In an interesting turn of events, with social media and email losing their previous success, retailers are increasingly using SMS messages. It was by now mostly used for private conversations.
First, we're going to present you with a real life example. Dr. Squatch, a US natural soap brand began offering their customers a discount if they signed up for SMS messages to send them promotions and new products on a weekly basis in late 2020. It turned out to be a very successful move. Money spent on SMS promotions performs seven times better than Instagram ads. And SMS messages are now making up to 15% of the $200 million company revenue.
Brands are coming to the realization that a lot of thair audience prefer to be contacted by SMS. Emails are easy to ignore, either by accident or on purpose, and social media marketing has become more expensive and at times unnoticed. This is why many of the retailers have turned to SMS messages. Their open rate is almost 100% since people check their phones very frequently.
One of the biggest companies in the field, Attentive, exchanged almost 20 billion SMS messages between retailers and customers in 2020. This in turn drove over $10 billion in sales, which is more than double than 2019. Their customers also more than doubled, from 2000 to 5000 by the end of 2020. The company boasts that their customers, the retailers, make an average of $55 for every $1 they spend.
The most common form of message is weekly promotion. It is just a „compressed“ version of email, accentuating only the most important parts, using capitalized letters to put an emphasis on the most important parts. So they are short, to the point, and easy to understand.
It is also easy to unsubscribe. The customer can always unsubscribe in one simple step and they won't be getting annoyed anymore. The companies have to obey strict marketing laws if they don't want to end up on court. That is why they have to be very careful with their messaging.
It is important to track and update the unsubscribe rates very thoroughly. The example of Dr. Squatch tells us that they send 3 SMS per week to their most loyal customers, but if they see someone is losing interest, they will scale back. They don't want to bother people which can negatively affect the whole company.
It is also important to personalize texts based on shopper's interests and purchase history. Retailers might message someone who has been browsing some of their items recently, or has purchased some items in the past. But it is not advised to message someone who bought that same item last week because it's not likely they will need it soon.
One more idea is to tease customers with early access to new products so they would stick around longer. That way, the customers can already set aside money for desired products, or even make preorders if it's a limited edition.
It is expected that, as more brands start adopting the SMS, the bar will just get higher. Companies will have to get imaginative with their messages. Industry executives say that the next step is to turn SMS marketing into a more conversational channel. There customers can directly buy products, contact customer service, or ask questions about them. Also, if customers leave bad reviews, they may recieve a message asking them what they disliked about their customer experience.
It is estimated that SMS messages are going to become a standard in the retail field. But the retailers have to be imaginative and careful not to overdo it with messages because it might upset the customers. And upsetting the customers will drive their sales down.