Pushing SMS loyalty to the next level

Has SMS had its day? Jason Lark, managing director, of data-driven marketing agency, Celerity, thinks it still hasn’t run its course as a marketing channel. Here he discusses what is left in the tank for SMS.


The Short Message Service (SMS) is still critical to many brands’ loyalty programmes. Far from being a technology of yesteryear, brands use its ubiquitous nature to enhance and amplify their multi-channel schemes, at a time when targeting and personalisation remains a top priority for 34% of retailers in Europe and North America and 28% in APAC.

SMS only

In fact, when SMS boasts a 98% read rate and a x10 click though rate compared to email, it makes sense for a brand to consider using it instead of any other channel, dependent on the loyalty reward on offer.

Take exclusive invites to events for example. Brands operating more than a basic loyalty programme will individualise rewards like events, and customers will willingly buy more simply to level up and gain access to product launches and offers. For a reward of this nature SMS is the more suitable communications medium as its ubiquity gives the customer the best chance of actually being notified in time to attend.

A new ‘Chat’ service (otherwise known as Rich Communications Services or RCS) expands the potential for this type of B2C loyalty programme, with audio and video messages, full-resolution photos and read receipt notifications.

It’s one to keep an eye on, as like SMS it’ll work on any Android or Microsoft mobile OS: its carrier driven (there are currently 55 of them including big names like Verizon – which will launch support for RCS messaging in ‘early 2019’ – as well as Orange and Vodafone), not Google driven. It won’t offer encryption unlike a few popular OTT messaging services, but unlike OTT it will allow retailers to send messages in bulk, which is one of the reasons SMS is such a useful marketing tool.

The issue with OTT comms is that it requires businesses and consumers to share the same messaging apps – after failing with its own OTT app (Google has announced it’s sunsetting it) Google has been quietly working behind the scenes to persuade carriers to adopt Chat. And because, once again, of Chat’s ubiquity, it’ll make it essential to all retail comms including loyalty programmes.

SMS boost

Retailers are increasingly using SMS to increase the effectiveness of their other channels like direct mail (DM) and in-app experiences. This works particularly well for luxury brands. Take Lacoste for example. It offers a lot of DM rewards. An easy way to ensure effectiveness and ROI of high value DM loyalty campaigns is to send an SMS checking that recipients have received their gift, simultaneously encouraging them to act.

An SMS is perfect for providing a simple link to a website to encourage sales, and/or to encourage them to share details of their DM reward on social to gain loyalty points. Likewise, SMS is also great for driving app downloads where a rich interactive experience can be provided with high levels of tracking and personalisation. Using SMS to drive an audience to an app store is a great way to reward a brand’s most loyal customers with things like in-app discount codes.


Level up

Using SMS to push customers to the next level of a loyalty programme is also a popular tactic. Retailers can prompt timely purchases with a well-timed message. For example, customers on the verge of higher tier of loyalty could be sent an SMS telling them they are only a certain amount of product spend away from getting into the brand party of the year happening next month.

Interestingly, nearly half of US online 18-35 year-olds say that these points-based programmes do influence what they buy and how much they spend, and the DMA’s latest ‘Customer Engagement 2018: How to win trust and loyalty’ report reveals that these points schemes are still, on the whole, well received in the UK too (87% are currently receiving these types of rewards).

So what?

Speed and convenience remain key to great retail experiences: “…the value of service, speed, convenience and newness remain constant…To continue to be successful into the future, we need to invest in technologies that will enable us to deliver on those qualities and better serve customers in a digitally-connected world.” That’s a quote from Brian Gill, technology senior vice president at Nordstrom, the American chain of luxury department stores.

Our old friend SMS is still prevalent for exactly the reasons Gill points out – everyone has access to it. In this same way, Chat has the potential to revolutionise loyalty schemes for retailers everywhere. With an explosion of use across multiple carriers, OEMs and OS giants, and with Google claiming the tech will be with us next year, it surely wouldn’t be long before Apple and its users are also exposed to the next wave of RCS loyalty technology.

Jason Lark, managing director, Celerity






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