About six months ago I received a parking ticket for overstaying my welcome in Auckland’s Nelson St. Given the amount was so piddling ($12.00), I promptly filed the ticket under my car seat and months later received a letter explaining that I’d been convicted in court of failing to pay a fine and now had to pay another $30 court costs. Keen to get the matter settled before I had to pay the cost of a further escalation (an additional $100), I phoned the courts payment centre.

What was interesting about this call was the operator took my mobile number and asked if I would like to ‘opt in’ to be notified by text message of any outstanding traffic violations in the future. I said yes. It occurred to me at the time that while this wasn’t in anyway the ‘cool’, ‘happening’ or ‘youth culture’ oriented use of texting I was used to, it was nonetheless going to save both me, and the district court, some reasonable money in the future should I transgress again. Welcome to the brave new world of text-messaging – no nonsense business applications that work. But in order to fully embrace the topic, let’s get two things abundantly clear right from the outset.

1) Texting is not the sole domain of teenagers!
Yes it’s true that teenagers love it. But interestingly this is almost a uniquely New Zealand phenomenon – for the most part due to the high cost of mobile phone calls here. How many times do you see a teenager on The OC TV programme get a text?

You don’t, because over there (and in Korea, China, Hong Kong, Singapore and even Australia) mobile phone calls are far less expensive than in New Zealand, and as a result, texting, as a ‘youth thing’ will never develop to the extent it has here. At text solutions experts WisdomTech, MD Terence Hooi (pictured right) says the youth positioning of the medium in New Zealand is something of a double-edged sword. “It’s great when you’re talking to a company that wants to target that youth demographic,” he says, “because they latch on to text really quickly. But then you see mostly youth targeted initiatives in the marketplace using text – and that only serves to reinforce that preconception that text is about youth. The fact is, text as a medium or channel has wide ranging business applications, and this message is starting to get out now.”

At The Hyperfactory, Geoffrey Handley agrees that businesses are looking beyond ‘youth’ for ways to incorporate texting into their business. “There aren’t as many preconceptions among the business community as there used to be,” he says. “One reason is many more of the decision makers are using mobile data in their own lives so they’re personally aware of the communication advantages it offers.” Interestingly Handley observes that the government, as an organisation, has been one of the first to see the value in text messaging.

For example, the 2005 election was the first to use text messaging as a way for people to request enrolment packs. “Thousands of extra requests for enrolment forms came to us,” says Electoral Enrolment manager Murray Wicks. “In the first two weeks of the campaign we had close to 18,000 text messages requesting enrolment forms and we more than doubled the number of people wanting to enrol – all because of text messaging.”

According to Run The Red director Ben Northrop (pictured right), another benefit of the text channel, that is not restricted to the ‘youth’, is people whose first language is not English. “We are finding that non-native English speakers are more comfortable sending a text message as opposed to calling and talking to an operator. PSIS is a another example. The text banking service is widely adopted in rural areas where it is more convenient to send a text than visit a branch. Many of the PSIS senior citizen users prefer text banking to phone banking as they may be hearing impaired but are comfortable with the easy to use text service.”

2) Don’t approach texting as a revenue generator
Yes there have been a lot of text based competitions and other types of promotions that involved participants paying a relatively large sum via text message for the opportunity to enter. But looking at using text messaging as a way for your business to generate some cash is completely the wrong approach says WisdomTech’s Hooi.

“The smartest thing the Trade & Exchange did (when installing a WisdomTech solution for accepting ads via text messaging) was they managed to get around the idea of ‘how do we make some money from this?’ Hooi says the early days of online banking offered some lessons worth remembering. “You had a situation where some banks had spent all this money delivering online banking facilities, and then they actually charged their customers to join up and use the services – basically they were discouraging trial rather than encouraging it. It was only when they dropped the ‘bill for it’ scenario and opened it up that they saw the savings generated by lowering their transaction costs. And the same applies to texting today, what you will save in transaction costs will far outweigh the few cents in income you might generate by attempting to price your text services as revenue generators.”

"What's more, there simply isn't enough people in the country and the government has prohibited the running of text competitions over 20 cent," adds Northrop.

Today's texter
So who is today’s texter? Hooi says there are basically two types. “There’s the person to person,” he says, “using text as their primary communication medium and that’s typically the young. But then the other main user group aged say 25 plus, are using it frequently and they use it for mission critical personal reasons, for example texting someone to confirm an appointment time or location.

The difference between the two groups is the first group might be sending 50 texts a day – basically just random time wasting ‘wassup’ or ‘how u doin’?’ texts, and the second group might only send two of three texts a day, but they need to send those texts. For them it is a mission critical important text. So yes there is a huge spike in terms of total texts sent and received by the very young, but the older group have incorporated text into their daily lives in real and important ways.”

Making the business case for texting
While at the outset the vast majority of text applications were promotion based (Text ‘Win’ to 6262 to Win!), today more and more businesses are discovering that the opportunities for the mobile channel outside of promotions are endless. For instance, banks can send Forex alerts or interest changes via mobile. In a retail environment, text can be used for notification of orders placed or confirmation of shipping details.

Other industries can see benefit in leveraging the mobile channel for secure password or log in detail confirmation as ASB Bank has recently begun doing. At its core, the use of text in these instances is about maintaining a communication channel with a customer, in a convenient manner for the customer, 24 hours a day and at the lowest possible cost.

The sort of transactions or communications that are well suited for text-based solutions are those transactions a company makes that, although essential to its business or customer services rating, are relatively costly for what they are – phone calls, perhaps confirming an address change, checking an account balance or querying the status of an order, are classic examples. Replacing that voice transaction with mobile data (a text message) serves to maintain the relationship with the consumer and adds value to the communication, but ultimately incurs a lower operational cost. Figure 1.0 (pictured below) illustrates a cross section of local business challenges and the text applications delivered that addressed them.

May 2006

BUSINESS

TRADE &
EXCHANGE

SUPER 12

TRUSTPOWER

TYPE

Advertising
Transaction

Sports
Loyalty

Utility
Services CRM

CHALLENGE

An iconic publication in the second hand goods market, Trade & Exchange wanted a text solution that could both relieve pressure on its call center and be easy for young advertisers to access.

Telecom Mobile wanted to underline its sponsorship of Super 12 rugby using a Super 12 text competition to connect with its 025 & 027 customers.

Rather than having to manage thousands of phone calls when a power outage struck, TrustPower wanted an easier way to keep its 238,000 customers informed.

SOLUTION

MessageForce

RedPlay

MessageForce

SOLUTION
PROVIDER

WisdomTech

Run The Red

WisdomTech

BUSINESS

WESTPAC

DULUX

PSIS

TYPE

Banking
Marketing

B2B
CRM

Banking
Transaction

CHALLENGE

Westpac wanted a youth friendly way to encourage tertiary students to ask for information packs relating to Westpac’s student banking offers.

Dulux wanted a text based solution for communicating with its trade customers in a more effi cient cost effective way.

PSIS wanted to broaden the range of channels through which its customers could access banking services.

SOLUTION

RedDirect

HYPER'CRM

RED-Safe

SOLUTION
PROVIDER

Run The Red

Hyperfactory

Run The Red

But enough about business to consumer – what about the cost savings relating to the internal use of text applications? Typically, around 40% of a organisation’s communications bill comes from office-to-mobile calls and businesses are beginning to recognise the cost saving benefits of text messaging over voice calls. Leaving voicemail messages can be expensive and time consuming and there is always the uncertainty as to whether an individual has picked up their voicemail message (everyone has a mobile phone so at least you know the text got through). Most of the usage examples above were ‘outbound’ customer-focused uses of text messaging, however, use of text as an internal communication tool is also increasing in popularity.

A recent survey in the UK found that the heaviest users of text messaging were in the Construction, Healthcare and Social Work, Real Estate and Transport sectors. Text messaging enables information to be sent to groups of people quickly.

For example, service people or sales reps on the road can receive their next job via text and the added convenience of reply that text messaging offers enables a job’s current status and employee’s location to be clarified, enabling more efficient job scheduling. Use of mobile phone cameras and MMS messaging also improves business accuracy. Not sure what car you’re supposed to be towing away, or what house you’re supposed to be painting? Take a photo and send it to the owner/client to confirm. Because it eliminates the temptation to chat, text messaging is an efficient way to stay in touch with staff without having to deal with the ‘how’s your day going’ water cooler niceties that take up valuable minutes in a typical phone conversation. Texting can also dramatically cut the communication costs of organisations with staff traveling internationally.

What text is and is not While it’s clear that text messaging is becoming an easy way to send and receive useful ‘bite-sized’ pieces of information, and any business that relies on that type of communication has a lot to gain from investigating text options, it’s also clear what text is not – at the moment anyway.

For one thing it is not a medium for complex information. Messages are still limited to 160 characters, and viewing those messages is still done (PDAs aside) using the comparatively small screen of a mobile phone. A text message is also is not a place for a receipt style communication that must be stored for a long period of time. Mobile phone memories are very small (some are actually less than a megabyte) so texts must be deleted frequently to allow space for new ones. And finally, a text message is not a random ‘spam’ marketing channel in the way that email has become. While it’s technically possible to broadcast lots of texts to lots of recipients, for a number of reasons that has not happened yet, and hopefully won’t.

For a start the costs are comparatively high when compared to email, and then the gate keepers (Telecom and Vodafone) guard their networks jealously and are very alert for potential abuse of texting – everybody learnt their lesson with email and nobody wants to be the one to ruin text’s potential by overplaying their hand. “As long the communication is relevant and useful to the consumer,” says The Hyperfactory’s Handley, “and it was requested and not abused, there is obvious value in the mobile channel. This value is borne out by the effectiveness, measured in a number of ways including customer reaction, cost, revenue and resource, of the campaigns that are executed.”

Ah yes, effectiveness – and why is text still so effective? Wisdomtech’s Hooi sums it all up nicely, saying the fundamental reason why text messaging is so important today, is because people still pay attention to it. “The mobile phone is a magical thing,” he says. “People almost always have one with them and we have been trained since an early age to respond to a phone. SMS has an urgency that remains much greater than email. People are conditioned to act when a phone signals them. The magical thing is that the phone goes ‘bleep’ – and people take notice when it does.”

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