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16.4 Short Message Service (SMS)

Learning Objectives

  1. Understand short message service (SMS) and how it works.
  2. Learn how SMS can be used in eMarketing.

Short message service (SMS) supports messages of about 160 characters in length, though it is possible to string several messages together to send longer messages. Messages can be sent from one phone to another, or from a PC to a phone and vice versa.

SMS also supports a service known as common short codes (CSCs)Short phone numbers to which users send text messages, usually to get something in return (e.g., a competition entry).. CSCs are phone numbers (short ones, as the name implies) to which users can send a text message from a mobile phone, usually to get something in return. CSCs can be used to sign up for services, to enter competitions, or to indicate permission (or to end permission) to receive marketing messages. Messages sent to CSCs can also be used to make a payment or a donation, with a set amount being deducted from a user’s prepaid airtime or monthly airtime bill.

Mini Case Study: CSC for Short-Term Insurance

Metropolitan Life, a South African insurance company, launched a new service called Cover2Go in 2007. Cover2Go is aimed at those on lower incomes in South Africa and has made innovative use of mobile phone technology in order to reach its target market. Cover2Go insurance can be purchased by SMS; a single transaction can purchase instant life insurance for six days.

All a customer needs to do to purchase coverage is to SMS their name and identity number to a premium-rate CSC. The system, powered by Clickatell, replies with a confirmation and policy number, requests the name of a beneficiary, and reminds the policyholder to inform an associate about the life insurance. All this costs the customer only about $1, which is automatically deducted from the phone’s airtime and gives him six days’ worth of coverage.

Cover2Go’s innovative use of mobile phone technology makes insurance incredibly accessible to this market. The use of SMS technology ensures that the insurance is easy to purchase, and deducting the cost of the coverage from the phone’s airtime makes it easy to pay for the insurance.

You can access the Cover2Go and Clickatell Web sites at http://www.cover2go.co.za and http://www.clickatell.com, respectively.

SMS and Marketing

With twice as many SMS users worldwide as e-mail, SMS should be a no-brainer for marketers. However, mobile phone users have proved reluctant to hand over their phone number for marketing messages, perhaps fearing a similar deluge of spam for which e-mail has such a poor reputation.

This is changing to some extent, with the prevalence of CSCs being used in marketing and advertising campaigns. As consumers are so comfortable with using text messages for their communication, no extensive education process is required to have consumers access marketing campaigns based on CSCs.

CSCs can be used to receive messages from consumers and to send messages to consumers. CSCs can be either dedicated (used by one company and presumably for one campaign) or shared. When CSCs are shared, keywords in the text message are used to separate the messages. There are two standard keywords that should always elicit a standard response:

  • STOP. Unsubscribe the sender’s number from the service.
  • HELP. A support request from the sender’s number.

Note

Another standard number is the international emergency number, which is in use in most countries in the world—112.

Sending Messages

Once prospects have given you permission to communicate with them and their mobile number, timely messages can be sent to their mobile phone. These can be promotional or sales messages, such as special offers in stores or information about upcoming events. On many phones, prospects need to at least open an SMS message in order to delete it. As well as this, mobile phones are generally kept with a prospect at all times, meaning that messages are more likely to be read very soon after they have been broadcast.

There are several ways that SMS messages can be utilized to complement an existing marketing strategy.

Customer Relationship Management

SMS updates can be an exceptionally useful tool for customer relationship management (CRM)A customer-focused approach to business aimed at fostering relationships with important stakeholders.. In the travel industry, hotel and airplane reservations can be sent by mobile phone, with updates being sent close to the time of travel. These short messages can include directions or details of a flight’s status.

When it comes to insurance claims or order processing, SMS updates as to the progress of a claim or order can reduce call center volume and go a long way to ensuring that a client feels valued and cared for.

Promotions

SMS messages present a way to send timely sales promotion information to a large database for a relatively low cost. These can be targeted to a particular time of day when prospects are most likely to be out shopping. SMS messages can also be used when promoting events.

Despite their pithy nature—these messages have a limit of 160 characters—they can carry a strong call to action.

Receiving Messages

CSCs are often used to receive messages from prospects or customers. They provide a fast, instant, and trackable means for the public to enter competitions, voice opinions, or make requests. Even better for a company, the costs can often be passed on to the consumer, meaning that it can be a cost-effective way to receive marketing messages.

As CSCs can be shared, keywords can be used to separate communications and campaigns. For example, a user might be asked to text the word “LUXURY” to a number in order to enter a competition.

Entering Competitions

Requiring less data-entry time than entries by postcard, SMS messages to a CSC are a hassle-free way to run competitions. Entries can be almost immediately entered into a database, with fast automatic responses to ensure that the consumer knows her entry has been received. In addition, costs can be passed on to the consumer by charging entry SMS messages at premium rates.

Note

Network and other charges mean charities do not receive the full donation.

Texting to Donate

A concept that is being taken up by the fund-raising community, text messages can be sent by donors to donate a fixed amount to a campaign. The fixed amount is deducted from the user’s airtime or added to their monthly bill.

Texting to Participate

Text messages provide an almost instantaneous way to elicit response from an audience, whether it be to a radio program, television show, newspaper or magazine advertising, or billboard. Some newspapers allow readers to send SMS messages instead of lengthy letters to the editor.

Combining Sending and Receiving SMS

Once users have indicated their interest by sending a text message, a company can then send messages back to them. In the United Kingdom, the mobile phone network Orange ran a successful campaign around movies. All Orange customers could go the movies for half price on a Wednesday. All they had to do was text the word “MOVIE” to a particular number, and in return they would receive a unique code with which to claim their discounted tickets.

In return, Orange then sent the list of prospects who requested discounts information about the movies being shown at their local cinema. How did Orange know which was the local cinema? Simple: all it had to do was match the unique code to the number it was sent to and the cinema where it was used.David Harper, “Unfolding a Decade in Mobile Marketing,” Flytxt, July 2009, http://www.flytxt.com/Newsletter/unfolding-a-decade-in-mobile-marketing.html (accessed June 20, 2010).

Key Takeaways

  • SMS (short message service) can be sent from one phone to another, or from a PC to a phone and vice versa.
  • Common short codes (CSCs) are short phone numbers to which users can send a text message from a mobile phone, usually to get something in return.
  • Users have proved to be reluctant to turn over their phone number for marketing messages.
  • Once users have provided permission to communicate with them and their mobile number, timely messages may be sent to their mobile phones.

  • There are several ways that SMS messages can be utilized to complement an existing marketing strategy:

    • CRM (customer relationship management)
    • Promotions
    • Receiving messages
    • Entering competitions
    • Texting to donate
    • Texting to participate
    • Combining the sending and receiving, where users text to opt in for something, and the marketer sends them something in return

Exercise

  1. It can be considered that SMS (short message service) to the mobile phone is what e-mail is to the Internet. In what ways is this true, and how can this be used by marketers?