Mobileengagement: Why SMS is stillthe biggest missedopportunity

GROUPOX YGEN

Contents

About the author ........................................................................................................................................... 4

I just can’t live without my phone ............................................................................................................ 6

...and you’re not the only one ................................................................................................................... 8

What is SMS marketing? ............................................................................................................................. 10

Perception versus reality ............................................................................................................................ 12

SMS = ROI ........................................................................................................................................................ 14

And yet, SMS remains grossly under-utilised ...................................................................................... 16

The common misconceptions about SMS marketing ....................................................................... 18

Misconception #1 - It’s not trackable ................................................................................... 20

Misconception #2 - It’s not engaging .................................................................................. 22

Misconception #3 - It’s too time consuming ...................................................................... 24

Misconception #4 - It’s invasive ............................................................................................ 26

Misconception #5 - It lacks the ability to segment and personalise ........................... 28

Misconception #6 - It’s difficult to integrate with other channels ................................ 30

Misconception #7 - It’s just for retail .................................................................................... 34

Misconception #8 - It’s only for small business ................................................................ 36

Now is the time to turn on to SMS marketing ..................................................................................... 38

End notes ......................................................................................................................................................... 40

hello.About the author.For more than ten years, Mark Grainger has been a key player in digital marketing in the UK and Ireland, helping businesses amplify their marketing activities by using the latest technology. With extensive experience gained in the marketing services industry,he specialises in SMS marketing and customer relationship management solutions. He brings a depth of understanding and logical thinking, in order to achieve maximum brand penetration, alongside the technicalknowledge to deliver.

It is indisputable that we have become attached to our smartphones in a way that we never have to other technologies. The Smartphone has now become the essential tool of everyday life. We sit in front of the television and expect to be able to interact with our programme of choice via social media or text messaging. We search, shop and pay using a handset which, as little as 20 years ago, was restricted to making phone calls and sending SMS messages. What’s more, we expect to be connected constantly, and want WIFI available wherever we are, at home, in a shopping centre, or even on the beach.

Consumers use emotional language to describe their relationship with their smartphones, such as “I just can’t live without it” or the new smartphone is “life-changing”. Hyperbole? Perhaps, but it is undeniable that the smartphone offers marketers an alternative channel to acquire, engage and convert consumers, which is highly effective.

“Mobile text messaging, the first 160-character dispatches first popularised by nimble-fingered teenagers, may be the closest thing in the information-overloaded digital marketing world to a guaranteed read.”

Steve Olenski Forbes magazine11

I just can’t live without my phone

6

There are

6.8 billion people on the planet and

5.1 billion of them own a cell phone2

...and you’re not the only one

of UK adults have a mobile phone – up from

50% in 20003

of Australians have purchased clothing or other fashion

accessories via mobile phone4

of the South African population is expected to have a mobile

phone by 20195

Ireland officially has more mobile phones than people

with 1.185 phones for every man, woman and child6

If you lose your wallet, it will take you circa 26 hours to report it and get your cards cancelled – if you lose your mobile phone the average

response time is 68 minutes7

68% of smartphone users check their

phones once an hour8

70% of all mobile searches result in action within

one hour 9

50.3% of e-commerce comes from mobile

devices.10

93% 25% 76%

What is SMS marketing?Let’s start at the beginning, by defining what SMS marketing is and, more importantly, what it isn’t. SMS is a text message sent to a mobile phone. Within marketing, it affords the seller the opportunity of making an offer to potentially large groups of customers, quickly and easily.

Crucially, SMS marketing is permission-based, which means that each text recipientmust have given permission, in advance, that they wish to receive messages from aspecific company. Permissions are derived from data collection, which can be a simpletext, email opt-in or opt-out capability or web entry.

10

Perception versus realityTwo decades ago the only form of mobile messaging was SMS, a pragmaticmobile data service which had broad reach, standardisation and carrierinteroperability.

Unfortunately, in the minds of many marketers, little has changed. For too many marketers SMSremains a blunt instrument, characterised as a splurge of unwanted texts that pester and harasspeople, and, even worse, have the potential to land you in trouble with the information authorities.Others regard it primarily as a retail channel, which is incapable of being utilised in other sectors.

The reality is that SMS is now the consumer’s chosen mode of communication.

Our own research at Oxygen8 has demonstrated that SMS messaging is the most popular mobileservice, outstripping browsing email, photography and social media.

What’s more, messaging capabilities have expanded and are now capable of delivering a variety of content, from video through to redeemable coupons and beyond, which is immediate, contextual, and serves customers right in their moment of need. Consider these following statistics:

The open rate of SMS is

Purchasing as a result of a relevant SMS

Consumers that prefer SMS to

using apps

SMS that are read within three minutes

Average response time for a SMS

Consumers that think more businesses should use SMS

98%

90%

64%

90 seconds

81%

64%

12

15

13

16

14

17

12

SMS = ROIHowever, that that isn’t the only perceived problem. The big issue for SMS marketing cheerleaders is that marketers continue to place more faith in other mobile channels, such as email, search and app development, which do not have the proven ROI that SMS marketing enjoys.

Consider the following

of apps are only get used onceof global consumers agree that they should uninstall apps on their phones due to lack

of use

of consumers will wait five seconds for a web page to load on their mobile device

before abandoning the site

of customers are more likely to purchase when mobile offers are part of a

multi-channel campaign

18

The open rate for email marketing is 22%

19

21

20

22

99%

74%

68%

43%

14

And yet, SMS remains grossly under-utilisedHowever, there is a paradox at work here. Despite impressive statistics both for smartphone usage and SMS marketing’s ability to deliver to the bottom line, it remains under-utilised as part of the mobile marketing mix.

All the statistics suggest that mobile marketing, encompassing search, email and social media and SMS, is growing.

A recent study of multi-channel marketing budgets identified that mobile accounts for 12% of marketing spend23, which means that SMS is only a fraction of the marketing budget and a tiny fraction of the mobile budget.

What’s more, a StrongView study indicated that mobile marketing budgets are increasing, but marketers continue to place more faith in email marketing and social media.

The “2015 Marketing Trends Survey”24 demonstrated that over 40% of marketers expected to put more budget into mobile marketing in the coming year, but nearly 49% expected to increase their social media budgets, and over 60% were putting more money into email.

So, we have a situation where the consumer is all but unable to function without his or her smartphone, and there is a proven track record for SMS marketing. And yet, more marketing budget continues to be put into a tactic which gets less than a quarter of SMS’s success in terms of open rate, namely email marketing.

Something, somewhere is wrong, which brings us to popular misconceptions about SMS marketing.

16

The common misconceptions about SMS marketingIt’s clear that, with its ability to engage and convert consumers, SMS is chronically under-used as part of the mobile marketing mix, particularly in comparison to email and app development. Too many misconceptions continue to exist which deter marketers from utilising an effective and proven channel. So, let’s tackle some of these misconceptions one by one.

18

Misconception #1 It’s not trackableIn the era of payback, ROI and measurability, trackability is everything, but too many marketers continue to believe that SMS marketing offers no metrics on which to base success or failure. This may have been true in thepast but it’s not today. Most SMS marketing service providers have the abilityto intelligently track the success of your campaigns and should, at the veryleast, be able to gauge campaigns based on five key metrics:

1 Response rates i.e. how many texts elicited a response of a text or code

2 Offers used i.e. when a customer takes advantage of an offer or coupon

3 Call tracking i.e. the number of customers who called a number for more information

4 Click tracking i.e. clicks through to a website from a URL-shortening link, such as bit.ly

5 Text marketing short-codes and keywords, which can be used as a call-to-action and a tracking method for all forms of campaign activity.

Email marketing

Social media

Mobile marketing

Search (SEO/PPC)

Online diaplay advertising

Tradeshows & events

Direct mail

Public relations

Print advertising

Radio/TV advertising

Other

40.2%

38.3%

37.4%

18.0%

16.9%

16.7%

11.8%

7.7%

8.2%

Data Source : StrongView

23.4%

17.8%

33.2%

5.9%

22.3%

16.8%

8.0%

5.9%

1.3%

5.1%

4.3%

48.9%

60.7%Email marketing

Social media

Mobile marketing

Search (SEO/PPC)

Online diaplay advertising

Tradeshows & events

Direct mail

Public relations

Print advertising

Radio/TV advertising

Other

% decreasing spend % increasing spend

Marketing spending plan for 2015, by programBased on a survey of 377 global business leaders, almost three-quarters of whom are with

companies headquartered in North America

December 2015

20

Misconception #2 It’s not engagingAnother common fallacy. Of course SMS is engaging, it’s engagingbecause consumers have opted-in to receive the messages. Theyhave made a conscious decision to give brands their personal mobile details which offers the opportunity to market directly to a captive, and loyal, target audience that is already ‘warmed-up’.

What’s more, advancements in SMS functionality means it’s even easier for yourcustomers to engage in two-way mobile communications that include branded pictures,videos, and audio with HTML5 pages embedded via a URL within the body of the SMS.And how does this fit into the customer lifecycle? Well, however best suits you. It is easyto add mobile tickets, alerts and coupons to transactional messages, or even follow upwith surveys to glean valuable customer intelligence.

22

“If your plans don’t include mobile, your plans are not finished.”

Wendy Clark, President Sparkling Brands and Strategic Marketing at Coca Cola

Misconception #3 It’s too time consumingNow, we really do need to spear this one. In today’s busy lives people want short, sharp and to-the-point messages. Nobody has the time, patience or attention span to read long novels of communication. However, a short text message comes in the perfectly compact format that customers are familiar with and prefer. Modern SMS campaigns, particularly those using a cloud-based platform, can be set-up very quickly. SMS marketing can be integrated into nearly all software platforms, including marketing automation, CRM and EPoS, which means that getting an SMS campaign up and running is extra quick and easy.

In terms of designing the campaign, marketers just need to switch on their laptops. It is easy todesign, edit, schedule and create optimised landing pages in minutes. Mobile forms can also beeasily created which collect information and build the database. With only 160 characters to workwith (although it is possible to increase this number using multi-part, concatenated messages) italmost always takes longer to decide the message than it does to set up the software.

24

Misconception #4 It’s invasiveSMS marketing is not invasive, at least not if it’s used responsibly. It’simportant that you partner with a supplier that lives and breathes bestpractice, avoiding any violation of your customers’ right to privacy.

Most importantly it is vital that you gain permission from the people you plan to engage byemploying a clear, unambiguous opt-in procedure, because gaining permission saves time andmoney. It is a method of qualifying your leads or customers. Each message costs money so thismethod of qualifying leads ensures that the consumer wants to receive messages, and avoids anywaste of the budget.

What’s more, sending unsolicited messages creates a negative impression of your businessprompting subscribers to avoid the service and file complaints on more public channels, such associal media and forums, which will negatively impact brand reputation.

Top Ten Rules for SMS marketing

Top Ten Rules for SMS marketing

1 Respect your customers’ right to privacy

2 Only message those who have given you permission to contact

3 Allow customers to opt out quickly and easily if they want to

4 Be upfront about who you are and never hide your identity

5 Only send messages during your business hours – if you are closed don’t message

6 Never purchase lists of numbers

7 Only send texts which are relevant and offer real value to your customers

8 Avoid overt sales messages and marketing jargon

9 Use video and images where possible to improve customer interaction

10 Remember: less is more, don’t over-use SMS

26

Misconception #5 It lacks the ability to segment and personaliseSMS marketing is often unfairly labelled as mass marketing. This label is entirely false. With the right platform, marketers have the opportunity to highly segment their messages to a handful of customers, or send thousands of SMS messages to an entire list.

Without segmentation you risk intrusion, but it is only available when the CRM database is tightly integrated into the SMS platform. Once this has been achieved, it is possible to extract predictive, behavioural and factual information on each number, which can then be used to profile, predict and analyse consumer behaviours, in order to deliver targeted and personal messaging campaigns to your customers – ultimately driving them to mobile sites via trackable in-message URLs.

At the very least I would recommend segmentation by product-lines purchased, demographics, sales history and VIP clients, who can be targeted with exclusive loyalty programmes. But, the potential for segmentation is enormous, with everything from geography through to psychographics, in other words, activities and interests.

“Target marketing … recognises the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs.”

Screen Magic blog25

28

Misconception #6 It’s difficult to integrate with other channelsA misconception that is fundamentally wrong.

Application Programme Interfaces (APIs) have the ability to seamlessly connect SMS with other channels and databases, allowing marketers to deliver multi-channel campaigns. The ability to deliver mobile messages, mobile vouchers and tickets, and combine online landing pages and mobile payments, all opens up a world of on-the-go opportunities for creative marketers to sell their products.

With the massive uptake of PayPal and the rising trend towards mobile payments, M-Commerce and mobile tickets, mobile messaging gives you the unique ability to target your customers in a highly effective, responsive and cost effective method to encourage impulse purchases, cross-sell purchases, and drive loyalty incentive take-up.

Mobile surveys are easy to build and have much higher response rates than other mediums. Send them by text and you get the opportunity to thank your customers for their feedback whilst gaining repeat bookings by replying with exclusive offers. Integrated into your existing systems, collecting customer satisfaction feedback has never been easier.

“It’s great having Oxygen8 as a partner, the multi-channel technology solutions mean we can easily add further functionality to our existing systems with the use of APIs as we grow our business.”

Tim Rooney Commercial Director, Experian Consumer Information Services

“Mobile is becoming not only the new digital hub, but also the bridge to the

physical world. That’s why mobile will affect more than just your digital

operations - it will transform your entire business”

Thomas HussonVice President and Principal Analyst at Forrester Research

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User receivesconfirmation SMS

Payment success

Item added to basket to pay

Payment failed

Option

Option

Oxygen8 call connect

SMS sentto user

User viewsHTML5 built with MSISDN tracking

Payment success

Payment success

PCI - Automated IVR payment

PCI - Call centre representative takes

payment

Fully automated IVR

1

2

Crucial customer information pulled

User receivesconfirmation SMS

User receivesconfirmation SMS

3332

Take this for example…This graphic illustrates how multiple technologies interact with each other, passing important information securely, within a fraction of a second, through the use of powerful APIs. It’s actually a very simple organisations are losing revenue because they haven’t integrated the right technology to streamline transactional processes.

Our clients have reported several benefits, such as automatically recovering lost revenue, an improved customer experience, reduction the operational costs of call centres, diminished human error… Oh and it’s all PCI compliant.

Misconception #7 It’s just for retailWell, it’s certainly true that retail has been at the forefront of SMS marketing, but that does not mean it is solely a retail channel.

If you’re a doctor, dentist, lawyer, consultant, or anyone who makes appointments (and relies upon people showing up to those appointments) text message reminders are an excellent way to increase your appointment conversion rates.

Recent Forrester research26 suggests that the financial, utilities, logistics, and food and drink sectors, are all embracing SMS marketing as a way of acquiring, engaging and converting customers.

In fact, it would be no exaggeration to say that the financial sector is almost prolific in its use of SMS, with three quarters of customers having received some sort of SMS contact, in regards to service reminders, ID and order confirmation. What’s more, consumers appear to understand that there are no data security implications, with 78% declaring that their financial institution cares about the security of their information of confirming PIN numbers and passwords, according to Loudhouse SAP research27.

With online retail going from strength to strength, the logistics sector has also been quick to utilise SMS. Customers, unwilling to wait around the house all day for deliveries, can

receive text messages giving them a precise time. In fact, according to Loudhouse SAP research, 83% of logistics customers say that the use of SMS makes them feel as if “they care about my delivery / parcel”28. Similarly, in the transport sector, be it train, plane or bus, SMS has the ability to get a customer’s attention and relay vital information, from a change in flight times to delays for a bus, which can keep customers informed and, crucially, happy.

Surveys are another way for companies to interact with their customers. Using intelligent interactive SMS software, customers can be surveyed around their intentions, attitudes, and overall satisfaction at key times during the year. Oxygen8 is currently using the survey builder functionality to deliver SMS surveys for a number of clients.

Depending on the response to each question questions. Typically these are between 4 and 5 questions long (there can be more if deemed practical) with a “yes/no” or “rank on scale of 1-5” type response, along with the inclusion of qualitative questions.

“We wanted to let the customer know exactly where their parcel was and when it would be delivered. We handle more than 200 million collections and deliveries each year and we

wanted to start engaging more with the consumer directly to grow brand recognition.”

Mark Pettit Director of Sales and Marketing at Hermes

35

Misconception #8It’s only for small businessSMS marketing is for all business not just small business. Certainly, small business has been quick on the uptake, but bigger businesses and organisations have followed suit and are leveraging the power of SMS marketing.

Our own experience is that, over the past year, some of the world’s largest companies have been won over by the potential for SMS in their own sectors for reliable, secure and interactive two-way global messaging.

Why is this? Because businesses want to leverage SMS to optimise business operations and enhance relationships with customers and employees worldwide.

Purchase tracking, alerts and notifications, as well as monetary transactions via SMS, are all high value and important aspects of a service or overall brand.

The key lies in SMS’s ability to add value to the customer engagement process ushering them towards a transaction.

All the evidence suggests that even the simplest of messages which remind, protect and advise customers, can have enormous benefits.

ExploreExploreAskAsk

BuyBuyUseUse

DiscoverDiscoverEngageEngage

Help existing customers discover new products.

Alerts customers to products or services for which they have expressed interest in knowing availability.

Alert customers to flash sales.

Remind customers to use coupons or rewards.

Remind customers to take action (e.g. comply with treatment, take action to meet a fitness goal).

Help customers get better use of products (e.g. recharge battery or replace components).

Remind consumers to replenish goods or refill prescriptions.

Alert customers to opportunities unique to loyalty members near shops.

Link in-store visitors to video or other rich content with product information.

Use two-way messaging to facilitate product decisions.

Communicate fraud alerts.

Reset passwords.

Remind consumers to make payments or to attend appointments.

Source : April 14, 2014, “The Customer Life Cycle: A Blueprint For Customer-Obessed Enterprises” Forrester report

Messaging is an effective tool to drive sales and customer engagement

36

Now is the time to turn on to SMS marketingThe purpose of this paper was to set out clearly and simply the case for SMS marketing, but, it is worth considering one more big reason why SMS is only likely to grow further as a marketing channel. The demographics are all in SMS’s favour.

Consider this: in the 18-24 age group 37% of respondents to the recent Loudhouse SAP survey checked their handsets every ten minutes compared to only 9% of respondents in the 55-64 year old age group.

The younger generation will grow older and mature, but I am willing to bet that phone ‘checking’ will not tail off as the smartphone children grow up.

We have created a generation who are equipped with the latest technology and expect to engage with brands almost constantly; have exceptionally high customer service expectations and are spontaneous, even fickle, in their purchasing decisions.

The irony is that this generation, in marketing terms, is most engaged and most responsive to SMS, a technology that is decades older than the smartphone. A further irony is that, on the whole, marketers have not yet caught onto this phenomenon. SMS marketing remains, all-too-often, overlooked or given an insufficient slice of the mobile marketing budget.

Done correctly, customers will quickly and easily opt into an email list and organisations, across a wide variety of sectors, not just retail, will be able to supercharge their main drivers, be it traffic to a website, sales and even brand awareness.

SMS marketing is, truly, the biggest missed opportunity. What’s stopping you?

“Consumers are wholly integrated with their handsets and interact with brands

on a one-to-one basis via SMS many times a day. [SMS] is welcomed and

embraced as a communications channel.”The SMS Advantage

How enterprises can leverage the power of SMS Loudhouse SAP 201430

38

End notes 1 Forbes.com “Pulling back the curtain on text message mobile marketing”, March 2013

2 Mobile Marketing Association Asia

3 Mobile Operators Association, Communications Market Report 2013

4 Mastercard Worldwide “2014 Mobile Shopping Survey: Asia Pacific Edition 2015

5 eMarketer 2015

6 ComReg

7 Unisys

8 Loudhouse SAP “The SMS Advantage” 2012

9 Mobile Marketer

10 Shopify

11 Forbes.com “Pulling back the curtain on text message mobile marketing”, March 2013

12 Techipedia

13 IPSOS Observer

14 Loudhouse SAP “The SMS Advantage” 2012

15 Singlepoint “Conversational Advertising”

16 CTIA.org

17 Loudhouse SAP “The SMS Advantage” 2012

18 Techipedia

19 Blackberry

20 Loudhouse SAP “The SMS Advantage” 2012

21 Gomez

22 Responsys

23 Lewis PR, “Multi-channel Marketing: A study highlighting current approaches and investment, opportunities and key challenges” – July 2nd 2015

24 The StrongView “2015 Marketing Trends Survey”

25 Screen Magic blog, “Market Segregation and SMS Campaigns”, June 2011

26 Forrester research quote needs sourcing

27 Loudhouse SAP “The SMS Advantage” 2012

28 Loudhouse SAP “The SMS Advantage” 2012

29 Forrester Research diagram

30 Loudhouse SAP “The SMS Advantage” 2012

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Engage is a cloud-based mobile engagement platform for creating interactive services and marketing campaigns. With the tools to help you enhance and improve

interactions with your customers, you can fully embrace the power of mobile as a multi-channel tool, ensuring personal and meaningful engagement every time.

engage

Book a demo today

GROUPOX YGEN

www.oxygen8.com +44 121 621 2000 sales@oxygen8.com

12th Floor, Lyndon House, 58 - 62 Hagley Road, Birmingham, B16 8PE, United Kingdom

Smarter choices = better engagement