We've all heard the buzz about text messaging or SMS (short message service). But exactly what is it? Asia and Europe have been using text messaging for several years now. Here in the U.S. however, list brokers and marketers aren't quite clear as to what the service provides, what to look for in an SMS list and who can benefit from using it.
Text messaging is a similar to e-mail but with quicker delivery—think a message on steroids. Once a message is deployed, an offer is instantaneously displayed on cell phones of consumers or business owners that have opted in to receive information and promotions via this communication channel. Marketers now have the option to deploy text messaging blasts to targeted individuals in a real time fashion and usually at a reasonable cost.
A recent Nielsen Mobile survey showed that U.S. mobile subscribers were now sending more text messages than making cell phone telephone calls. "A typical U.S. mobile subscriber sends or receives 357 text messages per month, compared to placing or receiving 204 phone calls."
So who should be using text messaging to target prospects and what lists should be considered to ensure best practices that meet our industry standards?
List brokers and marketers who want to target a younger audience should consider mobile marketing as part of a multi-channel platform. Statistics show that the 18-40 year old cell phone user is also the group with the highest text messages per month. Research also suggests that 80% of this audience carries their cell phone with them at all times. A receptive market to target with the right offer!
Lists that brokers should consider will have 100% opted in records. Similar to opted in e-mail records, you want a responsive audience and want to abide by industry standards. Mobile marketers should also request recency to increase response. Lists that have a monthly hotline should be considered, as the more current the data, the more responsive the list in many instances. Lifestyle selects are also available on some of the text messaging lists in addition to geography and gender. Lastly, many of the lists also have postal or e-mail components to expand the marketing channels.
Text messaging can be used by advertisers who want to target large quantities of consumers or business owners in real time. Similar to e-mail, text messaging monitors campaigns via an open rate. Recent campaigns and industry statistics show an open rate of 90%. The messages, or calls to action, are being seen. Mobile marketing can compliment other types of promotions and can be used effectively in conjunction with direct mail, telemarketing, e-mail or event marketing campaigns.
Who can benefit from text messaging campaigns? Retailers can use the service to increase store traffic. A text for 15% off a certain product can be displayed on the cell phone at the cash register for the savings. Restaurants can promote special offers on traditionally slow days using the text messaging service.
Sports and entertainment companies can offer savings for surplus tickets to nearby sporting events the day before show time. Auto dealers can broadcast new shipments or promotional financing to local car aficionados or advertise mini van specials to mothers with small children.
Another benefit of mobile messaging is to actively engage a customer using the call to action service. The call to action program provides a keycode and text code to incorporate into traditional advertisements. Business owners can text back using a specific code to be entered to win a gift card for office supplies. Consumers can text back to be entered into a drawing for a new iPod. Sports enthusiasts can place their vote on who will win the Super Bowl. The key word and text code can be added to printed media, billboards or television commercials. When a prospect is engaged the likelihood for conversion to a customer is increased.
Mobile marketing is obviously not an appropriate channel for every acquisition or retention campaign. However, for the right products or services, text messaging has the opportunity to breathe new life and create more depth or touch points to current marketing platforms.
TeleFly Communications
Tuesday, June 23, 2009
Wednesday, June 17, 2009
AT&T, Verizon Deny Text-Message Price Fixing
AT&T and Verizon on Tuesday denied that the two companies colluded to increase text message pricing, and insisted that text-by-text pricing plans are such a marginal part of their businesses that any attempt to do so would be totally counterproductive.
Over the last two years, the major cell phone providers have increased their per-text prices from 10 cents per message to 20 cents, a fact that caught the eye of Sen. Herb Kohl of Wisconsin, chairman of the Senate Judiciary Antitrust, Competition Policy and Consumer Rights subcommittee.
At a Tuesday hearing on the subject, Kohl acknowledged that most mobile customers pay for their text messages via packages – 200 messages a month for $5, for example – rather than on a per-text basis, but he was still concerned that rate hikes on texts might open the door to rate hikes on other mobile services.
"Will consumers continue to see similar price increases for this and many other wireless services that they have come to increasingly depend on, such as Internet connections and basic voice service?" Kohl asked. "The concentrated nature of today's cell phone market should make us wary of other challenges to competition in this industry."
Kohl first raised these issues in a 2008 letter to the major carriers – a letter that prompted several class-action suits alleging price fixing.
Randal S. Milch, executive vice president and general counsel for Verizon Communications, addressed these lawsuits and denied any wrongdoing.
"Verizon did not collude with its competitors," Milch said.
Any evidence to suggest otherwise is baseless, Milch added. "Market evidence shows fierce competition, not collusion, in text messaging and wireless generally," he said.
Carriers: Customers buying text bundles
Only one percent of text messages sent through Verizon's systems are from pay-per-use (PPU) customers, Milch said. "The other 99 percent of texts are covered by various bundles of services, where average price is less than a penny a text."
The average PPU Verizon customer sends 21 texts per month, while the average bundle customer sends almost 1,000 texts each month, Milch said.
Wayne W. Watts, senior executive vice president and general counsel for AT&T, reported similar figures. Less than 1 percent of AT&T customers use PPU, he said.
"AT&T sets the prices for all its products on a unilateral basis," Watts said. "There is no evidence that anyone at AT&T engages in anything inappropriate or illegal."
Even if there was collusion, it would be pointless, both companies said. When customers decide on AT&T or Verizon or any other provider, that providers' PPU rate is very low on the list of priorities, Milch said. They are looking at available handsets, voice plans, apps, and data plans – not single text rates.
"Focusing on this type of market – this less than 1 percent of all texts – and believing that this is going to drive the competitive needle, that was not our marketing judgment," Milch said. "So if we were to cut the price [on PPU], we don't think we'd attract anyone because if they're a heavy texter, they're on a plan. If they're a light text user, why would they change carriers on a pay-as-you-go plan?"
"We've focused our attention on the other 99 percent where we've made enormous strides to lower the prices," Watts said.
Watts claimed that it was unfair to single out the cell phone industry when many other competitors sold similar products for the same price. No one raises an eyebrow when Home Depot and Lowe's sell the same grill for $89 or when a basketball at Foot Locker and Champs Sports has the same price tag, he said.
"Does that mean they don't compete on other things?" he said. "Of course not."
Over the last two years, the major cell phone providers have increased their per-text prices from 10 cents per message to 20 cents, a fact that caught the eye of Sen. Herb Kohl of Wisconsin, chairman of the Senate Judiciary Antitrust, Competition Policy and Consumer Rights subcommittee.
At a Tuesday hearing on the subject, Kohl acknowledged that most mobile customers pay for their text messages via packages – 200 messages a month for $5, for example – rather than on a per-text basis, but he was still concerned that rate hikes on texts might open the door to rate hikes on other mobile services.
"Will consumers continue to see similar price increases for this and many other wireless services that they have come to increasingly depend on, such as Internet connections and basic voice service?" Kohl asked. "The concentrated nature of today's cell phone market should make us wary of other challenges to competition in this industry."
Kohl first raised these issues in a 2008 letter to the major carriers – a letter that prompted several class-action suits alleging price fixing.
Randal S. Milch, executive vice president and general counsel for Verizon Communications, addressed these lawsuits and denied any wrongdoing.
"Verizon did not collude with its competitors," Milch said.
Any evidence to suggest otherwise is baseless, Milch added. "Market evidence shows fierce competition, not collusion, in text messaging and wireless generally," he said.
Carriers: Customers buying text bundles
Only one percent of text messages sent through Verizon's systems are from pay-per-use (PPU) customers, Milch said. "The other 99 percent of texts are covered by various bundles of services, where average price is less than a penny a text."
The average PPU Verizon customer sends 21 texts per month, while the average bundle customer sends almost 1,000 texts each month, Milch said.
Wayne W. Watts, senior executive vice president and general counsel for AT&T, reported similar figures. Less than 1 percent of AT&T customers use PPU, he said.
"AT&T sets the prices for all its products on a unilateral basis," Watts said. "There is no evidence that anyone at AT&T engages in anything inappropriate or illegal."
Even if there was collusion, it would be pointless, both companies said. When customers decide on AT&T or Verizon or any other provider, that providers' PPU rate is very low on the list of priorities, Milch said. They are looking at available handsets, voice plans, apps, and data plans – not single text rates.
"Focusing on this type of market – this less than 1 percent of all texts – and believing that this is going to drive the competitive needle, that was not our marketing judgment," Milch said. "So if we were to cut the price [on PPU], we don't think we'd attract anyone because if they're a heavy texter, they're on a plan. If they're a light text user, why would they change carriers on a pay-as-you-go plan?"
"We've focused our attention on the other 99 percent where we've made enormous strides to lower the prices," Watts said.
Watts claimed that it was unfair to single out the cell phone industry when many other competitors sold similar products for the same price. No one raises an eyebrow when Home Depot and Lowe's sell the same grill for $89 or when a basketball at Foot Locker and Champs Sports has the same price tag, he said.
"Does that mean they don't compete on other things?" he said. "Of course not."
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