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Marketing to a large number of consumers via SMS is too expensive and such activity should be restricted to specific user groups, a new report has advised.
According to Dutch consultancy and research firm TheRazor, SMS is not suitable for mass communication because it is too costly when compared to other media. Its report said that an average customer contact via SMS costs around EUR0.085 per customer, but target marketing via radio or print costs just EUR0.02 and EUR0.01 respectively.
"Marketing professionals should carefully consider the quality of customer contact via SMS campaigns when planning the spending of marketing budgets," said the report. "Targeted campaigns are much more effective for marketing and advertising purposes."
In addition, Paul Settels, managing partner at TheRazor, warned that SMS marketing may damage brands if not handled correctly. "People receiving unsolicited messages could become angry at the senders of these messages, which includes the operators, as well as the companies engaging in SMS marketing," commented Settels, who advised marketers to ensure that SMS users can opt-in of campaigns and thus avoid hurting their image and reputation.
However, he told ElectricNews.Net that SMS marketing does present companies with a number of advantages. The first of which is that marketing messages are delivered to a personal device and, therefore, have a high response rate.
"Our study of over 60 cases of SMS marketing in Western Europe found that most people responded to a SMS marketing message within two minutes as long as they were offered the chance to win something, a gift voucher or an interesting message," remarked Settels. "For example, Amnesty International can get 20,000 SMS messages of support within one hour of sending out an SMS appeal."
Other advantages cited by TheRazor's report include the ability to increase the brand experience. "Organisations that sell products aimed at youngsters and the entertainment industry have already benefited from this phenomenon," said the report. "The ability of SMS to turn static products into an interactive experience means, for example, that customers can influence the content of products based on mobile voting."
The report also said that SMS direct marketing is beneficial to businesses as it allows them to establish an interactive relationship with customers. It also means they can build a profiled database. However, the report noted that direct marketing opportunities via SMS have yet to be fully explored.
Overall, the report concluded that there is a growing acceptance of SMS marketing among marketers and that its further use will be driven by its personal nature, the high penetration rate of mobile phones and its generally low cost. "Once marketers understand SMS and what can be done with it, then they will be more willing to use it," commented Settles.
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