Press release – October 10, 2016
By Tim Green, MEF
OpenMarket’s GM Jay Emmet knows a bit about SMS. He’s been selling mobile messaging for 20 years. And he still loves it. He talked to MEF about conversational commerce, machine-based messaging and why A2P is finally ready for its big moment…
Jay Emmet is talking about cheeseburgers. He likes his without anything on them. None of that lettuce or relish nonsense.
And in some countries, he can use a machine to order them to his precise specifications. Jay loves this.
And what has it to do with SMS? Well, Jay is making a wider point about the impatience of consumers – and the fact that there are finally channels to address that impatience.
In the case of cheese burgers, it’s a touchscreen. But it equally applies to A2P messaging. Especially when the dialogue is asynchronous. In other words, when the consumer is happy to wait for a reply. How much better to wait for a text than listen to muzak on a voice call?
It’s why Jay is so excited about mobile messaging, and the prospects for its oldest comms channel, SMS.
SMS is pretty old now. The received wisdom is probably that it’s a little clunky when compared with OTT apps. So why do you have so much faith in it?
Well, facts are facts. Yes, its true SMS was born in the 90s, but its engine is proven, it’s very useful and it’s not going away. The point about SMS is that it’s in every handset and every network on the planet. Every single one. And just about every human being is a trained and familiar user – there’s no education process needed.
SMS has a ubiquity that’s unique. If you have a global or even regional need for omnipresent reach, there is no substitute for SMS
So why is the enterprise messaging market only just getting started?
I’d agree that A2P is still in the very early stages. I remember 15 years ago Andrew Bud (founder of mBlox) and I talking about the idea that enterprises would one day incorporate SMS into their everyday communications. We didn’t think it would take this long!
You have to remember that big corporations are conservative. You suggest to a Fortune 500 that they switch from email to text, and it’s provocative. It takes them a long time to be convinced. Also, when they do commit, they’ll test it first.
But people are changing. The ones who are making decisions are not 20, but their customers are, and this new millennial generation has grown up with a mobile phone.
I’ll give you an example. My son needs car insurance, and there’s a company in the US that boasts it will give you a quote during a 15-minute voice call. But my son won’t wait on the phone for 15 minutes. He just won’t. But he would happily reply to a few texts.
So we’re in the early stages. The wind is blowing. If these companies see an ROI, they’ll do it.
How easy is it to convince enterprise customers of this ROI?
Well, you don’t talk to them about SMS. No CEO wakes up and thinks ‘how can I make my business more SMS-y?’ Our recent success has come because we position a switch to mobile communications in terms of business outcomes.
I characterise these simply as: more revenue; more profit; lower costs, mitigating risks and improving customer experience. If we can help with any of these, we will get their attention.
There are dozens, if not hundreds, of use cases we are opening up across entire organizations. Another example is in HR: if there’s a flood or a power cut and you want to know your employees are OK, SMS is the only option that doesn’t rely on power or Wi-Fi.
Can you give an example of a major enterprise success with SMS?
We have a TV content customer. It’s a cable company with a fleet of trucks that go out to install the equipment in people’s homes. Now, these engineers were missing around 10 per cent of appointments because the customers were out. Each time they did, it cost $200.
So now they send a text half an hour before asking if people are home. If they get a ’no’, they re-arrange. And ten per cent do say ‘no’. The result is a 10 per cent reduction in the company’s truck roll.
Now, we’re talking about a company that works hard in other areas of its operation to cut costs by a fraction of a percent. So it’s a huge win. They haven’t just cut costs, they’ve also improved customer experience. Normally, you do one of those at the expense of the other.
This is fantastic for the business unit that’s done it. Their business development manager is going to get a promotion, and the whole company will know about it. That’s the kind of success that A2P messaging will really benefit from, and OpenMarket is at the forefront of this change along with its forward-looking enterprise clients.
I suppose the danger here is that using two-way mobile messaging like this requires a cultural change. It’s doing outbound as well as in-bound communications – and lots of businesses aren’t used to that.
It’s very true. It can be difficult for some of these companies. They have to shift their thinking to be more interactive and they may not have thought about this. Getting more intimate with their customers is a challenge. It’s profound if you’ve done things the same way for 40 years.
But I repeat, our customers are starting to demand it. I’ll give another example. We have an e-commerce customer that sends emails when transactions fail for some admin reason like a consumer’s card expiring. They send emails – and no one opens them. So now they have started to send texts to remind people to look at their emails! It makes sense to move that interaction entirely over to SMS.
The point is, people always read texts – and they do it typically within a minute. It’s the best channel for anything time sensitive. I don’t want to know about a plane delay from an email, which I’ll read tonight after I’ve left for the airport.
Also, people don’t mind waiting when it’s under their control. It’s absolutely fine to wait a few minutes or even hours to reply to a text if you’re busy doing other things. You can’t do that on a voice call.
Do you expect to see more enterprise messaging on OTT apps?
For me, OTT apps are social networks. They’re for people who have a personal affinity with each other. Would I manage my car insurance this way? I might. But probably not.
I come back to ubiquity and consistency. How many of your customers use WhatsApp or Snapchat? How many have a data package? How many are trained users?
If P2P messaging keeps migrating to OTT apps, how will users perceive SMS in the future?
I really think SMS will become the preferred enterprise channel. And I predict that in three or four years most texts will be sent by businesses.
And will SMS be the same as it is now? What is your assessment of RCS (Rich Communication Services) for example?
Is it ubiquitous? No. If your use case requires ubiquity, it is not applicable. Also, I wonder if the new features are really needed. They’re obviously beneficial, and it’s nice to have video and media sharing and so on, but do I need any of this when I’m sending a reminder alert to someone? If RCS takes off, great. But it’s probably not going to happen soon.
Do you think SMS has a future inside machines?
Well, M2M (Machine to Machine) has been around for a long time. You can make a case for the usefulness of some ideas, but they have to make business sense. We’ve looked at gas meters and so on, but it’s hard to justify putting a SIM in every meter when the average monthly bill is $50.
Where it makes real sense is when you have a machine worth millions and a mission critical business case. We have a customer that makes body scanners worth $20 million. The machines can alert engineers when they malfunction, but before they go down completely. When engineers get a notification before a shutdown, that’s a huge saving.
What’s your view of chat bots? Are they the future of messaging, and how can SMS participate in that future?
I think SMS is actually the perfect medium for chat bots – though I prefer to call them service bots. You don’t really chat to AI. The fact is, most call centre interactions boil down to the same five questions. If you can deflect those answers away from a human agent to a bot – which customers actually prefer – you’ve reduced costs from $15 to 10c. So I see SMS revolutionising customer service.
Most of the momentum in chat bots is coming from OTT apps, why is SMS better?
Well, I would ask: how does Facebook make money? By selling advertising. I’m pretty sure that if I am on Facebook Messenger making an insurance claim, I will get an ad from a rival insurance provider five minutes later. Would any insurance company be comfortable with that? I wouldn’t be.
That’s why I believe in SMS. There are some live use cases for servicebots using SMS, we are working with a travel company in India for example. They are automating many customer service requests, and also staff queries such as remaining holiday time. Anyone with a mobile phone can use it, whereas the reach of OTT is not nearly as widespread.
These AI and machine learning SMS use cases have a proven and compelling ROI, so the hype around OTT app chat bots will ultimately be to SMS’s advantage.