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The mobile channel offers profitable opportunities for marketers, experts from SoundBite Communications said during the opening session of the Loyalty 360 Engagement & Experience Expo.
Mobile provides aggregation of channels, with SMS messaging, the Internet and telephone calls all available from a single smart device, said Jean Gonzalez, senior account director, mobile services group.
The mobile channel is expected to show strong growth this holiday shopping season compared to last year, with 80 percent of smartphone users expected to use their devices to aid in their shopping experience, and a large percentage expected to actually make purchases with their mobile devices.
Mobile communications also drive down the costs of servicing customers, according to Gonzalez. In addition to reducing costs for companies, the mobile channel also plays into customer preferences. Increasingly, customers want to be contacted via SMS messaging rather than e-mails or any other means. Response rates for mobile marketing are 30 percent, compared to 6 percent for e-mail, 2.6 percent for direct mail, 2.5 percent for banner ads and 0.7 percent for search.
However, marketers also have to be aware of regulatory rules regarding mobile communications, particularly because consumers switch mobile numbers so often. The FCC prohibits prerecorded voice messages and autodialed calls or text messaging to any cell phone, pager or other mobile device, unless it’s an emergency or the caller has advance written permission (an opt-in) from the recipient.
The penalty is a fine of as much as $16,000 per violation. So marketers have to be especially careful that they are reaching someone who has indeed opted in for the communication. So it’s essential that loyalty marketers keep customer lists clean, preserve audit trails and immediately process opt-outs.
The opt-out decision can be different for different media. Some consumers prefer SMS messages while others prefer e-mails. Other customers want different communications for different types of messages (there are also legal restrictions for some communications).
SMS messaging can also help power e-mail, according to Cris Bjelajac, senior director, channel programs. Text messages can be personalized to provide higher response rates and a superior customer experience. The cost per lead is only 20 cents, compared to 45 cents for search, 55 cents for e-mail, $2 for banner ads and $10 for direct mail, according to Piper Jaffray research.
“The challenge is getting customers to respond to the messages,” Bjelajac said.
Among the most successful ways of generating customer response, according to SoundBuite, is to deploy text keyword campaigns.
For example, retailer Fashion Bug used a keyword campaign offering a $5 instant savings coupon for new customers texting a keyword to a specific number. The retailer gained 30,876 new opt-ins in 11 days, an average of 2,807 per day. These new customers generated $1.8 million in sales, with a gross margin of 43 percent.
Similarly, a comparison of a print offer vs. a mobile offer found that the later resulted in average sales of more than $300, compared to more than $90 for the mobile coupon.
According to a prepared statement from Tim White, Fashion Bug senior vice president of marketing: “The combination of the storewide sale with the mobile-based rebate offer was extremely effective in growing our mobile opt-in database.”
To achieve the best results, SoundBite recommended building the mobile marketing database with a combination of in-store signage, mobile sites and aps, mobile coupon clubs, sweepstakes, existing marketing, Web forms, refer-a-friend programs and live events.
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