SMS vs Push Notifications - which mobile communication method is best to reach customers?

LOL

1

Introduction

It may be hard to believe that SMS, which stands for “short message service”, is over 20 years old. From the first text message sent by an engineer from a computer to a colleague's mobile phone in December 19921, individual, person-to-person, communication, to the 8 trillion texts sent globally in 20132, there’s been a lot of change; even new dictionary entries to capture inventive phrases like “LOL” and “OMG” which help texters communicate in an en-vironment limited to 160 characters.

SMS was introduced to mobile phone consumers in the mid-90s and rapidly became a popular form of individual, person-to-person communication, but was also quickly adopted by businesses, non-profits and the government sector as an effective way to communicate, engage, and promote goods and services. 1. http://www.theguardian.com/technology/2014/jan/13/number-text-messages-sent-britain-falls-first-time 2. http://www.portioresearch.com/en/blog/2013/17-incredible-facts-about-mobile-messaging-that-you- should-know.aspx

With smartphones, the mobile communication space has become more sophisticated with instant messaging and push notifications from apps vying for our attention. We are spending more and more time on our phones not just talking and texting, but surfing the web, using apps and playing games. In fact, it’s reported that today Australians spend an average of 132 minutes a day3 on their smart-phone and look at their phones on average 150 times per day!

Given that many of us have our phones on or near us 24/7, business managers are smart to ask which forms of communication are best to reach customers today.

With the rise of instant messaging and push notifications, some may wonder if SMS is still relevant in the changing mobile landscape.

This paper will show how SMS has successfully been used in marketing and business communications to date and why there are still many advantages to this more established technology compared to the newer ones.

3. http://www.millwardbrown.com/AdReaction/2014/#/main-content

132 MINUTES A DAY

150 TIMES PER DAY

2

The modern business use of sms marketing

Although reports indicate that SMS will peak globally in 2015 at 8.6 trillion messages annually4, there is compelling evidence that SMS isn’t doomed for a total knockout and is a robust and effective option for businesses to reach their customers now and in the future.

As the following examples show, SMS effectively reaches any customer, whether they have a smartphone or a conventional phone; reliably transmits messages, no matter if a user is connected to a data network or a cellular network; and are read immediately, with an average 90% open rate.5

4. http://www.portioresearch.com/en/blog/2013/17-incredible facts-about-mobile-messaging-that-you-should-know.aspx5. http://mobilesquared.co.uk/media/27820/Conversational-Advertising_SinglePoint_2010.pdf

8.6 TRILLION

2015

3

Retail - Farmers DirectNo need to cry over spoiled milk! Aussie Farmers Direct is an independently owned business that sources and delivers fresh, locally grown produce, meat, dairy products, eggs and other food products and to over 130,000 households in Australia. The company implemented an SMS notification system provided by SMS Central to remind customers to leave out a cooler for their milk deliveries. Calling customers each morning would have been far too time consuming and costly for Aussie Farmers Direct, while SMS allowed them to contact each and every milk customer in just minutes per day. The SMS alert helped ensure that customers had fresh milk, even if they weren’t home at the time of delivery.

130,000HOUSEHOLDS

4

Transportation - Metro Melbourne

415,000CUSTOMERS DAILY

7. http://www.flickr.com/photos/ptua/6313319155/ 5

Metro, the city of Melbourne’s metropolitan rail service, operates 203 trains across 830km of track and services 415,000 customers daily. Metro established an SMS alert system in 2001 to alert commuters to the status of trains, delays or cancellations. Although Metro introduced a mobile website in 2011 and attempted to move all customers to the mobile service, they ultimately chose to continue SMS alerts when subscribers voiced their preference to be notified immediately via SMS versus putting the burden on riders to check Metro’s website or Twitter page for delays and changes. 7

Software as a Service (SaaS) - Xero Accounting SoftwareXero, Australia’s leading small business online accounting software, offers their premium business customers the ability to automate superannuation payments using a secure SMS authorisation code provided by SMS Central. SMS authentication reliably reaches each and every one of Xero’s intended recipients and has helped the company consolidate their leadership position in online payroll innovation.

6

New forms of mobile communication - apps & push notifications

While we still use our mobile devices to make phone calls and send text messages, a growing portion of smartphone users’ time is spent interacting with apps. Given that we spend so much time on our mobile devices, and that the share of that time is increasingly consumed by apps, many developers and companies have decided to get in on the app action. In fact, over 100 new apps are added to the iTunes app store every month8 and, by Apple’s own account, the number of apps in the app store has ballooned to 1.2 million, now rivalling Google’s app store number. 9

A common feature of mobile apps are “push notifications” which are short messages sent by an installed app alerting the user of new updates, offers, and reminders. Push technology has actually been around for several years and until recently had primarily been used for notifying personal computers when a new email ar-rived or a software update was available. Today, push notifica-tions are most commonly associated with mobile apps. Push noti-fications can be sent even when the user is not actively using the app. Since push notifications also appear automatically on the screen of a user's mobile device, they may seem to offer the same benefits as SMS, but the technology differs in a few key areas.

8. http://www.pocketgamer.biz/metrics/app-store/submissions/9. http://techcrunch.com/2014/06/02/itunes-app-store-now-has-1-2-million-apps-has-seen-75-billion-downloads-to-date/ 7

10. http://services.google.com/fh/files/misc/omp-2013-au-en.pdf

Limited reachFirst, to download a mobile app and receive a push notification a user must have a smartphone. Relying on an app and push notifications means a company will automatically miss reaching the 35% of Australians that don’t own a smartphone device. 10

Secondly, users must also have your app installed on their smartphone and also have selected to receive push notifications to get messages from the app. If a user has disabled push notifications or their device is not connected to data coverage, then they will not receive a push notification.

Contrast this with SMS messages, which can be received on any device over any network or type of connection, all without the user needing to download an app or enable notifications on their phone.

35%

8

11. http://mashable.com/2012/02/02/how-to-make-app/12. http://www.fiercedeveloper.com/story/maintaining-app-critical-its-overall-success/2012-05-2513. http://www.zdnet.com/au/australians-turn-away-from-contracts-for-new-phones-study-7000025114/14. http://mobilesquared.co.uk/media/27820/Conversational-Advertising_SinglePoint_2010.pdf

Costly development

Custom apps can also be costly to develop and maintain. According to Mashable, a no-frills “super simple” app will cost a minimum of 10,000 USD to develop; a more likely figure for a well-designed app is 20,000 USD.11 In addition, a company should budget for annual maintenance between 15-20% of the original development costs. 12

Another consideration when developing an app is if it should be able to function across multiple operating systems (i.e. iOS, Android, BlackBerry, Windows, etc.). If so, you would need to invest additional resources to make your app separately for each platform, which could double or even triple your development costs. According to a study by technology analyst company Telsyte, about half of smartphone users in Australia have an Android phone, 42% use an iPhone and the remaining 8% of users are split among Windows, BlackBerry and Symbian operated phones.13 So, if you decide to only create an app for the iOS operated iPhone, you would be missing half the market that uses Android powered phones or vice-versa.

Conversely, SMS messages reach the target audience regardless of the phone type or mobile network provider and boast an average 90% open rate. 14

9

15. http://www.localytics.com/infographics/evolution-of-the-almighty-app/16. http://services.google.com/fh/files/misc/omp-2013-au-en.pdf

Moreover, despite the growing number of apps available, consumers have displayed signs of branded app fatigue. Consider if you have truly unique content or functionality to entice users to download and use your app. According to a study by Localytics, only 22% of apps are used more than once after being downloaded.15 Additionally, while Australians have on average 33 apps installed, they have used less than half of them in the last 30 days.16

Comparatively, there is no app download required for a customer to receive text messages and it’s easy to incentivise customers to opt-in to receive SMS promotions through existing advertising, in-store promotions or on a company’s website. Many retailers and service providers, like salons, have easily increased their distribution lists by offering a discount to customers that opt-in to receive special offers and promotions via SMS. Real estate agents can encourage potential buyers and renters to text for more information on a specific property by including a dedicated SMS number directly on promotional property signage.

Z ZZ

Z

ZZ

Z

10

One-way communicationPush notifications are limited, they don’t allow the recipient to respond directly to the alert - they must often open the app or visit the website to complete another action in response to the notification. By using SMS for mass, customers and prospects.

X

11

Conclusion

Consumers today are increasingly attached to their mobile device. Smartphone use is only on the rise, along with the explosion in the number of mobile apps on offer with their accompanying push notifications.

A branded app using push notifications may be an effective option for big brands that have truly compelling content or unique functionality to offer customers. It may be great for retail and 1-way promotional offers, but it will be very challenging for push notifications to replace SMS when it comes to individual reminders such as overdue notices, appointment alerts, machine to machine notifications, and security related communications.

SMS communication offers easy, secure and unparalleled reach to the most mobile users, regardless of phone type or data connection. With SMS, companies can communicate directly with customers without the expense of developing, promoting and maintaining a custom app.

Even in a crowded mobile environment, consumers pay attention to SMS messages and open and respond to them more frequently than other types of mobile marketing messages.

12

Our most popular sms products for business

Here is a summary of the most common SMS products we offer to help businesses leverage the power of SMS communication.

13

Web SMSSimilar to an email marketing software, like Mailchimp or Campaign Monitor, but instead of scheduling and sending emails, you schedule and send SMS campaigns. Super popular for SMS marketing campaigns, with web SMS you use an SMS company’s web portal to build, schedule, measure and manage SMS campaigns.

Upload your database, send, receive and even interact with your list, save your templates and use dynamic fields such as #customer name to personalise your SMS content.Some advanced SMS providers have rules and triggers that allow you to automate your communications and internal flows, from automatic management of opt-out lists, to assigning contacts to specific groups.

14

SMS APIWith an SMS API, you can trigger SMS sends via your own system. If you have custom or enterprise level software that runs your business, whether it’s a CRM, POS or other custom applications, integrating an SMS Gateway into your software adds a whole new dimension and level of communication at a very low cost. Improve customer service and security, decrease cancellations and for urgent messages, communicate immediately!

Contact SMS Central to learn how SMS communications can make a positive impact on your company’s bottom line.

15

Email to SMSFor a really simple solution that can be used by any member of your business, Email to SMS is the way to go. Email is the worldwide standard for business communications and, along with Online SMS, your business can have the ease of email with the speed of delivery, mobility and open rate you can expect from SMS.Setup is very simple, you just register your email address and you are ready to start sending SMS from any email client.With 2 way SMS handling, responses can be received and managed in your email inbox. For sophisticated users, you can create a rule and triggers to forward replies to your own private URL.

16

SMS Central provides all of the above SMS services. Contact SMS Central to learnhow SMS communications can havea positive impact on your company’s bottom line.

web: smscentral.com.au

phone: 1300 971 093

email: hello@smscentral.com.au

twitter: @hellosmscentral