John McGowan, the general manager of two pubs in Dublin, has started to offer customers free drinks using SMS-based vouchers.
Using a system developed by Irish company Saadian Technologies, McGowan, who runs two family owned pubs in Phibsboro and Churchtown, has started to use text messages to complement direct mail campaigns which have been used in the past.
Overall, the company has increased its direct mail hit rate by 25 percent while reducing costs by 90 percent, McGowan claimed. "We typically send out birthday cards to all our regulars offering them a free drink to celebrate," explained McGowan. But he went to say that each letter cost around EUR3.20 and around 25 percent of all post was returned, undelivered. "Many of our customers are young and they change their addresses frequently...but they never change their mobile numbers."
After giving pub-goers the chance to provide their mobile numbers, McGowan collected 5,000 numbers over a six-month period and he now sends regular SMS messages to customers, including holiday greetings and free drinks vouchers for punters' birthdays.
"This is spot-on, sniper scope, direct marketing, not to mention the fact that it's cheaper," McGowan told ElectricNews.Net. "I am building customer loyalty using this, not just doing general advertising."
These two Dublin pubs, like many other companies of all types, are jumping in on a trend that has proven to be extremely popular, particularly among young people, and is relatively cheap.
In fact SMS marketing response rates are up to five times higher than those of direct mail marketing, according to Forrester Research. The average response rate is 11 percent and the average campaign cost is low at EUR24,000, the research company said in a January report.
Of the direct marketers polled by Forrester and the Federation of European Direct Marketing (FEDMA), 21 percent use SMS marketing at least occasionally. A further 12 percent have tried SMS marketing on a trial basis, but 56 percent plan to regular SMS campaigns by next year. Marketers will devote an average of seven percent of their budgets to SMS marketing by then.
Dublin-based Saadian Technologies is providing the platform for McGowan's system using its product Business2Mobile. In fact according to Herbie Ellis, a director with Saadian, a number of large companies in Ireland are using the firm's technology including Fitzgerald Pubs, Bewley's Hotels, Choice Hotels and Jury's Hotels. "We know who the competition is out there but we have faith enough in our product and we're ready to roll with it," Ellis told ElectricNews.Net.
Saadian built Business2Mobile in-house and the company has agreements with both Vodafone and O2 allowing it to deploy services that have access to around 97 percent of Ireland's mobile equipped population. The company employs 13 in Dublin and was established in June 2000.