’re competing against the other people that are feeding the networks, like Facebook and Twitter and want to leverage their network effect.
But I want to know, did you have an idea of growth? When you started Evzdrop, and you were thinking, listen, we want traction. We want to get good traction. Did you understand what that meant before getting into it? And did you have a threshold? Was it like, it was March, and you realized that you weren’t getting the traction that you wanted to do, so you were willing to call it quits at that point?
David: Yeah, I mean, we had created a model that had certain assumptions in it on month over month growth in users. It’s such a tough one to pin down. I think you’re looking for a consistent virility to the whole thing that has a few different formulas that you can look into, but I think, I’m trying to remember who described it best and I think it was Dennis Crowley, that we knew we had something when people that we had never met before were telling us how amazing this was.
I think a lot of it, too, was just listening to people, and we had certainly a group of folks we didn’t know who thought it was really cool and interesting and there were so many dependencies to get it right. We knew that mother time was not on our side unless we were to make a quick move, and frankly my background was always B to B, and was always enterprise related relationships, and it’s what I’ve always known well.
Again, the original vision included ultimately monetizing what we were doing with Evzdrop directly to the enterprise, and so in the back of our minds, we always had said if we didn’t get this where we needed to get it to quickly enough, we wouldn’t be the ones who were trying to fight against the tides that were clearly working against us. We would adjust.
I think that’s the key to the pivot. I think it’s an overused term, because everybody speaks about it, but a lot of mature guys and a lot of astute board members will say that some of the best startups will go through at least one to two pivots. If you have four or five, that’s probably a problem, but if you have one or two and then maybe one or two small ones, it’s a really productive thing, because you’re keeping your mind open. You’re keeping your ear to the ground. You’re adjusting to what the market’s telling you, and you’re not stubborn about understanding what you have or you don’t have.
Rob: How do you know, though? Because I’ve met a lot of entrepreneurs, I’ve done a lot of episodes like this, I’ve met a lot of people out there that are so emotionally attached to their product, right, so they’ll go down swinging, and that’s the entrepreneurial mindset, is that, “No, you can’t tell me that this product isn’t going to work. I’m going to show you it’s going to work.” That kind of dialog that goes on in your head. So how can you be so pragmatic about this product that you had a hand in building and evolving and then you kind of wake up one day, and you look at the numbers, and you think, “Okay, we’ve got to do something quick.”
David: I think you’ve got to ask other people. You’ve got to ask people that have absolutely no bias, who are just telling you what you want to hear. So, don’t ask your family members or friends, and then if you’re trying to execute a B to B strategy, ask customers, and say, “What problems are we trying to solve?” What are the most important ones? Are we helping you solve these problems? If we are, what is it worth to solve those problems?” And, as a consequence, you find out then how you price your products, and then that drives whether or not you have a sale product and you have a solution trying to find a problem, or you have a solution that’s solving a real problem.
So, I think, it’s really being keen on asking the right questions of potential clients, and if you’re getting no decisions, that’s a bad sign. You want to drive toward a decision one way or the other. It’s okay to get a “no,” and be beaten by the competition, knowing that you have a market that’s real, you just have to build a more compelling product, but one of the things that we’re doing, and still pioneering to a degree, and so we’re finding now there is being budget allocated for what we’re doing, but it’s with the more progressive brands.
I think the slower moving brands, who are just now adjusting to the importance of social media, are filling cavities, rather than whitening their teeth. We are a teeth whitener at this stage. As we all know, at some point in time, everybody has to whiten their teeth. So, yeah, I think again that would be the answer to “How do you know when?” You ask those people that are smarter than you what they really believe.
I’ll keeping going here for a minute, though. There’s this certain resilience that every entrepreneur’s got to have, too, to where you listen to other people, but 99 percent of the people in the world are not equipped to be as resilient and as persistent. It’s not said in the wrong way, it’s just said that there are going to be a lot of doubters out there, as well, and I think the founders of a lot of successful companies would say that same thing. You’ve also got to have conviction about what you know you believe will happen in time, but you’ve got to have data to support that.
Rob: So, when you look at the landscape, in the year since we’ve had a conversation in this mobile space. I’ll give you my impression and I’ll have yours as well. It will give you a little bit of time to think of one. I think that people at the fringe that have passed through the center of the impact that mobile’s having understand maybe a little bit of vision about where’s it going. I think that we understand now that there’s this thing about crafting the mobile experience. It’s not an app, it’s not a mobile web site. If you’re having that conversation, you should probably just stop this right now and go and finish that conversation, then come back to this episode.
It’s about crafting that mobile experience and having it intertwine with your day as a part of your day, but not interfering with your day and having it exactly the space that you guys are in from the retail space as well. I think that we’re in that world right now and I look at the guys who are lagging behind app makers. We’re still talking about apps and we’re still talking about silo’d environments.
Sometimes I get so frustrated with this. As soon as they get past this, they see the light how mobile fits in with everything else that they’re doing. It’s so important as a catalyst to business, that the world will be right again.
I think we’re in this weird turmoil of app and confusion. That’s my interpretation of what’s going on when it comes to the bigger companies and most of the small and medium sized enterprises, and then the snake oil salesman that is going in there trying to sell them on a mobile app or a mobile web site. That’s my impression. How do you think things have evolved over the last year, from last time we spoke?
David: I think it’s been interesting because we’ve spoken to hundreds of different brands and decision makers. I won’t name any names, but you’ve got those on one end of the spectrum, who are honestly getting a Twitter handle established and figuring out how they’re going to manage that, even though people have been trying to tweet at them for a long time.
Then you have other people on the other end of the spectrum who are activating local social initiatives going into 2014, where they want to empower the store managers or the general managers with the ability to not just promote in-store product, but to engage and converse with people in the store or that may be a candidate in the mall to walk in to the store. Those are the savviest brands where they see this empowered workforce who’s already on payroll, who’s typically there to insure that inventory is taken care of and answer any questions for prospective customers.
On their personal time, these people are already using Twitter and using Facebook and are active on their mobile device. To your point, the mobile experience becomes an extension to the way in which they can engage and communicate and create a relationship with people at or nearby their locations. It is all over the boards. That’s why it’s exciting.
There’s new data to support and suggest that mobile is not only growing, but it’s just become this addiction in a lot of ways for people that has a lot of potential. It’s interesting, the whole responsive site versus apps. As a user, there’s been a lot of studies that have indicated that responsive sites are actually more easily accessible and more used than apps are. I think unless there’s an easier way to access every app, sometimes you forget which apps you even have. You might have downloaded an app for one experience, but then you never open up that app again.
We all know how to surf the web. We have since the advent of [inaudible 23:46]
Rob: Dawn of time.
David: Yeah. I think personally, that’s how I navigate and find the information that I want on my mobile device. I do think apps are great, because there’s a lot of functionality that can be built into it that can be native to that particular brand, which they love and can imagine how great it can be. Yet, at the same time, I think it is a challenge to connect with a lot of consumers because we all have fatigue when it comes to how many apps we can open and utilize and get value from on a daily basis.
Rob: Discovery is a problem unto itself. The providers, Apple and Google, are trying to figure this out and so is Blackberry and so is Microsoft. It’s a very difficult thing. You don’t automatically think about going to an app store when you’re sitting in some brand’s place of business. That must have gone through your head when you were actually pushing your own application. Are there any lessons that you can impart on us about how hard that is, or how easy that was?
David: No question. Again, I think what we were trying to do, we knew the risks, we knew the odds were stacked against us. We felt like we had a really compelling, interesting idea. I still think to this day, if we had the contributions, we’d have some really interesting use cases that people did really like, and there’s some companies out there now still trying to make it work. There’s NOW, [inaudible 25:10] Banjo, has really moved in that direction.
Rob: [inaudible 25:13]
David: There you go. If they can get it right, listen, I still believe that it’s super interesting, and I would love to have a perspective into a stadium in Europe to catch a live video of a game going on that I can’t be at through the eyes of somebody that’s there right now.
The way that I look at it is an app is just another channel for communication and/or another channel for business. It’s not a business as a standalone, and what’s unfortunate is you have a lot of young developers who have this fantasy of a startup, and they learn to build an iOS app, and they go out and build an iOS app in a few months, and they launch it and think that it’s going to be the next SnapChat or Instagram.
I think it’s unfortunate that although those stories are going to continue to happen, it’s so watered down that in order for that to happen, there’s got to be some magic behind whatever that particular app is.
It’s ironic, obviously, that I’m saying this after what we tried to accomplish with Evzdrop, but we always had a business platform that worked in conjunction with the app, so there wasn’t this expectation that we were going to monetize the business with advertising, and that we were just going to get a lot of users and figure out later how to make money from it. There was actually a real business behind it, but at the same time, building a business around an app is a little bit dangerous for the average entrepreneur.
Rob: I couldn’t agree with you more. Going in your eyes open, if you understand, like you did, the costs associated with and the time that it’s going to take in order for this to stick. Costs alone, I mean, it is very expensive to get low users, and especially when it comes to the application.
If it’s not tied into something that I’m doing every day, then it doesn’t get on my phone, or if it does, as you said, it gets onto page four in a folder somewhere that I forget about until something happen. It takes a certain type of person understanding that, “Listen, we have not got the traction that we want. We are not where we want to be at this moment. There is time left, we have runway left, we have to understand what our business is and move quickly,” and it seems like that’s what you guys have done, obviously, from Evzdrop to Earshot.
When you have these conversations with your team, with your investors, with your head, in the head-space with your customers, with your lead customers, with the users, what was that like when you kind of lay down the plan and say, “We’re going to stop this”? We’re going to go this way. Are you with us or not?” Did you lose people? Did you lose investors? Did you lose customers?
David: No, I don’t think so. From the team perspective, we did have one team member that I think had a real conviction and real interest in B to C, and I think it did impact his long-term commitment and interest in building a B to B business, and we respected that, certainly. So we were affected a little bit with one person.
Investors, I think, appreciated the idea that we were focused on their interests first, which was to build a viable business that could be self-sustained and would generate revenues, and that, I think, was appreciated for sure. Obviously they invested in our story around Evzdrop, so it was their confidence in our team and in our ability to navigate the waters that made them feel that way, not necessarily that they had been originally pitched on Earshot.
So, yeah, I think we were given a lot of credit from making the decision we made, and I think the sentiment, in terms of the direction that we’ve gone, has been really positive for the most part.
Rob: I think time will tell. Do you have a time limit on this? Do you have a certain amount of traction that you want to get in order to feel comfortable with it, or is this…? I don’t know if you can answer this question, but I’m going to ask it anyway. You don’t have to, but is this the moon shot for you guys, or do you think, come six months, nine months down the road, no traction, you pivot again, or is this the moon shot?
David: I think the next pivot, if there was to be one, is more of an adjustment to where this will go. Our belief that there’s a new evolution of customer service underway, which is, again, one that’s more proactive, that’s values deeper relationships with influential customers and advocates, I think is the trend is we have a lot of conviction around.
We believe by providing proximity-based filtering there’s a better way to enable those relationships to start and then to continue on and I think it becomes a longer-lasting, more genuine form of loyalty frankly. I think that’s really what it ultimately becomes because now the person that stays at The Westin who is treated to free music that is in a genre of their interests and then gets a free spa service and they’ve got over a thousand followers and they tell their friends and it gets retweeted, it’s invaluable to Westin.
And so I think that as we see this evolve, we certainly could make adjustments to our model a bit, but it’s ultimately going to be about creating we believe a deeper stronger connection between brands and customers.
Rob: There’s a huge opportunity for co-marketing it would seem as a result of what you guys are doing, right? So that if you stay at the Westin and they have partners that are around there that you’re getting a benefit when you walk in proximity to those locations that are partners with something like Westin. We see that already in gas stations and in hotel elevators that are driving you somewhere or even gyms in hotels. So is that part of this ecosystem? Is that a symbiosis thing that happens between an established beachhead and the retailers and them?
David: Yeah, I think so. I think, again, there’s a lot of patterns that you can interpret about how people are moving or where are they are at a given time. In hotels it’s beds and heads, so if they’re looking at events that might be happening nearby, their properties, those events become interesting opportunities. If someone’s had too much to drink let’s say at a concert and they don’t have a place to stay and they express that to all their followers, and the hotel typically would miss that tweet. It wouldn’t carry the Twitter handle of . . .
Rob: How would that go? How would that go? “I’m so drunk.” Is that all it would be?
David: “The cruise was amazing. I’m blasted. Where am I going to sleep tonight?”
Rob: Exactly. And “I think I’ll find a park bench somewhere”.
David: And the person managing the social channels let’s say at Hilton and that general manager at Hilton, on their phone, could have the Earshot enterprise app and we would instantaneously notify them of this person that’s within . . .
Rob: Wandering around.
David: . . . a geofence of interest and we would have captured one of the key words potentially that the person tweeted that was important to that general manager and they would now be able to initiate a conversation which is “Hey, we’ve got a few rooms available. We’re right across from The Arena. Come see us.” And what an opportunity to make it a relevant contextual conversation that the person then appreciates.
And one of the tests that we ran showed us that the reception of consumers to being communicated with or engaged, even when they weren’t intending to direct their original tweet to the brand, was overwhelming positive. So it was 18 percent of all of the engagements resulted in a positive response of some kind, so a retweet, favorite, a positive response or reply, and 0 percent were negative. So no one responded with “How did you know I was here?”, “Don’t creep on me,” . . .
Rob: “Are you following me?”
David: Nothing, nothing like that. So that was a great indicator for us that as long as the original engagement was done in the right way that this was a huge opportunity to use a new channel for communication that otherwise wasn’t being used that way.
Rob: I think about that. You used to term “geofence of interest.”
Rob: Is that what you called it? Is that a custom term? Like this is the first time I’ve heard that term. Should I be embarrassed that I’ve never heard that before?
David: No, again, I think as we’ve continued to learn from our clients and learn from the brands and think through what we want to become and what makes sense, we’re recognizing that there’s, Nike is interested in kids’ soccer fields, Kia is interested CarMax and their locations, UnderArmour is interested in sporting good, there’s a myriad of examples I could give where it could be event-based, it could be proximity-based, it could be directionally-based, where someone is heading at that moment in time.
And so the point is that it wouldn’t necessarily be the physical location of that particular retailer, but it could be another location that, let’s say, perhaps held a certain demographic of people, so now geofencing Ritz-Carlton may have a strong interest in Neiman Marcus. Even though that particular geofence is not even their property, those are the types of people that would obviously shop at Neiman Marcus.
So we quickly have a way to gather data from people and assimilate them into an instantaneous focus group, to a degree, on the research side, and then on the engagement side increase the chances of conversion based on who they are, based on these geofences of interest.
Rob: Geofences of interest. I think it’s a very interesting piece, because when we talk about geofencing, we talk about that like what’s that geofence high jacking, where you’re putting a geofence around your competitor’s space, and then you’re trying to draw them in, and it’s like a militia, right? I don’t agree with that kind of thinking if you don’t have the context to understand that there would be an interest level from those people that are in there, that geofence of interest, and, based on where they’ve been and what they’ve done and what they’ve consumed and what they’ve said and the tones they’ve used on the social networks, to be able to bring that information in.
But I’ve got to say that it sounds like that’s a lot of effort, and are people willing to put that effort in? So the drunk guy staggering around after a Bruce Springsteen concert, looking for a place to stay, that’s one guy, and say they get 150 bucks out of him for that night. Is that what we’re going to see, or are there ways to automate this process, because it just seems like a lot of effort to bring one person in?
When you see that WestJet thing, which is like, hey, listen, not only did we hit the 50 people that were part of that experiment, but then as of the recording of this, that video has been featured on CNN, and it has been watched 2.5 million or 3 million times, and the social awareness that they’ve received as a result of that is amplifying.
Rob: So how do you balance that?
David: The power of the individual in today’s world is insane. I don’t know if you saw what happened with Samsung this last week.
Rob: Yeah, it’s crazy.
David: It can have a negative effect, and so that’s why I believe that there’s a tremendous amount of value in connecting with that one person.
Rob: That one person.
David: We have the ability, as do most platforms, to provide them with quickly who this person is with relative influence, and so you can see who and how many people they are able to touch with their retweet or with their share.
These concepts, like WestJet where there’s [surprise and delight], that general manager honestly might be reading the newspaper while they’re waiting on somebody to check into their hotel. They get a simple notification on their mobile device that someone’s within Earshot, that it just tweeted something of significance, not only is it that $150 for that one night, but if they treat them really well, that person may have never stayed in a Hilton Garden Inn before, and they may have just earned a customer for life.
So we like to look at the lifetime value of that customer. If you had never had them in the Hilton [HHonors] program before and all of a sudden they stay there and it goes well, again, there’s the spray and pray with advertising. It’s all about reach, it’s all about brand awareness, it’s all about hoping that people convert, very hard to measure, and then there’s the [rifle] approach, which if you consider the person that you’re connecting with and the social influence that they might have, it’s those 50 people in WestJet, and probably not 50, it was a couple that made it viral and made it special.
David: I think that’s the next evolution of marketing that brands are going to have to figure out, with smart, clever, funny people that are using social media and other forms of communication to get the most out of what they can with new and existing customers.
Rob: I always think about Gary Vaynerchuk when we have these kinds of conversations. What he does with social media is that he’ll put out, say, “What can I help you with?” “What do you want right now?” There have been a number of examples of this, like he touches the individual.
There have been tweets that have come out in response to that, that say, “Listen, Gary, I’d love a New York hot dog.” And sure enough, a New York hotdog arrives on their doorstep. And there’s a guy in the U.K. who said, I don’t know, it’s like a [High Five] or something like that, a beverage that he can’t get in the U.K., and he said, “I would kill for one of those.” And then literally nine hours later, by FedEx post, there was . . .
David: [inaudible 39:28]
Rob: Did I lose you again?
David: I’m sorry, we did there.
Rob: Okay. Where did you lose me there?
David: I got to Gary Vaynerchuk, and then you moved onto there was a guy in New York, I think.
Rob: So I’ll start that over again here.
Rob: It’s okay. No worries. It’s Skype, man. Come on, Skype . . .
Rob: . . . and Wi-Fi, right? All right. I always think about Gary Vaynerchuk when I hear about the individual, because he’s the type of guy that will put out a tweet and say, “What can I get you right now?” And people just respond. And, sure enough, there was a guy in New York that said, “I’d love a hot dog,” and sure enough, a hot dog was delivered to him. And this guy in the U.K. said, “There’s this kind of beverage or a soft drink that I can’t get here, but that’s what I’m craving,” and then within like a day, 12 hours, there was a crate of this stuff. It costs 4 bucks to buy the crate by the case, and it cost Gary 200 bucks to send it over there, but it’s those human touches like that, the one on one, that create the brands, right? Nuts. And we don’t want to talk about Gary.
David: We got through Gary both times, and then you were giving an example, and I think it’s the video, for some reason, shutting off my video. So I’m sorry, you [inaudible 40:41] great job there. We got through all the Gary, and when you got into the next one is where it froze up on us.
Rob: Okay. So I won’t redo that one, but I always think about Gary as the guy who connects one to one and how important it is to connect one to one with people. He’s a number one best seller on his book, Macro, but he also touches at the micro level, as well. Is that a good example of something like this?
David: Yeah, I think so. I think it’s personalization. I do think that that’s such a key. And to your question earlier about automation, we do want to find ways to automate this and allow it to scale better than having to put the burden on an individual to author each response. And, of course, you can imagine the push back we get from investors who love to see scalable businesses that don’t require any human intervention.
What you end up finding is examples like Bank of America, and examples like the Pace Picante Sauce from a few weeks ago, where it blows up in a negative way. So you want to save a lot of money without head count, rather than looking at automation as a way to save money, and allow it to kind of work on its own to more efficiently leverage the existing resources that can be an extension for the social media team or customer service team by empowering the general manager or store manager. It becomes another way to save money, but not lose that personal touch and that connection that people expect and end up remembering.
And I think, again, loyalty is this huge trend that’s being attacked from every angle, from payments to every kind of card, and we know all the players in the space. But real loyalty is unmatched on a lot of levels, and so, of course, automating this makes it more cost effective, but you don’t want to lose that personal touch.
Rob: If you’re a company that is trying to figure this out, going from a standstill to an accelerated pace of what we’re talking about here, which is understanding context and place and user and all that kind of stuff and social, how do people get started in here? Best practices, where do they start, how do they get going, what’s the first thing that they should do, what’s the second thing they should, what’s the third thing they should do before they start to get into this and feel comfortable with it?
David: Yeah. I think it starts with a CMO and strong leadership recognizing the importance of social and its role in building their brand and really impacting the most important numbers, which are top line and bottom line. And, of course, marketing is most focused on top line, and so then you begin to determine what, for a retailer, drives in-store traffic [inaudible 43:24] in our conversion rates, how can we increase our conversion rates, and then ultimately how do we increase transaction size?
You begin to back into different strategies to do that, and if you point to some of the statistics that you and I had addressed earlier, where 40 percent more is spent by people that are actively engaged with [inaudible 43:42] social media, then you have to say this is an opportunity cost for us if we don’t do something about it, and it has been proven to directly impact our revenues.
So you hope that the CMO is astute enough to recognize that, and then, of course, they’re going to have to make decisions on what tools and technologies are the most effective and valuable for them to accomplish those goals. And, again, I think where we live, specifically with Earshot, is an evolution of this process, where most companies now have some sort of social media management system in place.
There’s like Sprinklr and Spredfast and HootSuite on a broader scale, and a lot of companies have implemented social listening tools, like Radian6 or Crimson Hexagon, and those are providing a lot baseline value in terms of being able to interact with people through a platform that organizes signals and then being able to interpret, to a degree, social media and social chatter through the creation of tag clouds and other interpretation.
What happens when we localize all this is we start to create true prescriptions and true recommendations to those general managers and those store managers that can be more actionable. That’s what we continue to hear too, which is unique about location- based tools and technologies, is they’re more actionable because they’re more authentic, they’re coming from people that are there or were really there, so you instantaneously have insight and action on the Ruth’s Chris in Seattle, rather than just in general, people like the T-bone more than the filet.
The Ruth’s Chris in Seattle could generate a lot of revenue if they stayed open until 11:00 p.m. instead of 10:00 p.m., because all of these people have talked about how the movie right across the street gets out at 10:10 p.m. and they’re looking for a good bite to eat and wouldn’t it be great?
There’s insights that can be played on a local level that I think are going to be fascinating and that I do think that again as trust grows between consumer and brand, which is the other keyword, it’s personalization and it’s trust, then these proactive communications that happen from the brand to the consumer are going to be just fine with the consumer. They’ll open up the doors. We want to empower the consumer ultimately to say which brands we want to give the green light to at any point in time based on where I’m standing.
Rob: I love this approach. You take these conversations that are out there, that are starting in the mobile space, so it’s proximity. You understand the context with which the conversation is being had. You add the place layer on top of this, so you’ve got context in place and then ultimately, you add the users and their habits and their behavior into this and you create this equation of dollars that happen as a result of this.
You’re right. That simple example about a restaurant staying open an hour later to catch a second wave or a third wave of appetizers and drinks after a movie, really, really has an opportunity to have a huge impact. People are missing that. Not only do they spend more, people are engaged with a brand in the social space. You have an opportunity as a business to be able to leverage that to run your business smarter, right?
David: That’s right.
Rob: It’s not about discounts. It’s not about pushing coupons in front of somebody who is at the point of trying to make a decision. It is about actually understanding what the decision is that they’re about to make, and then put something in front of them that they would be more susceptible to accept, right?
David: Absolutely. Again, I think what we continue to hear is big data, super interesting, digging out structured data and trying to translate it into meaningful insights. Oftentimes, those insights get looked at and then filed away and nothing ever really happens. There isn’t a way for that person to really create a new product from it or do anything with it.
Sometimes, millions of data points that provide us with statistically significant trends are not as interesting as hundreds of data points that can actually inform a real time decision or even a longer term decision in real time and being able to do it at the local level to where it can be activated very quickly.
It doesn’t require this deep, long analysis in product ideation based on trends that are merging and trying to make sense of these things. This is happening right now or if this is something that we’ve heard several times, the person who really should be the one making those decisions isn’t coming from headquarters in the worldwide insights group. It’s coming from the general manager, maybe even the concierge, it might even be a new salesperson on the floor at Nordstrom’s. They’re the ones that are able to better position the new Michael Kors shirts in a place where people can see them better because they’ve seen three tweets now that have indicated that nobody can find that brand, or whatever it could be, that’s the stuff that is what creates the value.
Rob: Amazing. I love this. I will have you back in a year from now to see what the evolution of this is, not the evolution of the company. You’ve got something here. I thought Evzdrop was a great company. [Consumer] is hard. Earshot, you’re attacking a problem.
I wrote this up in the review of what I did in our interview the last time, was that, attack something where there’s a problem, where people are already putting money into the problem and be that layer on top of it, which is what you said. I think that this is certainly that, so kudos. I love this.
This has been a great story about entrepreneurial perseverance, the ability to not give up, but to change direction when the market tells you that the market is changing and also, the ability to then help customers find that one individual that will change their business or the trends that will help change their business through the platform. Where should we send people?
David: Earshotinc.com. At our website, you will see the ability to reach out to us if you want to learn more. It’s [email protected] and Twitter handle is @Earshotinc. We’d love “Earshot”, but it’s taken by a record company down in South Carolina, so we’ll wait patiently. We have the trademark rights and the name for what we’re doing. We welcome all inquiries into the business and are excited to showcase our platform and enterprise mobile app to customers who can get value from it.
Rob: Amazing. David, thank you for doing this, I really appreciate your time again. I will have you back next fall. We’ll see how things are going with you guys. I’m sure they’ll be going very well. I definitely want to follow up and see how things have progressed as you’ve gone through this transition. Thank you for doing this, David.
David: Thank you, Rob. I appreciate the time and sorry for the connection issues. We got it done.
Rob: We got it done, that’s right. We made it. We’ve been speaking with David Rush, who is the founder of a company called “Earshot.” Go to Earshotinc.com if you’re interested in any of this stuff. There’s a lot of information up there. You can also find David’s previous episode on Evzdrop on UNTETHER.tv, just do a search for Evzdrop. Go and check out Earshotinc.com. David, thank you.
David: Thank you, Rob. We’ll be in touch.
Rob: Folks, for you who are out there listening, watching, whatever you’re doing, wherever you are listening to this, I really appreciate it and we’ll see you again on the next episode of UNTETHER.tv. Thanks, David.