Is SMS the Rodney Dangerfield of Marketing Channels?

Rodney was famous for his shtick about getting ‘…no respect’. Well as an evangelist of using SMS for loyalty marketing, I feel the same way.

Write an article about marketing on Facebook, Twitter, YouTube, or any other social channel and you’re likely to get attention.  But SMS, no respect. Text messaging is old school, like Dangerfield – rude, crass, primitive – right? Not really. And…unlike Rodney (RIP, 2004), SMS is still very much alive and kicking. Forget the fact that it’s been around since 1985.

TEXT messaging is how people interact with the Short Messaging Service on their phone. Most of us use SMS for sending peer-to-peer messages. When pictures or short video clips are embedded within a message, they use an enhanced service on the phone called MMS, which is short for Multimedia Messaging Service. And when used for commercial purposes, like sending coupons, event notifications, appointment reminders, polls, etc., SMS is often then referred to as mobile marketing.

When it comes to actual usage, SMS is still as current as ever. Consider this – according to Portio Research, in 2012 an estimated 9.6 trillion SMS messages were exchanged and by the end of 2013, SMS revenue worldwide should exceed $150 billion (USD).

Most people understand that the subtle power of SMS lies in its distinct ability to cut through clutter like a knife. Want to absolutely make sure that your recipient treats your silly communique with urgency and intimacy? Then send a TEXT message.  Most experts agree that 97% of TEXT messages are read and 95% of them are read within five minutes of receipt. Now that’s a communications channel that deserves respect. Perhaps that’s why the national weather service, state Amber alerts, and other public service service notifications get sent via SMS.

A lesser known, but important advantage of the SMS channel, is that it uses the ubiquitous GSM channel for cellular transmission (that’s old school 2G). That’s why you don’t need to be in 3G or 4G data coverage in order to receive a text message.When all other methods fail due to poor coverage, SMS will almost always work like a champ.

When it comes to loyalty marketing, opt-in only SMS is equally powerful. When done responsibly, the payoff for retailers can be excellent in terms of ROI on marketing spend. Sending mobile coupons, for instance, is a proven winner for retailers.  At Adverscan we regularly see coupon redemption rates of 5-10% or more. Compare this to the average 1% redemption rate of a printed coupon and you can understand the value of SMS.

When customers perceive the value of your SMS notifications, achieving opt-in success is not difficult at all.  New studies supports this phenomenon. By 2015, more than 7.18 million retail shoppers are expected to opt-in to receive SMS messages. This will represent a opt-in growth rate of 38% according to an article by BizReport.  Adverscan’s own data shows that when a retailer uses Facebook alone to promote a mobile loyalty program, they will typically get 20% of their fan base to opt in to their mobile program. This is especially true when they offer meaningful rewards for participation. Vifredo Pareto (1848 – 1923), the Italian engineer/sociologist/ economist/political-scientist/philosopher would call these customers, the “vital few” (but we’ll leave that analogy to an upcoming post).

(Check out this cool infographic for more stats and comparisons of SMS to social media.)

SMS is heavily governed by explicit rules and regulations for a good reason.  Your cell phone represents the final frontier of privacy. Reputable mobile marketers have the most to loose if this relatively untainted channel becomes yet another source of spam. That’s why, save for government emergency communications, all SMS channel communications must be ‘opt in’ only and allow for fast and easy ‘opt out’. So if you want to get thrown off the cellular grid faster than you can say TEXT, go ahead and violate the strict rules and best practices that govern the use of SMS for marketing purposes.

Now let’s check out some ‘old school Dangerfield…

About Mike Cancell

Mike has been a thought leader in the area of mobile communications and digital marketing for the past 20 years. He is the principal partner of Adverscan, a small multi-channel marketing agency located in the Raleigh-Durham area of North Carolina. When not daydreaming about skiing in the Rockies, wind surfing in the Caribbean, and dating supermodels, he can be found at home trying the patience of his wife and kids.