Tim Fujita-Yuhas, Director, Product Management – June 3, 2014
SMS is a faster, easier communications solution to develop and deploy by a business for their mobile customers than a mobile application, and frankly, it is more accessible to a larger percentage of mobile phone customers than a mobile app is. Of the 6 billion cell phones in use globally, only around 1.1 billion of them are mobile-broadband devices. Businesses should make sure they are maximizing their investment in SMS as part of their Mobile First engagement strategy.
1) Customers expect Marketing AND Customer Service not Mobile Marketing OR Mobile Customer Service
Most mobile applications are funded by a business’ marketing department rather than its customer service department. So this means that the marketing department is setting the priorities for what goes into the mobile application and their business measure of success usually revolves around increasing revenue through upselling. However, most customers are interested in improving their self-service customer service experience while using their mobile phone. Customers want to both proactively receive information that affects their relationship with businesses and they want information at their fingertips on their mobile phone when they decide that they need it.
2) Not all customers can download your mobile app.
Not everyone has a smartphone. Smartphone adoption rate is in the 60+% in the US, but that means there are a lot of your customers who still don’t have one. Also, unless you have created mobile apps to run on all the smartphone vendors’ operating systems, then not every smartphone user can use your mobile app. Contrast this with text messaging that is not only available as a feature from all mobile phones sold, but SMS is increasingly being included as an unlimited messages option when consumers sign up with data plans from their mobile phone carrier.
3) Not all customers are going to want to download your mobile app.
As Pew Research points out, some 83% of American adults own cell phones and three-quarters of them (73%) send and receive text messages. Many people still use and prefer the simplicity and immediacy of texting versus interacting with mobile apps. For example, contextually relevant interactions such as being able to check the balance on a gift card when you’re about to use it are easier to do via text messaging. Similarly, receiving a text message for an appointment reminder is preferable to having to download an app just to get such a reminder when a consumer doesn’t need to have frequent appointments with a business. In addition, if a consumer just wants a coupon for a store while shopping, they would rather text in to receive the coupon than have to download a mobile app. See 2013 Nielsen report on Activities performed by smartphone users. Even amongst the smartphone users, adoption rates of business provided mobile apps aren’t as great as the “opt in” rates of many SMS mobile marketing programs which again represent a larger segment of your mobile phone customer base.
4) Not all customers are going to use your mobile app once they downloaded it
Customers want businesses to provide options for proactive notifications regarding their business relationship with them. Look at the number of mobile banking alerts customers can get from most bank’s mobile apps. Also, if the mobile app doesn’t provide push notifications, many customers aren’t going remember the app is on their phone and continue to use the mobile app once they downloaded it. Mobile apps with push notifications for reminders and alerts based on the business relationship are going to engender more frequent usage. As Forrester Research puts it, mobile consumers want utility and they want it now from mobile engagement solutions.
5) Customers pay more attention to text messages than mobile application push notifications
Several studies have shown that mobile phone users read their text messages more quickly and at very high rates. The most often quoted statistic is that 90% of text messages are read within 3 minutes. This isn’t something that other communications channels such as mobile app push notifications are achieving. In fact, the largest push notification aggregator Urban Airship compares push notifications with email marketing since that is a channel that they can beat rather than comparing with SMS messaging.
In summary, SMS is really “Mobile First” compared to a mobile app. It’s faster to develop, better at reaching more of your customers, and has higher engagement rates with them. Businesses are increasingly relying on SMS due to its ubiquity, mobile phone interoperability, ease of use, and global reach. Consider whether you should be investing more in SMS for your business engagement with your customers before devoting more resources in a mobile app strategy.