Weekly Update

SMS is old, it’s boring, and it’s still an effective marketing tool

Mobile advertising is a forward-thinking space where today’s hype is often focused on next-generation technologies: Marketers can’t wait to use tools like augmented reality, nfc or 3-D video in their campaigns, or to leverage geofencing to deliver ads to users within a very specific location at just the right time.

Those kinds of technologies are all promising for a mobile advertising market that so far has fallen short of its potential. But they sometimes overshadow the fact that while 20-year-old SMS isn’t very sexy, business-to-consumer text messaging is still one its most powerful tools in mobile marketing.

Powerful — but only if used correctly

A franchisee of the venerable restaurant chain IHOP is one of the most recent advertisers to tap that power, as Business 2 Community documented this week. The IHOP location used direct mail, radio and print ads to encourage users to send the text “IHOPFREE” to receive a coupon for free pancakes on days of the week when business had been slow. Roughly ten percent of those coupons were redeemed, boosting traffic during those down times, and the franchisee reported substantial upsells from customers redeeming their discounts. Even more importantly, the campaign lets the restaurant build a list of hundreds of customers to whom they send discounts twice a month – with only 10 percent of those customers opting out of the campaign.

And there are plenty of other success stories: Hooters recently added 50,000 consumers to its mobile database with a campaign centered on the Super Bowl. An SMS-based mobile coupon campaign from Dunkin Donuts last year increased in-store traffic by 21 percent, and 17 percent of participants forwarded the message or showed it to a friend. Starbucks continues to make SMS the centerpiece of an extremely effective mobile marketing effort that also includes MMS, QR codes and mobile payments. And those are just some of the most recent examples from high-profile brands. SMS can also be effective for smaller chains and even mom-and-pop stores who can initiate campaigns through in-store messaging and local print and TV ads.

The biggest advantages SMS offers are its immediacy and the size of the addressable audience. Three-fourths of the world’s handsets are SMS-enabled, according to recent data from Microsoft, and usage is expected to rise over the next several years despite the emergence of third-party messaging offerings. Open rates for SMS messages are far higher than those of traditional email, several studies have shown, and they’re often read within a few minutes of delivery. And while carriers have consistently tried to strong-arm businesses that use SMS, marketing messages can often be sent for just a few cents per missive – not the cheapest method, to be sure, but an affordable one for organizations who do it well.

The do’s and the don’ts

But just as SMS marketing teems with potential, it is rife with potential pitfalls. Text messaging is subject to federal regulations that many other marketing channels aren’t, so sending unwanted texts to users who haven’t agreed to receive them can be a very costly mistake – as Papa John’s and Jiffy Lube can attest to in the wake of their botched mobile-marketing attempts. And just as it’s important to send a limited number of messages only to users who have opted in to receive them, it’s equally important to respect their wishes to opt out – as Coca-Cola has learned the hard way.

Conversely, the guidelines for executing an effective SMS campaign are relatively cut-and-dried. Don’t send messages to users who haven’t explicitly said they want them, don’t send them during hours they’re likely to annoy your customers, and immediately cease sending them to users who indicate they don’t want them. Keep your messages concise, making every character count, and use them as a piece of a comprehensive campaign that leverages other kinds of digital media as well as traditional platforms. Make it easy for users to click through to call you or visit your mobile site, and make sure that site is ready for prime time. Most importantly, identify yourself and include a discount or other offering of immediate value. Not only will that help get customers into your business, it will help track the ROI of your SMS marketing campaigns.