By the end of 2008, the U.S. had a wireless subscriber base of nearly 270 million users, according to CTIA. That equates to a penetration of 88 percent. Only 11 percent of wireless subscribers used mobile Internet services, CTIA reported in 2007. By the end of 2008, that category grew to an estimated 12.5 percent.
At the other end of the wireless technology spectrum, 98 percent of all cellphones in the U.S. are now text-enabled, according to Nielsen, which placed the median age of a text message user at 38 years old. In the past two years, the growth rate of texting increased more than 450 percent. Today’s average mobile user places 204 voice calls and sends 357 text messages per month.
These statistics prompt the question: What is the right technology to choose for your mobile customer retention strategy — mobile Internet or mobile texting?
A Solid Foundation
There are three areas fundamental to customer retention in our mobile world:
With respect to Reach, 98 percent of all mobile phones — regardless of carrier, technology, form or factor — perform two very basic and fundamental functions: voice calls and text. If your mobile customer retention strategy is based on mobile Internet and not on either or both of those two simple features, you are addressing only 12.5 percent of mobile users in the U.S.
Customer retention demands marketing to customer needs — and on their terms, not driven by the hype or promise of the market. If your favorite restaurant ran aBOGO promotion, but you had to have a blue phone to quality, would you run out and change your service and device? Not likely.
Regarding Respect, today’s cellular phone is a person’s private lifeline. Abusing that privacy means certain death for any solicitor, whether through voice or data. Respect means asking permission first — not after the fact. Respect also means not being abusive by taking advantage of a customer’s permission. Just because a person has an unlimited plan doesn’t warrant sending them countless text messages.
Finally, Pertinence. In our busy mobile world, we want to receive information that is pertinent to us as individuals, not as a group of people or a demographic. Our phones are personal, so it is important to make sure that any contact is personal and pertinent. For example, although my last name has Spanish roots, I don’t speak Spanish. Listen and learn. Document and update. Determine the personality, desires and wishes of your customer and be pertinent and timely with information sent to them.
SMS and Customer Retention
Nowadays, a return rate of less than 1 percent for bulk advertising is the norm in the print world. That represents the old shotgun approach to attracting and keeping customers. One percent is not only an embarrassing response, but also a very expensive and non-green way of reaching clients. It’s also no way to correlate marketing spend to revenue lift.
Requiring your customer to have a specific device or a specific service is far from optimal. Imagine telling clients they have to buy an iPhone and subscribe to AT&T Wireless with a broadband data plan in order to use your service.
In the wireless industry, 62 percent of customer churn (moving from one provider to another) is due to poor customer service — specifically the wait time to resolve billing issues. Second to poor customer service is poor network quality, and third is personal economics. So, respecting a customer’s choice of service provider, device and phone plan is critical to keeping customers happy.
So, what kind of mobile service is critical to customer retention and also can correlate marketing spend to revenue lift? Simple: two-way, permission-based, targeted text messages. Unlike any other technology, it can reach nearly 100 percent of all mobile wireless users in the U.S, if properly used.
Certainly, there is a cost associated with SMS. However, more than 90 percent of people 30 years old and under have unlimited text-messaging plans. On the other end of the age spectrum are those 45 years and older who happen to have teenagers or grandchildren who only text, so this older generation is also moving to unlimited text plans in order to communicate economically.
Whether communications to customers are for mobile couponing, warranty announcements, special discounts or general information, all customers want the same thing: meaningful and timely information.
Keep It Personal
It is critical that any retention strategy focus on the desires and likes of each and every customer as an individual — not as part of a group or segment. Those likes and dislikes must be reflected in how, why and when you communicate to them.
For example, mobile couponing to high school students can be very lucrative, but not all high school students like the same foods. In reaching this segment, determine customers’ desires simply by asking them what kind of food they like. If, for example, a customer’s response is Mexican food, then mobile couponing with Taco Bell or Del Taco makes sense. A keen marketer will create a marketing plan of say “Taco Tuesdays” and send a mobile coupon out at 11 a.m. on Tuesdays. A successful mobile retention strategy must continue to ask those same people what their interests are in future messages. Customer retention means Pertinence as a function of meaning and timing.
Until broadband wireless becomes more affordable, coverage significantly improves, and Internet devices become free, two-way SMS text messaging that is permission-based and pertinent should be the primary technology used for all mobile customer retention strategies — not only in the U.S., but also abroad.
Remember, mobile customers demand Reach, Respect and Pertinence. Don’t you?
Robert Sanchez is president and CEO of Globaltel Media, a provider of chat and messaging solutions that connect phones and PCs.
Robert – good information. Marketers should understand this topic clearly. But why choose between SMS and mobile web? Enhance your SMS campaign flow with mobile web design. The mobile landing page can acquire a lead, spur actions like click to call or email, even go directly to a point of sale.
Clearly, SMS is the lowest common denominator, so if you are going to avoid alienating potentially 87 percent of your target, you should be building campaigns that stand on their own strictly using SMS. I agree that campaigns can only be stronger if they also include a mobile Web component *for those who can use it*, but they need to be independent of the mobile Web in order to realize the much bigger potential of SMS to level the playing field. Mobile Web? Absolutely, but don’t depend on it for a successful campaign.