Text is cheap – and Irish businesses are using it to reap tangible rewards and boost their bottom line
For less than the price of a vacuum cleaner, John Donohoe’s text messaging campaign paid for itself.
Last year his store, Donohoe Expert Electrical on Navan’s Kennedy Street, ran a sales promotion with a difference. Customers who received a text from him could present the message on their mobiles in store to receive a €50 discount on a Dyson vacuum cleaner.
The result was a doubling in sales of the cleaners, which retail for €300. “In two weeks we sold 80 units. Normally you wouldn’t do half that,” Donahoe (pictured) says.
Donohoe gathers mobile numbers from customers when they register electrical goods for warranty. He has amassed a database of 4,000 numbers and always asks for permission to use customers’ details for promotions.
However, he uses the service sparingly. “I don’t spam. I only sent out two offers last year and I make it a value proposition for the customer. There has to be something in it for them,” he says.
For Donohoe, there are sound business reasons to use text messages beyond mere novelty value. “This is probably one of the most competitive sectors in retail,” he says. “This targets repeat customers for business and keeps my shop in their minds.”
Donohoe is one of a growing number of Irish businesspeople who see the potential of text messages as a sales tool.
It’s arguably overdue. Most adults now own a mobile — the latest statistics from ComReg show there are more phones than people in the State. Even allowing for people having multiple handsets, ownership rates are still high.
Of the 1.79 billion texts sent between Irish mobiles from April to June this year, it’s fair to say business-to-business or business-to-consumer communication probably accounted for a small portion. That figure looks likely to grow, as technology providers report increased interest from businesses.
“Over the past year we have noticed a marked increase in the number of enquiries,” says Mark Flanagan, managing director of iWord, a developer of business text messaging technology.
“As a communication tool, text is hard to beat. It’s like a really urgent email that must be opened,” he says. “Texting gets a higher response, we find. People will open a text message quicker than they’ll open an email.”
Unlike premium-rate competition services, using text messages to communicate with customers doesn’t generate revenue for the business.
Instead the benefits include better customer service.
Sending SMS is cheap — business rates vary between 5c and 12c depending on monthly volumes — so it is much less expensive than a direct mail shot, for example.
“The cost of a letter could be €1 between the cost of printing and the postage stamp,” says John Ahern, managing director of Go2Mobile, a provider of business text messaging services.
“With a text message it could be 8c so you’re talking about a fraction of the cost — one tenth if not lower.”
As well as cost, the results are more quantifiable than with traditional advertising, says Donohoe.
“What I loved about texting is, we could measure the success exactly, as opposed to throwing an ad out there on radio or in print where you don’t know whether people are responding to the ad or were coming in to the shop anyway,” he says.
It’s also an indirect customer service tool. NTL uses text messages to remind customers when maintenance operators will call out for repairs. The company claimed this reduces no-shows by 40pc.
Similarly, the Galway-based refuse collection firm Citybin texts customers to remind them which bin they should leave outside their house each night.
According to Ahern, using texts rather than phone calls ensures that a customer received the correct message. “It’s great for delivery notifications, because you have a record of it. You can’t have a record of a spoken conversation on the phone,” he says.
“A text message has a fixed cost, whereas a phone call has a variable cost, depending on the length of the conversation. From an efficiency viewpoint, getting a text message out there is going to be a lot faster,” says Ahern.
He cites the example of MRS, a specialist recruitment consultancy for the medical sector. It notifies contract nurses on its books via text message, letting them know of immediate positions that needed to be filled.
By using database technology in tandem with text message services, it’s possible to categorise customers according to a particular profile. In the case of MRS, it was able to target specific positions only to certain nurses who fit the required criteria.
Businesses that may be wary of using technology don’t need to worry about having the necessary expertise. According to Ahern, services like Go2Mobile require no hardware or software to be installed.
Depending on the product, the text system can be managed via email software or through a web browser. “Typically a client is up and running within 24 hours,” he says.
Although these kinds of text services are far-removed from the €2-per-message ringtone and competition market, they still come into the category of premium rate services. As such, they are regulated by Regtel, which operates a strict code of practice which must be observed by all companies or individuals offering premium rate services in Ireland.
Businesses must abide by the requirements of the code, says the regulator Pat Breen. “If estate agents or whoever want to advertise services by text message they must comply with our code and the information they give must not be misleading,” he says.
As mobile phones become more sophisticated, businesses can make their texts more elaborate and could include a link to a website. “You could have a mobile brochure,” says Flanagan. “The content would be specifically adapted to the device.”
Though his own campaign was successful, Donohoe is cautious about sending out too many messages and suggests fewer communications are more effective than bombarding customers. “If it’s done well, it’s a good marketing tool, but if everyone starts doing it, it will become a nuisance,” he warns.
Estate agent not lost for words on benefits of text
Estate agent Colman Doyle used to think a prominent office on the main street in Gorey and listings on the web were more than enough.
He is happy with his listings on various property web sites, achieving impressive page hits and brochure downloads.
When a colleague persuaded him to try iWord’s PropertyText service for a month, he saw something he didn’t realise he had been missing.
Now, any houses Doyle sells have an assigned code and short text number on the ‘for sale’ sign outside. Prospective buyers can send the code to that number and instantly receive a text with the price of the house, a brief description and contact information.
In a matter of months the text service has become a vital customer service tool for Doyle. “If someone is standing outside a house and texts the code, I know immediately what property that is and I can say: ‘I happen to be in the area if you want to set up a viewing’,” he says.
“Within 15 seconds of them sending a text, that bounces back to your phone. If you go and look at the website, you see a photo of the house but I don’t know who you are. If they text me and then call, I can recommend somewhere else if the property they’re looking for isn’t in their price range. A whole conversation can evolve.”
For him, it’s a competitive differentiator. “There are 14 or 15 estate agents in Gorey and the fact of having a sales tool the others don’t is a benefit,” he says.
By Gordon Smith