SMS is Best: Your Mobile Priorities Might Be Overrated, Underperforming

Press release – March 3, 2014

By Steve French, Global VP of Product Management & Marketing, OpenMarket for Wired Innovation Insights

The following statement could cause side effects including shock, confusion, anxiety or panic: The most effective engagement channel that enterprises will leverage over the next year is SMS messaging.

Mobile apps appear to have reached the “peak of inflated expectations” on Gartner’s hype cycle. Enterprise executives are realizing that the resources invested into building and maintaining a mobile app is not providing the expected return on investment. This is compared with SMS or MMS, which in many use cases can achieve the same goals with lower costs, while utilizing distribution channels preferred by consumers and employees alike. By the end of 2014, expect the mobile app frenzy to fade as global enterprises increasingly rely on SMS due to its ubiquity, mobile phone interoperability, ease of use and global reach.

According to Forrester, individuals send or receive an average of 35 messages per day — that’s over 6 billion messages worldwide every 24 hours. Unlike mobile apps or over-the-top (OTT) messaging services, all mobile users — regardless of phone type, geographic location or data plan — can send and receive SMS messages. This represents three billion mobile users with whom enterprises can potentially engage (Source: GSMA).

Additionally, consumers actually favor communication provided by SMS — both to receive information from brands, or to inquire to brands themselves. A recent survey, completed by Millward Brown Digital, found that consumers worldwide welcome engagement with companies via mobile messaging. They’re even willing to provide personal data, including location, to get relevant offers. Moreover, the majority prefers SMS over other marketing channels, including video advertising, banners and email.

Enterprises also prefer SMS and MMS messaging. While mobile apps are all the rage, there are glaring limitations in their ability to drive business results and increase interactions with customers effectively. For example, studies show that achieving sustainable application use is more challenging than enterprises might expect. One recent survey from mobile interaction specialist Tyntec, found after 20 days of downloading an app, less than five percent (5%) of customers are still actively using the application, while eventually 80-90 percent of business apps are deleted altogether. If a company’s app reaches only five percent of a customer base, how effective can it actually be?

Enterprise preference for SMS is more prevalent than you might think. In fact, an August 2013 Forrester study reported that 70 percent of enterprises today consider SMS the number one mobile technology, with an additional 16 percent planning to utilize SMS in 2014. SMS usage far exceeded other technologies like QR codes, voice recognition and push notifications, which are closely linked to mobile apps. Additionally, the top three priorities for enterprise mobile communication strategies were to increase customer engagement, improve customer satisfaction and finally, acquire new customers — all of which SMS can help to achieve.

The uncoordinated or “renegade” IT spending on mobile initiatives is destined to catch the eye of CFOs, forcing CIOs to lower the cost of mobile communications. SMS is poised to become the cost-effective alternative to disparate, high-cost mobile app development projects that only reach a small segment of enterprise target audiences. To further reduce costs, CIOs will need to reign in overlapping mobile initiatives throughout the enterprise, and leverage mobile platform providers to consolidate cross-department uses cases — versus working with single-purpose solution providers for each and every use case. Taking a holistic, cross-functional approach by partnering with mobile experts will enable enterprises to focus on the most impactful use cases, better utilize constrained resources, and gain enterprise wide synergies by working with a few strategic partners.