BrainTrust Query: In-Store Text Messaging – A Real Life Story
By Mark Price,
Managing Partner, M Squared Group
“Text the
word ‘tent’ to 55657,” the PA system said, “and you will receive 20 percent
off one item, on your shopping trip right now.” Now, I didn’t hear the
message at all. I have learned to tune those things out over time;
just background noise. But “the brains of the outfit,” my wife, heard
the announcement and called it to my attention.
At that time,
we were agonizing over a pair of skis for my wife at a tent sale at Hoigaard’s,
a local ski specialty store that has earned our loyalty through great
customer service over the years. The skis were a bit too expensive, and
we were trying to figure out whether or not to splurge. Guess what happened
when we heard that announcement? We had those skis to the checkout register
in less than three minutes. The 20 percent off on the spot did the trick.
Many marketers
might question the incrementality of the on-site 20 percent offer. But
let me point out two factors that make such a strategy successful: (1)
the sale was in its final day, in the final two hours, and (2) our purchase
was basically incremental – the discount pushed us over the edge in
the decision process. Timing was everything.
I think that
this example shows the ability of mobile marketing to capitalize on opportunities
that are highly time-based. If this offer had come out several days prior,
the incrementality could be more in question, since consumers could have
taken it on previously planned purchases. But last-minute shoppers
(like us) are less likely to be making planned purchases and the timing
was also clearly directed at reducing excess sale inventory at the end
of a three-day event.
The one piece
that was missing from this mobile effort is any effort to capture my
name and customer identification. After all, we have been shopping at
Hoigaard’s for the past five years or more. Our purchase information
from today could have proven valuable for future offers and benefits.
Mobile messaging is challenged this way, but there are ways around this.
Note though,
that the company’s text messages have accomplished several objectives:
- Begun
to train consumers to respond to mobile promotions; - Accustomed
consumers to promotional messages from this store; - Given
the company my wireless number, so they can in turn send future announcements
to me.
This was my
first direct experience with mobile marketing and it certainly opened
my eyes to new possibilities.
Discussion
Questions: What has been your experiences with text-messaging promotions
in stores? What opportunities as well as challenges do you expect retailers
will face in attempting to exploit this technology?
There is no doubt that retailers and other marketers need to grow the use of text-messaging technology to drive their business. One of the key questions raised in the article is how to get consumers to “opt in” with their cell phone numbers in the first place. Stores need to be more aggressive about using CRM techniques and website data collection to make this happen.
Consumers are likely to view text messages about sales promotions and other events as an annoyance unless they hear only from the stores of interest to them. Even then, retailers will walk a fine line between action-oriented sales promotions and “too much information” as far as the customer is concerned.
Was that much better than the PA simply saying, “20% off if you take your purchase to the register right now.” What did texting add to the discount?
I agree with Bob except that it probably limited the redemption slightly, but then, what’s the point?
What did it add? It now gives the store the phone numbers of those who shop there and they can send out texts about upcoming events in the future. Modern clienteling?
Texting is a gimmick…but it could be a very successful one. Retailers are looking for ways to connect with cellphone users prior to cell-as-payment-device, and chances are good that they’ll find a way to do it. Now that texting isn’t the realm of the young alone (both my elderly parents are doing it!) the experimentation could well pay off. Grocery stores should master putting coupons on cells–customers HATE lugging around hundreds of little pieces of paper!
Yes, in a seemingly benign yet truly underhanded way, the store in the article was gathering cell phone numbers for who knows what future use. Were I a long-time customer of this store (or any store) which used this ploy, I would be quite unhappy that they were, in a sense, blackmailing me for my phone contact number in order to receive a discount. And, unless they were willing to happily give us the same discount after we smilingly marched up to the counter (without texting) and said “tent,” I would seriously reconsider my patronage of that business. Marketing via e-mail is annoying but I absolutely draw the line at marketing by cell phone.
Text messaging is likely to play an increased role in consumer purchases–particularly in categories like electronics, apparel, grocery, and eating out, and as pointed out, select retailers owe it to themselves to test ways of making the medium work. Text messaging via telephone offers a great upside for “word-of-mouth” messaging, which plays an ever increasing role in consumers’ lives, as we seek sources that we can “trust.”
HOWEVER: The medium at this stage continues to be an application, at least in the United States, that is embraced mainly by a younger adult–18-34 (teens even more so). Individuals who choose to text message step up to the plate to share information. When they conduct an online search, fully 27.4% of 18 – 24 year olds will then quickly text.
Potash Bros. in Chicago, an urban grocer, has sent text messages for years. Customers are actually eager to sign up (and therefore supply mobile numbers, email addresses, etc, to the retailer). Even though I live in Los Angeles, I signed up to receive them just to follow their promotion strategy and execution. However, they have since discovered where I live and have evidently taken me off their distribution list. I remember one early text that they sent stating something like, “Stop in Potash Bros. on your way home from work to get 25% off off ready-to-eat dinners.” I got this text in the early afternoon.
I think that was a great promo. There are all kinds of innovative ways to utilize this channel.
Not quite clear from this description how the actual redemption was accomplished at the register–I assume a message or “coupon” was displayed on the phone’s screen? Was it scan-able?
Still very glad to see a real-life example described. The promotion depended upon shoppers listening to the store PA system, of course. It also selected only people with SMS activated on their phones–probably most of the target shoppers, but not all.
As a “control” for the experiment, I wonder how well the audio announcement would have worked if it skipped the texting part and just declared: “For the next 60 minutes, sign up for our email list at the register and take an additional 20% off any single item…”?
Finally a request to Mark: Kindly report back in this forum if you receive follow-up promotions via your cell phone from this retailer? It would be interesting to trace the rest of the loop and learn your impressions.
I see this as an effective, hassle-free way of collecting customer data. Texting to avail promotion enables [the retailer] to capture the customer’s mobile number without the hassles of handling long queues of customers waiting to sign up with a form, keys those into the system (if not electronically captured) and [avoids] customer frustration when the limited time of the hourly promotion is up while he/she is still waiting to sign up.
The advantage using text messaging to distribute the offer, rather than just announcing it over the PA with no text, is that the retailer now has a customer’s cell phone number in their database to communicate with and thank the customer and, more importantly, invite them to opt-in to receive future text alerts & offers from that retailer to drive future visits. Very smart.
I agree that this is primarily another way to collect customer data so as to better market directly to individual customers. This one is fraught with danger, however. Of all the ways to communicate with a customer, a cell phone is the most personal and closely held. Customers may not appreciate trading that information for an in-store discount if they start receiving unsolicited text messages.
Me, I’d be mad as hell. Which is why I can’t imagine ever responding to such a pitch.
The technology isn’t what matters here. An on-the-spot discount via text is no different than Kmart’s old flashing Blue Light Specials. The medium doesn’t really matter and in this case, technology doesn’t change consumer behavior very much.
There’s a lot of fascinating stuff happening in the realm of mobile marketing but text-to-save isn’t really very ground breaking. It just feels cool because it’s different.
The use of in-store text promotions is a growing market. For retailers that want to drive more sales, an instant coupon is a great incentive for a customer. It’s fast and convenient, two qualities behind many customer purchases. The use of mobile devices in retail is not limited to just text-messaging promotions, however, but for actively engaging customers via short surveys. Texting lends itself very well to a numerical rating system or short “Yes” or “No” questions surrounding a customer’s experience at that establishment. It allows retailers to interact with a customer at the point-of-sale and obtain genuine responses while the experience is fresh in a customer’s mind. Plus, texting is a fun way to learn more about your customers’ shopping habits, in-store experience and how to improve on your retail service in the future.
I’ve had some first-hand experience with this recently. One of our customers launched a text message campaign, targeted a couple hundred of their locations around the country and asked their customers to text in their e-mail address for a chance to win a prize. As a result, over 15,000 customers responded with their e-mail address within less than a month. Afterward, those customers were sent an e-mail invitation to participate in a standard Web customer experience survey, of which over 2,000 were completed.
In action, text promotions/surveys can be a tremendously powerful marketing and customer-experience management tool.
As the author of this piece, I experienced the text messaging promotion first hand. No, I have not yet received any follow-up texts from them–shame on them not to at least provide a survey in follow-up to this promotion.
I do feel that this promotion plan is different from in-store Blue Light Specials, since it in effect opens up a new channel of communications. While consumers are indeed protective of their cell phone numbers, I do not think it will be long until location-based text promotions using GPS are commonplace. Remember, there was a time (a long 5-years ago!) when consumers held their email addresses in similar regard. Given the acceptance of new technology is accelerating and smartphones are blurring the lines between computers and cell phones, I think text messages will become accepted in the next 12-18 months.