The True Cost of Cheap
SMS is the backbone of mobile marketing. Its benefits have long been recognised by the industry - it is instant, impactful and, don’t forget, cheap. It’s the latter feature, however, that is perhaps most contentious. While we all recognise the benefits of SMS as a marketing medium, the search for ever-lower cost transmission mechanisms can potentially incur new, hidden costs that can outweigh the short-term financial benefit.
We’ve all had the experience of a lost or delayed text message. At high traffic times, such as Christmas or New Year, it can sometimes take a message hours, or even days to arrive, if it arrives at all. While this may be little more than an inconvenience for a message from someone wishing a friend a Merry Christmas, when it comes to marketing messages, the impact could be much greater.
The problem lies in the difference between the needs of consumer and corporate SMS users. P2P (peer-to-per) messaging is generally delivered on a ‘best effort’ basis - if a small percentage of messages are lost or delayed, it is considered an acceptable cost. For marketers, however, campaigns are built on an assumption of reliable delivery, and with many SMS transmission systems, it could be that this is not the case.
The essential trade-off is one of quality versus cost. It is possible to buy message transmission at the lowest possible price, but there may be facets of the transmission mechanism that will introduce a level of unreliability. Conversely, there are higher quality solutions that offer guaranteed delivery, but there is likely to be a cost implication for this increased service level.
You might think that a few lost or delayed messages in a marketing campaign targeting millions is an acceptable trade-off for a lower transmission cost. But the overall cost is often not just financial - there are ways in which a missing message can cost an agency or a brand much, much more.
The first issue is around client confidence and opportunity cost. If a client can’t be confident in a transmission mechanism, they simply won’t consider it for mission-critical applications. This means that, while a client might be happy to use SMS for a straightforward push campaign, if they’re unsure about its reliability, then they won’t consider it for high-value CRM applications. The opportunity cost of this failure to consider is potentially huge; in fact, it’s a hidden price that’s almost impossible to quantify.
The second issue is consumer confidence. As we all know, consumer confidence or belief in a brand or service is a delicate thing. It takes many successful interactions for a consumer to have real faith in a service, but only one failure to permanently damage that trust. If you fail to deliver on your service promise, its more than likely that a consumer’s perception will be damaged in the long term.
We have more than enough examples of this in the mobile industry - look no further than WAP or picture messaging if you need reminding! If you’re interacting with a consumer on an ongoing basis, its vital that your interactions are reliable and timely. If they receive a voucher for a product after that voucher has expired, for example, then they’re going to be switched off from that brand, possibly permanently. Another example is VoIP. In the early, pioneering days of internet phone calls, sound quality was low and reliability was questionable. However, as enterprise-grade systems have arisen, more and more corporates are moving towards VoIP telephony.
Luckily, there is an alternative to low cost, unreliable mobile messaging systems. There are SMS solutions that can offer reliable, high quality SMS. These companies are designed to provide specialised messaging applications that can not only offer reliable messaging, but also offer a new level of accountability. Guaranteed delivery is in itself a hugely valuable prospect, but there’s more that this mode of messaging can offer.
For example, a key attribute of this sort of messaging is the delivery receipt - a return message giving the status of sent messages. These receipts can tell you whether a message has been received, and if not, why not. This sort of audit trail can demonstrate to clients the absolute reliability of the SMS transmission trail, and in doing so, can potentially open up the technology to a range of new opportunities, as well as ensuring consumer confidence in the specific service.
This is not to say that low-cost SMS doesn’t have its place. There may well be marketing applications that do not require complete reliability of transmission, in which case a low-cost solution might be the most appropriate. However, as mobile marketing applications move towards higher value interactions, for example, when it comes to authentication or time-restricted promotion activities, then the dynamics of the price/quality equation quickly change.
We all know that SMS presents fantastic opportunities for marketers. But what the industry needs to consider is how SMS is being deployed and transmitted. If we sacrifice reliability at the altar of price, then the impact could be significantly more damaging than at first it might appear.
Michael Kowalzik is CEO of TynTec