Nevermind The Future: Text Is Now!

Editor’s note: The following is a guest post from Jared Reitzin, CEO and founder of mobileStorm.

When I started mobileStorm in 1999, it was hard to get businesses to pay for text messages. Back then, we’d developed one of the first mobile marketing platforms in the music industry for the largest label in the world, which sold 11% of all music worldwide. It was a great first customer to have.

We developed our text component to deliver via SMTP (like an email). This way we could charge for the use of our platform and services, but our client did not have to pay a per-message fee. SMTP worked OK for a little while, but it started to have increasingly more issues. Sometimes the messages would show up 24 to 48 hours later; somtimes they never showed up at all. Eventually the carriers started blocking bulk SMTP sends (read this post about why SMS spam will never be as prolific as email spam). On top of that, each carrier would show the text message coming from different numbers. On Cingular it would show up as binary code: “100100010100.” Definitely no way to respond.

Yeah,  SMTP was only good for one-way messaging, which is fine for alert-based stuff. But as the market matured, labels wanted interaction. I would say it was about five  years ago when companies started to realize the value of SMS and didn’t mind paying for it. Back then we were charging about $.10 per SMS message, even at higher volumes. Of course businesses did not have large databases back then, so it was not costing an arm and a leg for each campaign. Meanwhile the cost to send an email was about 50 times less expensive–so a lot of people only focused on this channel.

Flash forward nine years: It’s amazing how many businesses integrating SMS into their digital marketing strategy. Email has always been a large revenue generator for us, but in the last two years it has amazed me to see how many of our deals are mobile marketing-related. Last month alone, among new business orders, mobile services beat out email services. I was pretty taken back to hear Exact Target’s slogan saying “Text is Next”. Text was next nine years ago!Â

mobileStorm deals with companies of all sizes (from Hardee’s to Jeff’s Taco Shop) and I can tell you that a lot of small-to-medium-sized businesses are really starting to collect cell phone numbers and send marketing messages. The biggest hurdles with these SMBs is education and helping our clients to understand best practices.

Some companies look at SMS like they do email. But these are two very different channels, and people need to understand when and how to use them. Following the Mobile Marketing Association’s best practice guidelines is a good the foundation, but each industry is different; their customers have different thresholds and it’s important to really understand your customer before you jump into mobile. The truly great SMS marketing providers offer more than just a platform to manage SMS campaigns–they help educate and even offer strategic consulting. That’s very important when the cost of the message for a subscriber can be up to $.20 for each.

Think about this: 95 percent of cell phones in America currently have SMS capabilities. According the CTIA, there are 262.7 million cell phone subscribers. That is about 84% of the U.S. population. So if you do the math, 249 million or roughly 80% of U.S. residents can be reached via text messaging. That is astonishing! I think it is safe to say that there are less individual email addresses than phone numbers that can receive text messages.

According to Return Path, 33 percent of email addresses change on a yearly basis. How many times have you changed your cell phone number in the past one, two, or even five years? Increasingly more people are getting rid of their home phones (including me) in favor of having just their cell phone. I don’t know the churn rates on cell phone numbers, but I imagine a big percentage of users are going to keep their number for life. That 10-digit number is basically your customer static IP address.

Text is next? Text is now!

Jared Reitzin is the CEO of mobileStorm Inc., a leading mobile and email marketing company providing technology and services for almost a decade. mobileStorm services thousands of customers include American Idol, MGM Grand, Carl’s Jr. Quantas Airlines and Ashley Furniture Homestore. He also writes about small business entrepreneurship on his popular blog