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August 01, 2010

Working Smart

SMS—Marketing That Gets Results

by Paul Cohen, with an additional contribution by Angela Pacheco

Planning Parties in the World of Social Media and Mobile CapabilitiesThe use of mobile marketing is quickly growing as an effective, low-cost solution to reach an increasingly mobile world. With more than 258 million wireless users in the United States alone, there is nothing but potential for marketers. By 2013, it is estimated that every American adult and teen will have a mobile device, with marketing to these devices growing as well. In 2007, mobile marketing spending was estimated at $1.8 billion, with revenues predicted to grow to $24 billion by 2013.

Everyone witnessed the groundbreaking $34 million success that was the American Red Cross’s text campaign to support Haiti. The large majority of popular brands already using text marketing have demonstrated the necessity of text in a successful marketing strategy. In the same way that the advent of the Internet made a Web presence crucial for maintaining or establishing a brand, the widespread use of mobile phones will make texting an integral part of client interaction and interoffice connectivity. With a reach of double the Internet and unprecedented response rates, text marketing has established itself as the ultimate opportunity to reach the next billion people.

Beyond ‘Texting’

As recently as June of last year, American mobile users sent 134.2 billion SMS messages, or about 4.5 billion messages per day. Despite the familiarity of texting, many are still unaware of the available avenues beyond personal messages that make this an effective marketing tool. SMS (short message service) allows mobile devices and computers to send and receive short messages that are usually 160 characters or less. Within the context of marketing, an individual texts a keyword to a common shortcode (CSC) to receive information in the form of a text response back. The keyword serves as the message content of the text, and the CSC works just as a phone number would. Keywords are usually between five and 13 letters or numbers that can be personalized for a campaign and-or company. Using one CSC (i.e., phone number) and any amount of keywords that can be active at the same time, marketers are able to send a variety of information based on the keyword received. Marketers can easily manage and monitor an SMS campaign’s content and performance from the back office or SMS platform. This SMS platform permits users to visually see what campaigns are working and quickly adjust what isn’t.

Adapting to a Changing Market

Text messaging is fast emerging as the preferred method of communication. With the average age of an SMS user at 38, SMS provides wider access across all age groups. As far back as 2008, the average number of monthly text messages outnumbered the average number of monthly calls by almost double. Already, the majority of consumers surveyed say they prefer text messaging to voice mails or e-mails. Additionally, most consumers have shown interest in receiving exclusive promotions and information via SMS. Smart phones, or phones with Internet capability, still make up a very small percentage of mobile users. SMS is still the best way to connect with 80 percent of mobile users with an SMS subscription plan. SMS marketing also enjoys higher exposure given that 78 percent of mobile users carry their phone with them everywhere all the time. SMS marketing will also be the optimal way to reach the 20 percent of U.S. households that no longer own a land line phone.

Benefits of SMS Marketing

SMS marketing gives e-mail and online marketers the ability to refresh and augment other marketing programs that may be hitting a plateau. While establishing custom two-way communication, SMS simultaneously provides database generation, targeted marketing and identifies consumer behaviors. Marketers can now more accurately measure penetration, visibility, response, and interest in existing advertising and marketing efforts. Vigorous reporting enables the gathering of important information that will help determine the return on investment for any given campaign that will shape decisions about future programs. Just a few examples of the data available are the number of offers redeemed (for coupons, etc.), campaign response rates, hours and days of highest response rates, and detailed response data for surveys. Responses by keyword are beneficial to compare how the different forms of promotional media with the SMS call to action fared so a marketer can determine which advertising medium is getting the most results.

Marketing programs that employ SMS will overcome many of the hurdles of traditional advertising methods. It’s quicker and more cost-effective than mail and e-mail. Unlike e-mail, most mobile users don’t feel like the messages they receive on their phones are spam. Since such a high percentage of e-mail is spam, many customers now ignore e-mail messages. Because less than 10 percent of SMS messages are spam, they have a better chance of being read. The likelihood of messages being perceived as spam is also lower because of the SMS platform’s ability to make sure that only the most recent and personalized information is being sent. The complete control over when a mobile user receives and reads an SMS message ensures that recipients are receiving messages at optimal times. SMS is more urgent than e-mail, ensuring that a message gets immediate attention. People are also more willing to read a text because they don’t have to stop what they’re doing. Even the busiest contact has time to take a few seconds to read and even respond to a meaningful SMS message. SMS marketing also takes advantage of the give-and-take dynamic that characterizes personal SMS use. Familiarity with this exchange encourages mobile users to interact with campaigns that consist of things like sweepstakes, voting and surveys. Familiar incentives, such as contests, polls, promotions and coupons, will be more successful when made available in a new way with SMS.

Marketing That Gets Response

Take a second to think about the percentage of received e-mails you actually read. Mobile users won’t need to estimate how many of their texts they read because the answer is simple—all of them. With texts being read within the first five minutes and responded to within in the first 15, advertisers can be sure that the results of their campaign can be measured almost instantly. When compared to the effectiveness of more traditional marketing methods such as regular mail and e-mail, SMS marketing quickly establishes itself as a superior advertising method. E-mail and mail have response rates of only 5 and 2.61 percent, respectively.

Meanwhile, the adaptive nature of SMS campaigns allows this method to enjoy a 15 to 30 percent response rate largely because advertisers are sending relevant information to a database that has specifically requested the communication. Because of the short time it takes to review a text, communication via this channel is also seen as less intrusive, thus making an audience more forgiving of irrelevant information and patient for that which is. Recipients are also more likely to take 10 seconds to respond to an SMS ad’s call to action because of the speed with which a text can be made and sent.

The first contact of a mobile-originated message to a business’s SMS platform is referred to as “opting-in.” In addition to expressing interest in the text response’s content, opting in gives the business permission to send proactive outbound messages at a later time. It’s important to be sure that future texts sent are relevant and not excessive, as a recipient can “opt-out” (revoke permission to receive texts) at any time. Although this requirement may appear restrictive, it ensures a marketing program’s effectiveness by sending information to an interested base. After establishing what kind of information is relevant to a target audience, marketing programs and incentives can be implemented to maintain personal customer and client contact.

SMS marketing provides some key advantages on even newer advertising methods. Although sites like Facebook and LinkedIn can contribute to a valuable Web presence, marketers still face many of the same issues as they do with e-mail. Sites require Internet access that many mobile phones don’t have. Information shared on these sites also risks getting lost in the multiple news feeds an account holder sees every day. Some sites even provide an option to hide news feeds. Even with simpler interfaces such as Twitter, there’s no guarantee that promotions or information will be seen or remembered once the user logs off. A promotion sent as a text is much more likely to be used, since all that’s needed is the readily available phone itself.

SMS Applications for Direct Sellers

Success in the direct selling industry often rests on individual client interactions and networking. SMS marketing enables individuals involved with direct selling to establish and maintain a unique, direct connection with their customers and individuals within their organization. This intimate form of communication helps direct sellers save time and focus more on building their personal network and business by helping to automate and streamline time-consuming customer and organization communication processes.

There are several beneficial uses that are especially unique to direct sellers. Using the back office, text lists can be created and uploaded to the SMS platform, affording the flexibility to send messages to very specific lists or groups. Groups can be created based on sales rank, region, services provided or other general informative groups. For the busy direct seller, SMS reminders and alerts will play a key role in keeping the network connected so that nobody ever misses another conference call or meeting. A company with regular conference calls can schedule alerts to be sent automatically at recurring times. A team will be more connected and motivated when it can send messages related to sales and commission status, company events and other urgent information.

Direct sellers can also employ many of the same promotional campaigns used successfully by popular retail brands. People are happy to vote in polls and surveys when they can do so quickly with a simple text message, and the instant access to results lets them know their input counts.

Requesting consumer feedback is a surefire way to build a database. Another exciting application is the mobile business card. Instead of carrying around cards that can just get lost when given out, agents can have a new connection text their keyword to receive their contact information in a text. Not only will they get all the information of a standard business card, but the interactive aspect allows contacts with Internet capability to go to the organization’s site or send an e-mail directly from their phone. Mobile business cards are also another great way to simultaneously capture the new contact’s mobile information, thus making it easier to follow up with them at a later time.

In this mobile culture, SMS marketing is a relevant and up-to-date method for both marketing and communications. The ease and speed of harnessing this technology has quickly made it one of the most sought-after marketing tools. Direct sellers will benefit from making this versatile and cost-effective strategy part of their marketing plan.

Paul Cohen is Founder and President of Intella II. The Intella II companies offer services such as audio and Web conference calling, various voice and text services, and mobile marketing. For more information, visit