Expert Interview Series: Paul Crane on The Importance of SMS Advertising
Smart business owners must take advantage of every advertising and marketing strategy at their disposal. While nearly everybody is stampeding to tap the mobile market, making apps even if they don't need them, or vying desperately for online attention, many marketers are missing a powerful and widely available tool; text messaging, otherwise known as SMS advertising.
SMS advertising doesn't require a certain level of technology to opt in (other than a cell phone), which gives it a much wider reach than apps or e-mail marketing. The market isn't nearly as flooded, either, making it a prime opportunity to connect with your customers and build lasting relationships.
We talked to Paul Crane, founder of the company Local Text Marketers, to learn the ins and out of SMS advertising and how to best use this powerful tool.
For people who've never heard the phrase, what is SMS advertising?
SMS stands for "Short Message Service," which refers to the technology most of us know simply as "text messaging." SMS advertising, therefore, is the process of advertising to your customers' and prospects' cell phones and mobile devices via simple text messages.
In an era of digital marketing, what are some of the advantages of SMS advertising?
There are many ...
i) The vast majority of cell phone owners (over 80%) use text messaging on a regular basis.
It is a comfortable, familiar, and non-intimidating technology - exactly what is necessary for any technology-based solution to gain the widespread acceptance and traction necessary to become a viable marketing and communication channel.
ii) When it comes to mobile technologies, SMS is the "lowest common denominator."
As such, your customers don't need to have the latest and greatest smartphone, a specific operating system or even a data plan. They don't need to download, install and learn how to use anything. In fact, SMS works on phones long considered obsolete.
In other words, SMS advertising allows you to sidestep the technological barriers that would otherwise impact your implementation rates (as with an app, for instance), and it enables you to reach almost all of your potential audience (currently, 97% of Americans between the ages of 18-49 own a cell phone).
iii) It requires minimal investment and little "ramp up" time.
While conceptualizing, planning and developing an app for your business may take months and cost tens - even hundreds - of thousands of dollars, small businesses can use specialized SMS gateway services like our own to begin SMS marketing in literally minutes - for less than $20 per month.
In other words, SMS advertising allows your business to "test the mobile waters" quickly and with a relatively small investment.
iv) SMS marketing best serves your customer's needs.
A recent paper from Forrester Research concluded that while businesses and industry leaders are investing in mobile marketing, they are investing in the wrong sectors; and that in general, marketers' use of mobile technologies does not match customer behaviors.
In other words, many businesses are falling over themselves in an attempt to develop an "app" that will resonate with their respective audiences. The harsh reality is that for the majority, this will be an expensive and unrewarding experience. After all ...
- There are well over a million apps available for both the iOS and Android platforms. Unless yours does something really, really special that no one else's does ... well, good luck. That's all I can say.
- 60% of users opt out of push notifications.
- 26% of mobile apps are only used once.
- Users eventually delete 90 percent of all downloaded apps.
- 68% of consumers have more apps on their smartphone than needed.
- 81% said sometimes a simple solution like SMS / text would better suit their needs than complicated apps.
- 70% said SMS / text is a good way to get their attention.
- 74% said organizations should use more SMS.
Big, big mistake!
SMS is reliable, ever-present, comfortable and extremely effective at engaging your audience.
v) SMS offers outperform traditional coupons:
Coupons sent via SMS get ten times the redemption rates as traditional coupons.
If part of your business' promotional strategy is to use discounts, coupons, and pricing incentives to encourage return visits and follow-up purchases, you need to be delivering these via SMS.
vi) SMS messages obtain up to to a 99% open rate.
Whether you're using email, social media or a mobile channel, your ultimate goal when attempting to maintain a connection with your customers is to build relationships and boost customer retention. As every business owner knows, not only is it much cheaper to market to existing customers than to obtain new ones, but these also customers spend more, purchase more often, and generate the most word-of-mouth referrals.
And connecting is where SMS really shines.
With open rates approaching 99%, no other medium can match its effectiveness for engaging your audience.
Nope. Industry average open rates hover around 25%.
Post engagement is between 2-6%, which means only 2 to 6 out of every 100 fans ever see your updates in your newsfeed.
And app "push" notifications?
Data shows only 3% of those are being opened and read.
But almost every single text message sent from your business to your customer gets opened and read within a few minutes. That's a massive benefit! You can't engage your audience with messages they don't see or won't read.
SMS solves this problem!
vii) SMS communications are short and efficient.
Why do you think email newsletter open rates are so low?
It isn't because people aren't interested in the content. They signed up to receive them, after all.
It's because they simply don't have the time to read the emails they receive. They receive a ton of them, have minimal time, and consequently have to prioritize what they open.
But text messages take seconds to read and are the ultimate in instant gratification - all the "what's in it for me" benefits delivered quickly and up front, with none of the "fluff."
Your customers appreciate that.
One of the main demographics of SMS advertising is teenagers with cellphones. How should that information reflect in a business's SMS ad strategy, such as choosing the right tone of voice?
While a less formal tone certainly resonates with teenagers, ultimately it's the deals that they're most interested in.
When encouraging teens to subscribe to your SMS marketing service, the incentive is the key. Regardless of who your audience is, you have to "give" something to your customers in exchange for their phone numbers - if you want your program to gain any traction, that is.
It can be a discount, coupon, "freebie" of some sort, exclusive access to a digital product, app, or game - whatever. As long as it's compelling and perceived as valuable, you'll find that teens are willing to provide a cell phone number to receive promotional material from you.
And when it comes to your promotional messaging?
While you do have some creative leeway and should use it to your advantage, the key to any successful advertising strategy is knowing your audience and their needs and interests intimately, and then determining where those needs and interests intersect with your own products or services. In this way, you can focus your promotions on the things that generate the most excitement.
SMS advertising is a unique opportunity to have a one-on-one conversation with a potential customer. How can a business capitalize on this opportunity?
Since text communications commonly take place between users and their friends, family and colleagues, most people do not perceive messages that come from trusted businesses as advertising. Instead, they can "feel" very much like the one-to-one to one communications they are already having on the channel.
Here's how to capitalize on the "one to one" connection to build relationships and loyalty ...
- Connect regularly. You can't build a relationship if your messages are sent sporadically or infrequently. Make a commitment to sending either 2 or 4 messages per month and execute.
- Within the constraints of the character limitations, speak with a unique voice - with character!
- If it's appropriate, use "first person" ("I") and talk directly to your customer ("you") so that your marketing feels more like a personal communication and less like a mass broadcast.
- Be completely genuine in looking after the best interests of your customers.
- Don't be afraid to give before you take. Freebies and special offers provided exclusively to your mobile subscribers go a long way to enforcing brand loyalty and establishing a relationship.
- As much as possible, know your customer: their needs, wants, desires, income, education level and what have you. If your business has not yet created a customer avatar, I highly recommend that you do so; it's an invaluable exercise to determine a "big picture" overview of who your ideal client is.
Can you give an example of what a call-to-action on SMS advertising might look like?
The brevity of the SMS channel lends itself to very "matter of fact" communications. For best results, I recommend following this format ...
- Identify yourself or your business: This is optional, and less critical if you connect with your audience regularly (especially since messages appear in threads, allowing the customer to quickly scan previous messages to determine the source). Nevertheless, it's a smart tactic to ensure an optimal customer experience.
- Provide a short lead in: Also optional, but if you have the space, it can add a nice touch and a chance to connect and identify with your audience.
- The deal: Provide some highlights of your deal or offer. Get the best stuff out there! Make it exciting!
- Opt out instructions and other spam law requirements if necessary. A good SMS gateway will add all this automatically to your messaging template.
Acme Clothing: Celebrate summer! Through Sunday: $5 flip flops, $8 dresses, $8 polos, and more. Plus save up to 50% store wide! Reply STOP to end.
If your audience is primarily young people, you might change the "tone" slightly ...
Acme Clothing: Hey! Check this out: Save up to 50% through Sunday on everything in store! Plus BOGO on our skater Ts and shorts! Reply STOP to end.
While some short forms are acceptable - and even necessary - in text messages, always remember that every communication is a reflection of your business. While using common short forms (i.e., BOGO - "buy one get one"), is acceptable, be careful abbreviating words. While your customers will be accustomed to less formal communication in text messages, you really don't want your messages to look like they were written by an illiterate teenager.
Are there are times of day when SMS advertising is particularly effective?
To some extent this will depend on the business. In general, however, unless you have data to suggest otherwise, avoid connecting on the weekend when unsubscribe rates are considerably higher than during the week - up to 400% higher, in fact.
I'd recommend sending your messages mid-morning (between 9:45 and 11:30), when they are least likely to interrupt your customer.
As for the day of the week, that depends. If you have a retail business and the majority of your business occurs on the weekend, you won't want to send your message out early in the week in case your customers forget about your offer. Instead, aim for later in the week.
Which day? Friday is a hectic day for many people, so messages sent on that day might get lost in the shuffle. Thursday may be the perfect "sweet spot" for your business, although Saturday may also work well; but keep an eye on your unsubscribe rates and adjust accordingly.
Regardless of which you day choose to connect, I recommend tracking your results. One easy way to do so is to create a unique coupon code for your promotions and track the redemption rates. It's the only way to know for sure what works for your business.
Are there any industries that you've noticed are particularly open to SMS advertising?
Actually, I've found that the more competitive the industry, the more likely the management is to be interested in investigating every possible opportunity at their disposal to get the jump on their competition. Retail and food services are two industries that I've found to be particularly receptive to SMS advertising, but almost any business in the B2C space with forward-thinking owners/managers is interested in the opportunity.
For businesses just getting into SMS advertising, how might they go about gathering phone numbers?
Typically, phone numbers come from two places ...
i) Existing client lists.
This can be complicated and problematic, since the rules governing your ability to connect with current clients differs depending on the country in which you operate and on the applicable laws under which SMS marketing is governed. In the U.S., it's the TCPA, or the Telephone Consumer Protection Act.
In the U.S., having an existing business relationship with a person does not allow you to market to them via SMS. In an update to the TCPA in 2013, the law eliminated the existing business relationship exception. Now, you must have express written consent to send marketing texts or calls.
By far the easiest way to get existing clients subscribed to a mobile list is to connect with them on a channel that you do have permission to contact them (i.e., email), and ask them to subscribe with their handsets.
ii) Promotional campaigns:
For instance, a person who responds to a call to action like "Text SHOES to 58279 to receive an instant coupon for 20% off your next purchase and to receive exclusive weekly deals to your phone."
... By typing the word SHOES into their phone and sending it to 58279, the number is added to your mobile database and will now receive your weekly promotions.
This is known as a customer or handset initiated opt in, and these subscriptions are ideal; the fact that the subscription originated from the customer is considered "express" consent and is enough to keep lawmakers happy and no supporting documentation is necessary (however, make sure your SMS gateway service is keeping all subscribe/unsubscribe requests on file for a minimum of 6 months to provide proof of the subscription should you ever be challenged).
Why is it important they come by these numbers ethically?
First and foremost, the laws governing the sending of SMS are drafted to strongly discourage spamming. Anyone who does so - regardless of their intent - assumes a huge financial liability. Fines from government regulatory agencies are especially punitive; and of course, there's always a risk of privately launched civil suits. This is the risk you take if you connect with your audience without first receiving proper permission.
Second, while people are extremely receptive to the messages they receive on their phones, they are also much more sensitive as to what they perceive as spam. There is no better way to do irreparable damage to your business' brand and reputation than to start spamming your customers on their phones.
It runs contrary to the true spirit of SMS marketing; of having one-to-one conversations with your customers and building long-term, mutually-beneficial relationships! This doesn't start with spam.
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