Blog

| December 7th 2010

Permission marketing relies on the theory that since consumers are opting in to receive communications, they are more likely to pay attention to the communication they receive. This contradicts the traditional interruption based marketing where companies fight for the attention of consumers and must surpass thousands of uninterested consumers in order to source a few golden nuggets. New media such as SMS text messaging from mobile phones, have created powerful tools for direct and interactive permission marketing (Heinonen & Strandvik, 2003).

Mobile media creates an environment of almost instant communication, anywhere, anytime, that can support one-to-one, many-to-many, and mass communication (Scharl, Dickinger & Murphy, 2004). There are a number of benefits to integrating mobile marketing into the existing marketing mix such as:

1. Cost Effectiveness " SMS marketing is more cost effective than other forms of marketing. As long as a company is efficient in convincing customers to opt-in to the SMS service, the cost is very small as it only involves the cost of sending the SMS. If a company fails to convince customers to opt-in, they may need to purchase numbers. Although this can be a little more expensive than purchasing email addresses, experts agree that SMS's ability to specifically target groups helps to justify the cost (Dickinger, Haghirian, Murphy & Scharl, 2004).

2. Response Rate " The consumer response rate for SMS marketing is somewhat higher than other media campaigns. European mobile marketing experts have confirmed the observed higher response rate, adding that consumers are also more likely to respond instantly to messages and use the full 160-character limit (Dickinger, Haghirian, Murphy & Scharl, 2004).

3. Integration with other media " SMS marketing campaigns can easily be used to complement other media in a campaign. Due to the 160-character limit SMS should not be used as the main media in a campaign (Dickinger, Haghirian, Murphy & Scharl, 2004). The limited characters can however be an advantage if utilized correctly, as they serve as a short, precise message to consumers which will not take up much of their time. In this sense, an SMS can have similar benefits to Twitter.

4. Mobile Coupons " Many companies can benefit from sending out mobile coupons. Not only is mobile couponing environmentally friendly, it also saves on the cost of design, print and mailing paper coupons to customers. The other advantage is that a mobile coupon is quick and easy for customers to present to shop/office staff, and it reduces the risk of customers losing or forgetting to bring in a paper coupon (Dickinger, Haghirian, Murphy & Scharl, 2004). Most people tend to have their mobile phones with them when they venture out, so unless they delete the text, they are likely to have the coupon with them at any given point of time.

5. Advertising " There are two methods of mobile advertising: Push and Pull. Push advertising sends out relevant, but not specifically requested information which may interest the consumer (eg. Promotions, coupons). Push advertising can be beneficial in that companies are sending more focused information to people they know are interested in it. This saves marketing resources trying to figure out how to get people to pay attention, and how to get the attention of the right people!

Pull advertising adds messages to information requested by the consumer, such as weather reports and daily horoscopes. As consumers often view pull advertising as requested content, the line between advertising and service becomes blurred (Scharl, Dickinger & Murphy, 2004). Since consumers are actually requesting this service, the likelihood of them paying attention to the advertisement is greatly increased.

6. Customer Relationship Management (CRM) " Companies can utilize mobile marketing in their CRM practices. SMS can be linked to a customer loyalty programme whereby free newsletters, ringtones, or coupons are sent to those that sign up (Dickinger, Haghirian, Murphy & Scharl, 2004). Once again this is relatively cheap for the company, and easy for the consumer. Companies may also choose to use SMS for daily CRM functioning, for example meeting and appointment reminders, or billing/payment reminders.

7. Viral Branding " Mobile marketing is a branding tool, and as such can be used to give companies a competitive edge (Dickinger, Haghirian, Murphy & Scharl, 2004). By creating interesting, entertaining and innovative SMS messages, companies can potentially create a viral effect whereby customers like the SMS so much they forward it to all their friends. If this can be done, the company gains increased loyalty and trust, increased brand awareness and possibly new customers, and all at a very low cost as the original SMS were only sent to customers.

As illustrated above, mobile marketing can be very beneficial to an organization willing to implement it into their marketing mix. If done correctly, mobile marketing has the ability to effectively reach target groups quickly and efficiently, with very little cost to the company. It also benefits the consumer by providing relevant, personalized marketing that can be accessed whenever and wherever is convenient.

Dickinger, A., Haghirian, P., Murphy, J. & Scharl, A. (2004). An Investigation and Conceptual Model of SMS Marketing. Proceeding of the 37th Hawaii International Conference on System Sciences.

Heinonen, K. & Strandvik, T. (2003). Consumer Responsiveness to Mobile Marketing. Paper presented at Stockholm Mobility Roundtable, Stockholm.

Scharl, A., Dickinger, A., & Murphy, J. (2005). Diffusion and success factors of mobile marketing. Electronic Commerce Research and Applications, Vol. 4, pp. 159-173.