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StrategyDec 07, 2012

Connecting to a Younger Generation… And It’s Not Facebook

James Skidmore

Introduction

It is an understatement to say that social media has come to the forefront of most organizations over the past few years. Social media is considered the Holy Grail for connecting with teenagers and young adults, and, increasingly, our entire population (Facebook just recently surpassed one billion users!). The importance of this trend in our 21st century society is rarely questioned.

However, there is another trend that is even more prevalent in daily life than social media consumption, a trend that is greatly underutilized by corporate America and one that offers huge opportunities to connect with customers: texting.

A recent Pew report shows that the average young adult sends or receives 3,200 text messages per month, or 110 per day. Adults that use text messaging, on the other hand, send or receive 42 messages on a typical day. Thirty-one percent of the US population prefers text messages to phone calls. Despite its brevity and impersonal nature, text messaging is clearly a mainstay of communication for younger generations. What better of a way to connect with a younger audience than directly plugging in to this communication lifeline?

Though it relies on a phone as the medium, connecting with current and targeted customers via text message is far different from the telemarketing of the past. First of all, texts are short by nature and are consumed in mere seconds. Second, contrary to phone calls, which can be “screened,” text messages are nearly always read, and the recipient most likely is rarely separated from their phone. Text messaging thus presents an enormous opportunity to engage with current and potential customers in easy-to-digest, non-obtrusive ways.

Why To Connect

There are many tactics that can be used to reach target audiences via text messaging, but all of these tactics revolve around enabling two basic strategic aims: marketing and “application extension.”

The first strategy, marketing, seeks to use text messaging to increase brand awareness and brand loyalty by employing texts in innovative ways such as promotions and discounts. Marketing via text message can be a quick, successful way to win more business from existing customers. In a recent survey of mobile users, 95 to 98 percent of text messages are read within minutes of receipt. Another survey showed that 30 percent of consumers have interacted with a brand via text message. Additionally, mobile coupons are ten times more likely to be redeemed than traditional coupons.

Marketing programs can range from simple promotions to more creative campaigns to draw in customers. For example, McDonald’s conducted a campaign in Italy to allow customers in the restaurant to enter a sweepstakes via text message and immediately win a prize. Within five weeks, the restaurant chain had already seen an astounding 1.5 million customers participate with a 25 percent response rate.

The second strategy, application extension, seeks to extend the reach and functionality of a business’s software or services by utilizing text messaging. Text messages can be a means to quickly gain the attention of a user when they are not in front of their computer. To name a few of the many possible examples:

  • Notifications of key metrics reaching a certain threshold in a warehouse management system

  • Alerts of new messages being received in a social networking site

  • Patient appointment reminders in a doctor’s office scheduling application

  • Security alert in the case of an attempted password breach in any type of system

For example, Orbitz launched OrbitzTLC Alerts as a means of engaging customers and reinforcing branding by providing real-time travel information and updates. Hundreds of text requests were received the first day of the campaign, and after two weeks, the response had exceeded expectations. Orbitz also received a significant number of opt-ins for future texting, indicating that short-term promotions can potentially provide long-term customer engagement.

How to Connect

Once you have an idea on how your company can utilize text messages for either marketing or “application extension,” the next step is to determine if you have the necessary in-house resources to make it happen. If you lack a mobile vision and/or technology resources, then you may consider hiring a mobile-focused firm for their strategic and technological expertise. However, if you already have the strategy and the development resources, then the “last mile” from a technical standpoint is choosing your SMS provider.

Over the past five or six years, the commercial SMS provider market has grown significantly to offer an easy hands-off approach for sending text messages automatically and on the fly. These providers handle all of the technical intricacies of sending and receiving the texts, and they give customers simple API access to the SMS functions.

When selecting an SMS provider, a few key criteria should be prioritized and evaluated based on your business’s needs.

  • Feature Set: Should the text messages appear from a dedicated phone number? Is a short code necessary? Should the system handle inbound (receiving) SMS? Providers vary widely in available functionality, so this is one of the most important factors in the decision making process.

  • Pricing Structure: Some providers require the purchase of SMS “credits” ahead of time, and others charge per inbound/outbound message. Depending on the provider, prices can get as low as $0.01 and less per SMS. How many text messages will you send per month? Which option makes the most sense based on your volume?

  • Coverage: To what countries will you need to send text messages? Check the list of covered countries and cell networks. Also note that pricing often varies per country.

  • Quality of Network: Be sure to perform extensive testing for mission-critical SMS applications to assess the quality of the provider’s network (e.g., time-to-delivery and percent lost).

  • Throughput: Will you need to send messages in “rapid-fire” mode (e.g., greater than 1 SMS per second), or is 1 SMS per second reasonable? If it is necessary to send faster than this rate, providers have different methods for throttling—some require the application to self-throttle, and others are fine receiving more than 1 SMS per second and will throttle on their own. For high-throughput messaging, consider a provider with short code capabilities (30 messages/second), albeit at a much higher cost.

  • Ease and Depth of API: Is your application able to easily interface with the provider’s services? How modern are the APIs (e.g., are they RESTful)? Do they provide the necessary information and/or functionality?

  • Customer Support: What level of support is needed? Is technical support necessary?

At Credera, some of our favorite commercial SMS providers include Twilio, Clickatell, and Nexmo. All three charge a relatively low rate per outbound SMS (~$0.01) and offer a variety of features beyond basic sending and receiving.

Mind Your Manners

Wielding the power to connect with customers via text message opens the door to many opportunities, but like any form of power, it must be used carefully. There is a fine line between offering useful text messages to customers, and annoying them to no end. If you plan to utilize SMS in your business, please do yourself and your customers a favor by complying with these four simple SMS etiquette tips:

  • Be considerate of the time. No one likes waking up in the middle of the night thanks to the buzzing noise of a new text. Don’t forget that your recipients may be dispersed across various time zones.

  • Only send to recipients that have opted in. Whether they opt in via text, online, or through another means, be sure to limit your recipient list only to those that are willing to receive messages. It is extremely poor etiquette to send messages to users that have not requested them, and as a result the end user would see your organization in a negative light (AKA, no spam!).

  • Always provide a way to opt out. End each text message with something to the effect of “Reply STOP to unsubscribe.” And of course, be sure to follow through with the opt-out process.

  • Always deliver true value. Sending out too many messages will dull the effect. Have a legitimate purpose behind every text, and give the recipients a clear call to action. It also wouldn’t hurt to give them something for free every now and then to show them your appreciation for subscribing to the SMS list.

Credera’s Experience

If you are interested in learning how to use text messages to grow your business or increase the reach of your software, please visit our website to get in touch and hear more about Credera’s SMS experience.

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