Microsoft's Marketing Madness: This Is Not The Way To Do An In-Store Mobile Promo

The collision between in-store, mobile and social is generating some wild and bizarre promotional ideas that go way beyond sales, coupons and loyalty programs. And those experiments risk lackluster results. (How many sales are rung up because of those Shopkick scavenger hunts, anyway?) But Microsoft's ill-fated foray into unusual in-store marketing this week demonstrated that if a promotion is badly enough conceived, it can actually generate negative results.

In fact, Microsoft's effort produced a bad-results hat trick: It didn't drive more store (or mobile or online) traffic, it wasted time for both store associates and customers, and it made the retailer look bad.

The latest round of Microsoft's "Windows Phone Challenge," which was launched on March 22, invited anyone with a non-Windows smartphone to come to a Microsoft Store and compete in one of five challenges—all of which were designed to be won by Windows phones. The goal: Beat the associate with the Windows phone at an associate-selected challenge—say, uploading a picture to Facebook or checking the weather in two cities—and the customer wins a $1,000 laptop. The losing customers got the chance to trade in their old phones for new Windows phones.

The highest profile problem arose on March 25, when a customer at the Santa Clara, Calif., store won his check-the-weather challenge mostly by luck—he happened to have weather apps for two cities already running on his phone's screen—but was then told by first the associate and then the store manager that he hadn't really won. It took a blogosphere-wide stink and some intervention from a manager in Redmond to get the winning customer his laptop prize.

That's what got all the negative attention, but it wasn't the only problem with the promotion. Some customers who showed up didn't care about the challenge—they only wanted to trade in their aging iPhones, BlackBerries or Android phones. But they still had to wait in line, in some cases for an hour or more, to take a challenge they knew they wouldn't win, just so they could swap for a new Windows phone. That wasted their time, and it wasted associates' time managing the line and running the challenges.

Worse still, while those people were in line, they couldn't look at products or buy anything in the store. Those would-be customers may have been brought in by the promotion, but after an hour in line how likely were they to spend more time in the store? And how much new traffic does that count as?

Then there was the traffic that did want to play to win—but only wanted to play, not to buy. It shouldn't be a big surprise that the challenges were designed so no one would win the laptop, and the associates working the challenges were reportedly briefed so they'd pick a challenge that the customer's phone would lose. (For example, iPhones have fast cameras, so no take-a-picture-and-upload-it for them.) This was a marketing stunt; of course the odds were in the store's favor.

But how smart was it to ask for a photo of losing contestants next to a "Windows Phone smoked my Android" sign? Yep, that'll sure encourage those contestants to return as regular customers.

And how smart was it to hold a contest in which the only way for customers to win was to make Microsoft's products look inferior?And how smart was it to hold a contest in which the only way for customers to win was to make Microsoft's products look inferior? Or to put the effective message another way: Winners don't buy things from Microsoft.

That's not a message you want your cross-channel gimmicks to send.

Consider casinos. They stack the odds in the house's favor, and they hate having to make big payouts when a customer wins at the slot machines. But whenever a player wins a big jackpot, the casino makes a big celebration out of it. Why? They're sending the message that people do get rich playing the slots. That's what brings more players into the casino.

Or think about the old "Pepsi Challenge," in which passers-by at shopping malls take blind taste tests comparing Pepsi and Coke. That was a low-stakes game for Pepsi; only the people who were surprised they picked Pepsi showed up on the TV commercials. (Pepsi also helped its odds by washing the ice used in the drinks, which improved the flavor of Pepsi but made Coke taste watery.) Even if some people chose Coke, Pepsi could still say the test showed people preferred Pepsi by a margin of 2-to-1.

That's the way you want to work cross-channel promotions that intermix in-store, mobile and social—you want them to drive traffic by customers who actually buy things, and to align winning with being a customer.

For example, imagine an in-store trivia game in which loyalty customers can use their phones to find an answer on the retailer's mobile site and get a 10 percent discount on that purchase if they answer the question correctly. They only get to play if they're loyalty members; they only win by going to the M-Commerce site; they only cash in on the discount if they buy something.

Want to sweeten the promotion even more? Give a 5 percent discount to loyalty customers who try but fail at the trivia challenge. That way, they're not really losers, at least as long as they buy something. And non-loyalty customers? They can sign up on the spot (or on the mobile site), and then play for the discount. Everybody wins, and the mobile site gets traffic from the store's best customers.

Want to turn this type of promotion into a very bad idea? Make the answers hard to find on the mobile site, so customers will spend time searching while they could be shopping. Or encourage them to use Google, giving them the chance to drift away from your store and to the online store of a competitor. Or make the challenge one that invites customers to compare prices or products with other retailers on the Internet.

Humiliating potential customers or wasting their time, Microsoft-style, is a bad idea. Actually sending customers away to online competitors? That's a true failure.

And if all this sounds like it's in the realm of the marketing department, not M-Commerce or IT, consider this: IT people are good at spotting and fixing failure points. Marketing people are good at optimism. And cross-channel marketing campaigns that are intended to link mobile, social and in-store really need to be vetted from a failure-oriented point of view.