SMS and Coupons, a Powerful Combination for Retail, CPG & QSR

SMS and Coupons, a Powerful Combination for Retail, CPG & QSR

By 2020, 70% of the world population will possess a smartphone, making mobile a necessity for marketers to reach and engage people on the people’s terms.  Now and into the discernable future, direct communication media, such as SMS/MMS messaging, along with push notifications, beacon alerts, and the all-too-familiar email will continue to be popular tools used by marketers to deliver content, offers, and support services to the people they serve.

Marketers, however, are faced with the difficult decision of choosing which of these communication media to use within their marketing mix, as well as which types of content, offers and services to promote through them in order to achieve their business objectives. These objectives include, but are not limited to, creating awareness, driving foot traffic into a retail store or stimulating loyalty in advocacy in some way.  

Out of all the messaging media listed above, we recommend that marketers not ignore SMS.  SMS can be used to not only deliver promotional offers, it can also be used to grow one’s database, capture additional information like age, zip and email address through direct engagement and indirect data appending services, and more.  SMS also has the highest engagement rates of all channels.  Studies show that roughly 20% of emails are read, 29% of Tweets are read, and only 12% of Facebook posts are read, whereas 98% of SMS text messages are read. 

Why might this be the case? It’s simple, really, SMS messages must be read before they can be deleted.  Furthermore, SMS messages have a much higher average response time, 90 seconds, compared with email which has an average response time of 2 days.  Views and response rates are not the only value of SMS, what really matters is engagement, and with engagement, SMS wins too. Marketers who use SMS messaging have seen a much higher average click-through rate, 19%, compared to email which has an average click-through rate of 4.2% and social media, like Facebook which has an engagement rate of less that 1%.  Given the success that many marketers have already seen with SMS, it should come to no surprise that many brands are starting to invest or are increasing their investment in SMS as a viable communication media for future marketing promotions.

As noted above, the SMS medium is suitable for a variety of different forms of communication to drive engagement, including but not limited to, the delivery of offers, contests, promotions and notices of timely special sales and events.  It is also an incredibly effective customer support tool.   

When it comes to offers like coupons, according to a Q3 2014 industry study, roughly 50% of Internet users are open to registering for commercial text services and of these, the majority, 29%, would do so to receive coupons.  Considering this insight, in conjunction with a 2015 Inmar study which reported that only 11% of consumers discover coupons through text, we can conclude that there is a gap in marketers’ use of text messaging. This is a gap that marketers should focus on closing.

Incentives, like coupons, motivate people and their shopping behavior.  The Nov. 2015 Marketing Sherpa report reinforces that the primary reason people engaging with brands through social media is for incentives and offers.   

If you want to see a brand that is getting the text messaging experience right, check out The Men’s Warehouse. They are offering content-rich messaging and do a great job of integrating it within the majority of their owned media channels, including web, email and in-store point of sale. The Men’s Wearhouse chain K&G Fashion Superstore saw a 93% open rate from an SMS couponing program, resulting in an opt-in database of over 80,000 mobile customers. Another great example of text messaging in action is how McDonald’s, in the Philippines, last year used text messaging.  People who participated in the McDonald’s program could receive free minutes on their mobile phone plan and other offers.  These examples show how SMS, along with similar programs, are perfect models for a wide range of industries, including retail, CPG and QSR/Fast Casual restaurants, looking to engage and service people

We encourage marketers to look at the evidence and embrace SMS in their marketing mix, starting now.  A year from now, when we look back on 2016, marketers that have adopted and mastered text messaging within their owned communications efforts will increase customer satisfaction and the company’s bottom line. 

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