SMS has a fine future
3GSM was awash with excited talk of mobile TV, WiFi and “3G on steroids”, DVB-H, HSDPA, DAB, Wimax, MediaFLO, DMB, ISDB-T … But Ben King thinks this will be the year that trusty old SMS finally ful
fills its potential, especially as a tool for the forward-thinking enterprise.
This impression was made all the more stark last month by the release of figures of mobile internet usage from the MDA. The chart shows a worrying slowdown in the growth of page impressions over the second half of 2005. In fact December 2005 levels were lower than those in May 2004. Are we really so sure that these are services that consumers want?
Consider the facts. 85% of the adult UK population owns a mobile phone, almost all of these handsets support SMS and usage figures have continued to grow month on month ever since 1999 – even the Queen has learned how to txt! if you are looking for a data technology with undeniable consumer appeal, then SMS is the killer app.
The elephant in the room
Messaging is fast, reliable, easy to understand and affordable for both consumers and businesses. A text message is less than 5% of the cost of sending a piece of direct mail, and that’s not to mention the fact that it’s real-time, automated and infinitely more personalisable than any piece of mass-produced printed literature. The applications for managing existing customer relationships, and for attracting new customers is immense.
Where it is being used by businesses, SMS is scoring high in terms of cost savings, increased efficiencies and greatly enhanced customer service.
The financial services sector, for example, has recently begun to take it up in a big way. We estimate that a top-five UK credit card provider could easily save £100m per year through implementing SMS to communicate with its customers.
We run a service for the AA whereby customers broken down on the side of the road are kept informed of the whereabouts of the yellow van by text message, therefore avoiding the need to make panicky phone calls wondering when they are going to be dealt with. As a result, the AA is currently saving more than £360,000 per year by reducing call centre man hours. With the cost of handling a customer call averaging more than £2, imagine if just a small percentage of businesses prevented incoming calls using SMS updates.
And that’s just the beginning. What about the NHS? Sending out text messages to remind patients of their appointment could save £150m per year in wasted doctor and nurse’s time. As for the savings potential for other Government departments – well, we stopped counting when we got to £1bn per year.
My point is that we still haven’t made the most of SMS, so let’s not get too carried away with mobile TV, video-on-demand or Wi- Fi on the mobile. Their time will come. SMS has taken until now to really explode as a B2C tool because of issues around common standards and billing platforms. MMS is only just coming to terms with these complications 3 fi years after launch. We have to learn from these lessons and not get too carried away with newer technologies before they’re ready.
2006 will be the year that SMS fulfills its potential as a B2C tool. It’s accessible, it’s inexpensive, its personal and its relevant. It returns response rates of 15%-30%, it enhances customer service and it reduces costs. So let’s tap this largely untapped market which is messaging and then carry what we learn through to other technologies. Let’s not run before we can walk – that way we might avoid another ‘WAP is crap’ scenario.
Ben King is Marketing Manager for Wireless Information Network (WIN), one of the UK’s leading providers of wireless data services, including SMS and MMS picture, video and audio messaging.
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