SMS Marketing May Be the Breakthrough Loyalty Tool of 2020

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By: Wise Marketer Staff |

Posted on December 4, 2020

Speaking with Dennis Becker, Founder and CEO Mobivity, is an opportunity that we don’t like to miss. Recently, Wise Marketer's Managing Editor Bill Hanifin took advantage of a few minutes with Dennis Becker to cover a range of topics relating to SMS marketing. There are some valuable insights here from Dennis that will help you employ SMS marketing tools into your mix more effectively as well as some statistics that will surprise you regarding communicating with loyalty program members.

Wise Marketer (WM): I understand that Mobivity just received an award as “Best Mobile Messaging Based Marketing Solution” from the 2020 Martech Breakthrough Awards. What does the award represent for you?

Note: A full press release covering the award can be found here

Dennis Becker (DB): We were really pleased that Mobivity was nominated for the award based on some work we did with Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches (PGDA). It all started out with Mobivity seeking to help them curb the impact of COVID to their business.

Papa Gino's had noticed they were getting 2x as many return visits from SMS subscribers and that these same customers showed a 17% higher return visit rate than even members of their loyalty program. This gave them the confidence to essentially “double down” their investment in the SMS marketing channel.

Using Mobivity’s Recurrency platform, Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches (PGDA) created a mobile messaging campaign that targeted customers who had not visited a PGDA 90-days prior to COVID restrictions.

WM: What kind of results did you get with the campaign?

DB: With highly targeted offers encouraging a return visit, this SMS marketing campaign drove an average return on marketing spend of 440%, compared to traditional marketing channels.

WM: Congratulations! Are these results representative of what other brands using SMS marketing tools are seeing?

DB: Well, I don’t know if you have seen these numbers, but we consistently see a 14x higher response to SMS offers compared to using email. Consumers are looking at their SMS inbox an average of 47X per day, so it makes sense that response rates are higher in this channel.

WM: Expand on that stat. What is driving the effectiveness of SMS marketing today?

DB: Think about it. If consumers are looking at their SMS inbox 47X per day, it’s safe to say other communications channels are lagging behind. Immediacy is the key to engagement here.

Related Video: Kendra Scott: Unwrapping 164x Holiday ROI with Personalized Text Messaging/SMS

WM: Do you think there’s a clear advantage communicating with the SMS channel over, for example, using a branded mobile app?

DB: I’ve seen recent stats that about 50% of all iPhone users have their push notifications turned off. This means that just because a customer downloaded your app, only half might be reached via notifications. This reduces the effectiveness of mobile apps as a communications tool.

WM: Tell me some more about the impact of “immediacy”.

DB: Sure. Email has a 20% read rate, with most messages being read within 24 – 48 hours of delivery. Compare that to the many studies that show that 97% of all text messages are read within 15 minutes of being received.

SMS is truly a two-way channel for communications that can support development of efficient, low contact environments. SMS has progressed from being a great marketing channel to serving as a powerful consumer marketing experience utility for low contact applications

WM: What do you mean by a “consumer marketing experience utility”?

DB: Beyond delivering promotions and offers, SMS marketing tools can be used to enhance curbside pickup and delivery, improving the experience in the process. When ordering online, most customers today receive a generic message as to when food will be ready for pickup. Being able to get a more exact time when food is prepared promotes a better quality food experience and generates higher customer satisfaction ratings for orders.

Alerts to the restaurant can trigger messages to staff mobile phones, speeding up delivery times. Using our system, servers can subscribe to receive specific types of alerts while they are on their shift, enabling a low-friction and efficient way to connect with customers.

WM: Is everything you do accomplished through SMS marketing tools?

DB: We work through all channels, including email, SMS, and paper receipts. You might be surprised the power of messaging that can be achieved through a store receipt. We are seeing minimum click through rates on receipt driven offers of 15% and when the offer is strong, click through rises to as much as 70%.

The messaging on a paper receipt can be manipulated. You can communicate something of value, deliver a message, or inform customers about stores hours or menu changes. There’s a lot of flexibility how the receipts can be used. The good news is that response rates on ads delivered via printed receipt rival text messages.

Receipts can be powerful even when no offer is included. We ran one campaign for Sonic last year where we invited customers to download the mobile app. The campaign drove 5x as many app downloads as previous campaigns. Better yet, 50% of those customers downloading the app made a purchase right away. It was encouraging to see that a paper receipt could be used to drive adoption of the mobile app.

WM: How many people actually take receipts?

DB: That answer depends a lot on the restaurant concept. While some customers don’t want to accept a receipt based on health concerns, when the receipt is critical to getting your order or when you need it as proof of purchase, it becomes more important. For example, receipts may not mean as much for concepts like Chipotle, while drive through QSR gives customers more reason to retain a receipt

WM: What is the main “problem” that your clients are trying to solve?

DB: Most are trying to solve a traffic problem. The trend we are seeing is that engagement traffic and the actual transaction are closer than ever before. That puts more importance on generating as much traffic as possible.

WM: I’ve heard it said that now is the moment is “ride or die” with digital transformation. Are we at inflection point and how dramatic can we make this case?

DB: I’d rather say that we’ve been living through a digital evolution which is now leading to a potential extinction event.

WM: Extinction event? That is dramatic.

DB: Marketing is getting flipped on its head. Many business people are hanging on to traditional media channels, even when these channels are proving less effective by the day, for example, compared to SMS. As an example, the impact of COVID on sports meant less people are watching television. We are driving our cars less, so outdoor advertising and to some extent radio are less effective. But there is massive inertia to change.

The historical spend on marketing represents 5-7% of budget. The number has not changed, but if you are spending that money in traditional channels, you’re not getting the highest impact. Think about the ad views you could get on digital that, if you did the same in traditional channels, would cost you a fortune.

WM: Who’s winning in this game?

DB: The brands that have already been participating in digital are doing very well right now compared to those that are just getting into the game. Remember too that our definition of digital can mean “Direct Digital Engagement”, or SMS.

I was recently talking with the Vice President Digital Marketing of a national QSR chain and asked her how she would compare SMS with other forms of digital marketing advertising. One example she shared was that ads in social feeds represent an interruption to what people are already doing. They are watching a feed or a video, listening to a podcast. On the other hand, SMS marketing might technically be an interruption, but it’s a communication that is more expected and permission has been given. It is brief and much less intrusive.

WM: One clarification. You mentioned that Papa Gino's got a higher return visit frequency from SMS customers than loyalty program members. What are we supposed to take-away from that finding?

DB: You must tip your hat to the power of SMS marketing. The numbers tell the story. At the same time, there is clear opportunity to merge the conversational relationship of SMS marketing tools into loyalty program communications. SMS is not necessarily “better than” loyalty programs, but loyalty programs are certainly “better with” SMS marketing.