The following is a guest post by Derek Johnson, Founder & CEO of text message marketing provider Tatango. You can text him at (206) 334-4012 or email him at email@example.com.
You heard me right, SMS marketing just isn’t practical for small businesses (1-50 employees). I know this sounds completely crazy coming from one of the biggest advocates in our industry during the last six years for small businesses using SMS marketing, but it’s true, and it pains me to admit it. It’s a pretty humbling thing to be proven wrong after six years, especially when everything I’ve done during the last six years has in some way tried to make text message marketing a reality for small businesses. The truth is, after six years of trying, I’m giving up, and have conceded to the fact that text message marketing wasn’t, isn’t and most likely won’t ever be practical for small businesses.
Now before you go scrolling down into the comments below and tell me about XYZ company, which is a small business that had a runaway success with their text messaging campaign, let me be clear that I’m talking about the majority of small businesses, not all small businesses. Yes, we’ve worked with hundreds of small businesses at Tatango that have run successful text messaging campaigns, but the truth of the matter is that those successes are the minority for our small business clients. Let me explain why this is with my top four reasons why text message marketing for small businesses just isn’t practical.
- There has to be a marketing budget, on top of the budget for SMS marketing. If you’ve ever launched an SMS marketing campaign, you’ll know that if you build it, most likely they won’t come, or at least they won’t come until you start advertising and promoting the new campaign. The problem for small businesses (between 2-10 employees), is that the majority of them (65%) don’t ever spend more than $1,000 per year, and 40% of them spend somewhere between $0 and $499 per year. See Vistaprint’s Small Business Survey. If the majority of a small businesses marketing budget is spent on just the SMS marketing software, there’s hardly any budget left behind to advertise and promote the campaign. Without being able to advertise or promote the SMS campaign, the small business owner is unable to build a large enough subscriber database to see any meaningful results from SMS marketing, making it useless.
- The rules and regulations surrounding text message marketing have become too complicated. While the TCPA is pretty clear regarding what is required to send a text message to a customer, the CTIA has made it near impossible for any small business to run an SMS campaign that complies with all of their rules and regulations. I’m serious; does the CTIA expect a small business owner to review their 12 page CSC Monitoring Compliance Handbook, which gets updated every year, then take all that information and execute a compliant SMS campaign? If a small business owner actually read, comprehended and then implemented an SMS campaign that complied with the CTIA rules and regulations on their own, I’d be so surprised that I most likely would hire that person on the spot to come work at Tatango, as it would be that rare.
- 90% of SMS marketing success is due to a well-planned strategy. Over the years at Tatango we’ve tried to help businesses create their own SMS marketing strategies by providing them with free guides, videos, etc. but lets be honest, that’s just not enough to launch and manage a successful SMS campaign. The worst part is that even if we wanted to spend the needed time to help small businesses develop a well planned SMS marketing strategy, the economics when a small business is paying an SMS marketing provider $49/month just doesn’t make sense.
- You can’t track what you can’t measure. Lets face it, most small businesses don’t have the point of sale technology, or aren’t willing to pony up for the software needed to integrate their point of sale system with an SMS provider. This means that most small businesses are flying blind when it comes to measuring the performance of their SMS campaign. This means most small businesses have almost no knowledge as to the amount of redemptions each campaign generates, the revenue, the cost of goods sold, profit margins, or even methods to prevent coupon code fraud. I think any marketing expert would agree that if half a businesses marketing budget is going toward one marketing channel, you better damn well be able to track the performance of that channel. With small businesses and text message marketing, this just isn’t a reality.
What do you think, has small marketing budgets, complex rules and regulation, lack of time and resources to plan a well thought out strategy and limited, or even outdated point of sale technology made SMS marketing just impractical for small business? Let me know your thoughts regarding this topic in the comments below.