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Inside Retail & Esendex

SMS campaigns yield highest customer response rates with maximum ROI

Australian e-commerce is booming in the wake of the pandemic, with vast new groups of consumers coming into the market who have only recently latched onto the benefits of digital shopping, and businesses that have adopted strong customer service strategies delivered via mobile channels are being rewarded.

Marketing messages that might otherwise get lost in a sea of emails and spam are being welcomed for their air of personalised support when targeting the palms of customers’ hands – and consumers are proving more responsive to SMS campaigns than almost any other channel, with text messages returning a 209 per cent higher response rate than phone, email, or Facebook.

“I think the first thing that’s important for businesses to recognise is that customers actually want it,” says Jonathan Walsh, GM APAC for business SMS provider Esendex. “The latest numbers from the Australian Communications and Media Authority are showing that less than 30 per cent of Australians aged between 18 and 44 have a home telephone now, so we’re relying on our mobile phones to do a lot more things than we ever have before.”

This saturation and reliance on mobile phone technologies has made a huge impact on the demand for business communications via SMS, with mobile-led messaging now proven to increase customer engagement. Esendex’s research suggests that more than half of consumers feel frustrated if SMS is not an option for customer service and support, with mobile engagement and mobile messaging getting right to the heart of where people are spending most of their day.

SMS enjoys upwards of a 95-per-cent open rate, with 90 per cent of these being read within three minutes, making it difficult to see why businesses are often hesitant to adopt the channel. There are typically two main concerns – a perceived cost barrier to sending messages by SMS as opposed to email, which is considered effectively free; and the worry that consumers might find SMS messages more intrusive than other forms of communication. 

“I think the cost becomes almost irrelevant if it gives you a good return on investment,” explains Walsh on the first issue. “But the truth is that with email there are different levels of effort and costs that businesses may not tend to measure – the platforms themselves don’t tend to be free, and there are costs for the time and effort it takes to produce the artwork and the HTML. Not to take away from the brilliant copywriters who make SMS campaigns so effective, but SMS by nature is a plain-text service, so you don’t have that same level of effort required to produce them.”

Ensuring that SMS campaigns are accepted by consumers essentially falls under the same considerations as email, with both channels covered by the Spam Act 2003. The general principle is simple – an SMS is not spam if you’re communicating about a purchase that someone has made, or if the customer has commenced the interaction themselves. On the other hand, if you’re sending promotional texts, then you do need to have received an opt-in and provide an opt-out.

“The first thing I would do is to familiarise yourself with the Spam Act, there’s a lot of great resources on the ACMA website,” says Walsh. “Then update the relevant terms and forms on your website to seek permission from customers on how they wish to be communicated to. Then it’s about identifying the types of customers who you think messaging will work for. An example target group is VIPs – you can connect initially via email and seek their permission to shift to SMS as a way to get communications to them faster. You can think about your sign up form, adding a mobile phone field as well as email to capture more mobile numbers, and then see what your customers have a preference for.”

“It’s not an either/or approach,” he adds. “We have customers who’ll run an email campaign to their database, and then they’ll send an SMS to those who haven’t opened the email – so they’re reducing the SMS volume that they need to send by getting it to only those people who haven’t engaged with their first communication.”

With 75 per cent of surveyed consumers indicating they’d be happy to receive offers via SMS and the plain fact that Australians check their smartphones about 85 times per day, SMS presents a high-potential marketing channel to retailers with multiple use cases – from pre-launch sales, product launch pre-registration, discount codes, click-and-collect notifications, customer service, order updates and tracking information. While all those approaches might seem an overwhelming prospect at first, it’s often best for retailers to start small and see how it works for their customers, refining and improving strategies as they go.

“I think the number one rule in SMS marketing is simply to mirror your brand voice and get straight to the point,” says Walsh. “SMS is a channel that people use for short, sharp and fast communication. So don’t try to send War and Peace, don’t try to paint a big picture, just get straight to the point, straight to the offer and go.”

The Esendex OMNI channel solution for retail integrates SMS, WhatsApp and email. For more information, visit https://www.esendex.com.au/products/rich-messaging/omnichannel-chat/.