The New Frontier for Retailers
It's here to stay and it will grow--now is the time to embrace it.
Posted May 1, 2006
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Consumers of every age and demographic have embraced the use of cell phones. They are a means of efficient, immediate, and personal communication that land lines can't be. For retailers and direct marketers, they are the new frontier. The ability to tailor a sales pitch or special invitation to an individual based on previous shopping habits was a dream until direct marketing came into the picture. Direct mail and email marketing have become standard practices as retailers have sought to form lasting relationships with consumers. Voice messaging, and more recently text messaging, are now enabling marketers to reach consumers with relevant messages and targeted incentives in an even more personal manner. The United States mobile messaging market has been maturing more slowly than Asian and European cultures, but this is changing. Europe and Asia use short message service (SMS) data applications as their primary source of communication, and that practice is also becoming much more prevalent in this country. In the U.S. 67 percent of the population subscribes to a mobile phone service, with an estimated 36 percent of the subscribers using some kind of mobile data application, as reported by Yankee Group. Of those users, 72 percent use SMS text messaging. The time is right for retailers to embrace the technology of text messaging. Mobile marketing provides retailers the opportunity to reach customers with a reminder or incentive anytime, anywhere. More often than not, it is outside of the home, which allows for the opportunity to impact customers while they are out making shopping decisions or in transit. Text messaging is a very targeted, private medium. Because a cell phone number is a unique identification number associated with an individual person, marketers must be respectful of the privacy and preferences of users. In essence, when a person gives someone her cell phone number she is providing an opportunity to be contacted on a device that is carried in a purse or pocket, which makes for a very direct, personal communication channel. For those retailers that already use a voice messaging service as a means of direct marketing, text messaging is an ideal complementary, effective marketing tool. Today retailers have the ability to drive their customers right where they want them. Marketers can send targeted messages relative to what their customers are already purchasing from them, based on individual customer history. The reason why a retailer would send someone a message then becomes much more important, because it is so personal. Text messages command a quicker reaction, and require only five to 10 seconds of the customer's time. Giving customers the option to receive text messages still keeps the service personal enough that an individual can refuse to receive messages by replying with a negative response. Many retailers are exploring options to entice the customer to opt in by offering things like ring tones, screensavers, or other promotional incentives. Such promotions are determined by customer demographics and the retailer's prerogative. In order for a retailer to obtain a customer's cell phone number, it has to be introduced through a request or creative approach like a Web site, email, customer service request, and in-store print or direct mail campaign. The customer is more likely to open up the channel of communication when a retailer gives the customer something of value in exchange for sharing her cell phone number. Compliance is of utmost importance concerning this service. Commercial text messaging is regulated under federal law with the TCPA (Telephone Consumer Protection Act) and CAN SPAM (Controlling the Assault on Non-Solicited Pornography and Marketing Act). Requiring a customer to opt in is an expression of prior authorization. A customer has the option to either accept or decline the text messaging service. It is expected that this technology will be received well based on the fact that most email submissions require a similar verification after the initial entry. The approach to text messaging should not be any different than the approach to voice messaging. Consider it a superior level of customer service, which would come in the form of an experienced team and excellence in execution from the service provider. A mobile marketer must pay close attention to the details and work closely with the retailer to send out the best message to the appropriate customers. It is also imperative that these best customers have text messaging capabilities as well as give comprehensive feedback. Some companies notify the retailer of deliverable and non-deliverable messages, so they avoid unnecessary future expenditures. Benchmarking is a vital aspect of determining ROI and the effectiveness of a campaign for comprehensive feedback.
Source: eMarketer, August, 2005 Today's technology allows people to do more than just use the device for phone calls--the opportunity for retailers to send personalized video content is certainly on the horizon, and SMS is the next generation in direct marketing. Like the Internet and email, text messaging is here to stay and grow. Now is the time to embrace it. About the Author Scott Springer is vice president, strategic marketing services, for SmartReply, to which he brings more than 15 years of professional experience. He has gained extensive experience in customer database targeted marketing programs, technology-enabled analytics, and the strategic application of customer data that leverages database technology. Please visit www.smartreply.com
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