SMS & the B2C Opportunity

Feature Article

SMS & the B2C Opportunity

By Paula Bernier, Executive Editor, IP Communications Magazines  |  March 01, 2011

This article originally appeared in the March 2011 issue of INTERNET TELEPHONY.

There’s a lot of focus these days on broadband mobile connections and bandwidth-loving applications like video. But, as they say, good things come in small packages. Such is the case with short messaging service.

As it turns out, SMS is the fastest growing mobile segment in the U.S. today.

“The performance of SMS over the last five years has been staggering and remains so mainly because it is cheap, easy to use, convenient, discreet and universally acceptable to some 4 billion consumers worldwide,” according to a new report by Portio Research. “During 2009 SMS continued to grow in all markets and the report confidently predicts that it will continue to do so for several more years. In 2009, worldwide SMS traffic topped 5 trillion messages, and that figure is set to exceed 10 trillion in 2013.”

Of course, SMS is just another term for texting. And while a lot of that texting is between individuals, SMS is also a great business-to-consumer tool given it’s a technology that’s well understood, widespread, and offers open rates close to 100 percent, says Pieter de Villiers, Clickatell (News - Alert) CEO. He adds that every single mobile device in the world has the ability to text, and that the average SMS gets read within four minutes.

 “Many are focused on smartphone apps, but no mobile strategy is complete without SMS as an anchor tenant,” says de Villiers. “You can’t have a mobile strategy without SMS.”

The worldwide mobile messaging industry currently is generating revenues in excess of $150 billion, and is forecast to exceed $233 billion by 2014, according to the Portio Research report.

For its part, Clickatell offers companies the ability to send SMS messages anywhere in the world via a broadband-equipped computer. The company also provides interfaces to ERP and other applications to enable SMS services to interface with such systems.

Clickatell in 2000 launched the first website for computer-to-cell-phone SMS transmissions, says de Villiers, who adds that South Africa-based Mobile Telephone Networks was the first mobile service provider that offered its subscribers the ability to do PC-to-mobile endpoint SMS. He says the per-SMS rate within the U.S. is between a penny and four cents, depending on volume.

There are many applications for SMS in the business-to-consumer realm. For example, a doctor’s office could use SMS to remind patients about their appointments. Clickatell’s de Villiers says sending patients such reminders the day of their scheduled visits can lead to savings of up to $300,000 a year. Another medical application is to send an SMS to a person every time some tries to access their health records; the SMS would provide a quick and easy way to alert the patient of the inquiry and, if the individual opts to, to approve that access, he says.

Banks, meanwhile, can leverage SMS technology to keep customers abreast of activity on their accounts. One bank in an emerging market was able to decrease credit card fraud by 43 percent via a Clickatell SMS solution, says de Villiers.

SMS also holds a lot of possibility for the transportation sector, he says. For example, airlines can use SMS to alert passengers of flight changes, and companies in the parcel transport business can use SMS to confirm delivery times of packages.

Companies and other organizations can tap SMS capabilities as part of their emergency notification plans. It’s also a nifty tool for town-hall style meetings. In fact, during a trip to Cairo and Ghana, President Obama invited people to text him questions.

Of course, SMS also ties in nicely with the idea of location-based services. A business could, for example, leverage both LBS and SMS to deliver a coupon or link to a promotion based on the mobile subscriber’s physical or online whereabouts.

However, Noah Rafalko, CEO of TSG Global Inc., says that the kind of SMS that is popular today is only the tip of the iceberg of what is possible.

TSG Global is a VoIP and SMS texting service provider that offers the web developer community, enterprises and service providers with the tools they need to enable long-code SMS applications. While Rafalko describes short-code SMS as simply a method of distribution, he says long-code supports fax, voice and SMS.

“That’s the difference we have that most companies don’t have – this real rich experience with voice,” says Rafalko. “Voice is king, and it really takes a lot of energy to do voice.”

The ability to support a variety of communications in a unified way means long-code can provide one point of contact for a business, says Bob White (News - Alert), vice president of marketing and public relations at TSG Global. For example, it could enable a call center represent to receive communications from customers via text and voice. Or a pharmacy could leverage long code to offer a special number through which users could call or text prescription refill requests and the pharmacy could send customers messages back when their prescriptions are ready. Rafalko adds that this technology also can be used to invite customers to comment about the quality of their experiences with a business; for example, a diner could offer a long-code phone number to enable diners to offer feedback easily and quickly before they leave the restaurant.

“When you look at the evolution of telecom as a whole, when you look at the long-code technology, you’re looking at the future of communications,” says Rafalko. “Short code was the beeper type of interaction to get to that process.”

Edited by Stefania Viscusi


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