- Posted April 4, 2014 by
This iReport is part of an assignment:
Direct Response Marketing in the Age of Cellphones
"It's a natural evolution," says Bell. "When early direct mail letters and catalogs proved effective, early marketers discovered that measuring customer response also permitted experiments to discover which advertisements brought the most orders."
As media evolved -- magazines, radio, television infomercials, internet website offers, and now short offers sent as text messages -- the look and feel of advertising changed, but not the essential order-pulling nature of direct response marketing.
"Image advertising to keep a company's name out there may be OK for huge corporations with deep pockets," says Bell, "but for small businessmen in this economy, sending offers to stay in touch with customers and generate immediate sales is more economical and more profitable."
Fast results and ease of testing, along with low operational cost and the ease of enlisting customers into a customer rewards program are turning many businesses to try text-marketing.
"Restaurants have done well," says Bell, "and also salons, computer game stores, bars, and other personal-service, personal-entertainment, or food and beverage businesses."
Research studies agree. According to Lee Resources, it costs only 20% as much to keep an existing customer as advertising to find a new one. A study from Juniper expects text messaging to increase through 2016, with total coupon redemption exceeding $43 billion dollars. According to Borrel Associates, mobile coupons are ten times more likely to be redeemed than printed coupons.
"It's no wonder," adds Bell, "because 87% of all americans carry cellphones, and when a text comes in, you look at it immediately. The targeted message is read in a glance. The message is immediately comprehended. No other form of advertising has this immediacy, these open rates, or these read rates. It's not surprising that customer response to sms advertising goes beyond earlier forms of direct response ads.”
Direct response marketing is not new. In 1872 businessman Aaron Montgomery Ward created his mail-order catalogue. Henry Sears and others followed, and in following times advertising by mail, by catalogs, and by direct-response ads in newspapers and magazines was the only way to reach distant and isolated customers.
Direct marketing remains attractive to marketers because its positive results can be measured directly. An advertisement which pulls marginally can be tested against a variant, and then the winner is kept and tested against yet another variation. In this way, even losing advertisements can be turned into winners in a measurable and systematic way.
"A huge benefit of sms text marketing is fast customer response," says Bell, “and that means that the marketer can quickly refine offers to discover which pull best. In practical terms, Giovanni's Pizza can quickly experiment to learn how to fill up slow thursday nights with a crowd, every single Thursday."
Tiny and mighty. It looks like text-messaging is here to stay.