Wednesday, April 21, 2010

Moving Ahead with Mobile Marketing

More and more companies today are using messages sent to consumer cell phones as a marketing tool.  This is known as Mobile Marketing.  The two most common methods are:

  • Sending a promotional text message to the consumer where the phone number is known and
  • Asking the consumer (whose number is unknown) to send a text message to the marketer by entering a specified keyword to the provided short code.

For example, text ‘Perks” to Dunkin (386546) to receive a coupon or text ‘Phillies’ to Google (466453) to receive the most recent score or next scheduled game. The possibilities are endless.

In the U.S. alone, more than 270 million people own cell phones, representing 87% of the population. With the growing popularity of smartphones such as the iPhone and BlackBerry, marketers have increasing opportunities to reach their target audiences. Given the growth and usage of cell phones globally, it is not surprising that marketers are shifting resources to advertise using mobile channels. From the Direct Marketing Association’s 2009 Response Rate Report, respondents indicated that from 2008 to 2009, they increased their budget for mobile marketing by 38.8%. Marketers are obviously constructing mobile marketing campaigns but what situations do they work best in?

For existing customers, mobile marketing campaigns can be used as an additional point of contact, helping to reinforce CRM.  It can add value by making the process of communicating more immediate and easier (i.e. texting a payment reminder, inviting customers to special events, sending coupons, etc.). Cell phone users literally will have access to information at the touch of a button wherever they are. But for prospects to initiate the communication, incentives such as coupons, sweepstakes, and contests can be offered. These offers can increase brand and product awareness as well as encourage trial usage and ultimately, repeat sales.If you are a retailer, could you send text messages to your customer list inviting them to an exclusive sales event at their nearest location?

Unlike other forms of direct marketing, lists cannot be purchased for mobile marketing. Because of this limitation, businesses have to either rely on their house lists or have to integrate the text-in call to action to obtain the necessary opt-in. Once a user has opted-in, their phone number can be stored in the database for future marketing opportunities. The call to action can be incorporated into television and print advertisements as well as point-of-sale and end-cap displays. For customers, it can be through an existing email database or it can be displayed on the company’s website. Many major companies have already successfully implemented mobile marketing into their marketing strategies. The following is an example of such a company.

After recently launching a new line of instant coffee, Kraft Foods wanted to create awareness of their new product by having customers sample it. They also wanted to develop a customer database. In order to reduce waste and minimize costs, Kraft decided to have customers request samples via text message. The short code and an explanation of the sample was included on Kraft’s print and televisions advertisements and customers were invited to text in to receive samples. A request form was sent back to their cell phones along with an option to opt-in to future messages. At the end of the campaign, 500,000 people sent requests for samples and more than 80,000 users opted in to receive future messages.

How else can this form of marketing be successful? What types of businesses could most benefit from this interactive communication?

If you are launching a new product, would you consider a mobile marketing campaign to offer samples, coupons, a video demonstration, etc?

Do you offer educational workshops or financial seminars that require reservations? Could this be used to make the process easier? Can you see how this application could benefit a company like yours?

The next blog post will discuss the use of PURLs (Personalized URLs) and their integration in a multi-channel marketing mix.
