If anybody thinks that SMS is merely a person-to-person communications tool, think again. As one business in Dublin is proving, text messaging can be an excellent tool for managing relations with regular customers and has a number of advantages over other information age communications media.
As we’ve all heard by now, text messaging or SMS (short message service) has been one of the great success stories in mobile technology. Initially developed as a value-added service which allowed users to send short, 160 character messages to each other, nobody thought very much of it or marketed it much until mobile users discovered it and embraced it in their droves.
It has plenty going for it. It is short, snappy and cheap. In Europe at least, it’s also more pervasive than that other great communications tool, email. According to ComReg, there were approximately three million mobile subscribers by the end of 2002. This was up from 2.95 million at the end of 2001. The mobile penetration rate in Ireland is now 79pc, an increase of 2pc in the last year. Ireland now has the ninth highest penetration rate in the EU, one place behind the EU average. What’s more, SMS is also more immediate. While people have to sit down at a PC in most cases to access email, most are never too far from their phone.
Ster Century Cinemas in Liffey Valley in Lucan, Dublin is one Irish business which has begun to exploit the potential of SMS. The cinema complex opened in June of 1999 and is now the busiest cinema in the country in terms of admissions. Ster Century has movies showing on 14 screens which serve 3,800 seats in total. The company employs 90 people.
So what made the company turn to SMS? “We felt the need to keep in touch with our younger audience and make their visit more interactive,” said Ster Century’s Nigel Drake. “We thought that text messaging was a fun and direct way to communicate with them.”
Ster Century’s initial foray into the arena came with a competition last summer which offered 20 pairs of tickets and five VIP passes to entrants. Although the competition had no external advertising, the company received over 3,500 responses.
This formed the company’s initial database of customers with which it could begin to communicate. Through other competitions and promotions during the past year, Ster Century has managed to expand this database now to a figure of approximately 4,500 people.
Ster Century’s technology partner in this initiative is the mobile marketing specialist Pulse solutions. The company has already worked with a number of high-profile brands in customer promotions, including Pepsi, Lucozade, Heineken and Miller.
It is thanks to the advent of premium rate text messaging that such promotions can be held. In Ster Century’s case, the rates vary depending on the nature of the competition. “The kind of prizes we offer mean that we can generally afford to do this on the lower end of the premium rate spectrum,” explained Drake. “The maximum we would charge is in the region of 60 cent per message, but generally we charge around 30 cent.”
Privacy and consumer consent are important elements in strategies such as these. With so much attention being given to the problem of email spam, nobody wants the same to happen with SMS. Drake emphasises that their customer database is strictly ‘opt-in’. “We publish a full set of terms and conditions with every competition and we adhere to the Data Protection Commissioner’s regulations. A helpline in every message we send. If people want to opt out they can simply call the helpline or just send an ‘unsubscribe’ message in reply,” he said.
Of course, initiatives such as these don’t come free. According to Drake the company made an initial investment when it decided to move into SMS. While it does make money from the service, the amount isn’t terribly high, notes Drake. However, he doesn’t see the initiative as principally a revenue-generation exercise. Enhancing his customer’s experience and maintaining loyalty are the main reasons behind the venture.
It is still early days when it comes to the commercial applications of SMS. However, the Ster Century experience gives an idea of the potential the service can have. With the advent of MMS and the rich-media messaging it enables, there could be plenty of potential for further applications.
By Dick O’Brien