Unlike other marketing methods SMS marketing system is laced by an evaluation tool that helps retailers assess returns on investment for an SMS campaign. Retailers are using it to update customers about new discount offers launched, and new stock arrivals. So what is it that has made SMS marketing method a hit among the retailers? Is it the telecom boom? Or is it the low investment required? To know this we met up with Vishal Manchala, Director and CEO, Vast Technologies Pvt. Ltd, who has provided SMS marketing solutions to a large number of retailers.
Vrinda Oberai (VO): Unlike before, retailers are leveraging SMS marketing more and more to attract customers. What is your take on the same?
Vishal Manchala (VM): Wireless communication has become a powerful medium to reach billions of people in seconds. India has set the example of being the country where SMS revolution happened in a very short time and where mobile has become an important part of common man’s life. Short Message Service is the best medium of communication where you don’t need to talk, but can still communicate in an effective way. It is cost and time effective solution for many complex problems and this market is expected to grow in proportion to the telecom growth.
A small ad in a leading news paper will cost you Rs 50,000 or more but with bulk SMS you can reach lakhs of people in less than half of the above cost and it will have more impact as it will fetch personal attention than other media ads. Moreover, SMS can be sent exactly to your targeted audience, who can be your potential customers which means cutting the wastage of cost.
Lately, realising these benefits most retailers are employing the technique to attract customers.
VO: What kind of investment is required to carry out one such exercise? What are the advantages of SMS marketing vis-à-vis conventional methods like TV and print advertising?
VM: Investment is completely dependent on the capacity of the retailer and how large is the target audience. It can start from Rs 500 and go on to Rs 5 crore. We have clients, who started with Rs 2000 pm and their monthly expenses for the same are now around Rs 15000 pm. The best part of the SMS campaign is that you would be able to evaluate the response on particular add, which means calculation of ROI is very easy, which cannot be so easy with newspaper or television-ads. The business house in context can accordingly decide upon the budget.
VO: How is the response from the customers?
VM: Nowadays customers are willing to be updated with what is happening and they are keen to know whenever any special offer or promotional campaign goes on. Some people are willing to register themselves with retail outlets as this feature increases the interactivity of customers with corporate.
VO: How do you gauge the ROI from such exercises? Do you engage a third party/agency?
VM: Surprisingly, the system completely comes with an evaluation tool. Most of the Bulk SMS service providers are providing the tools to evaluate the response of SMS.
For evaluating ROI one just needs to contact the SMS service provider. There is no need to approach third party/agency to gauge the response.
VO: How does the whole process work? Do you sign a contract on a yearly basis or is it event based (whenever an event takes place, you shoot the SMSs)?
VM: The advantage of SMS marketing is that one can spend as much as one wishes to. The cost will be on SMS basis, for example, if you want to push SMS on 10,000 SMS you will have to pay for 10,000 SMS etc. If you want to push the limit to 1 lakh SMS, you have to pay for 1 lakh SMS and so on.
Per SMS cost might vary depending on volume of purchase. The costing also depends on how you want to make the campaign that is whether you want the service provider to do the campaign for you or you want to do it on your own. In case you want to do your own campaign, the service provider will facilitate you with the required tools.
VO: Tell us about your retail clients who have benefited via your services? Share a case study.
VM: We have the following clients from the retail industry – Kidzee, Wills Lifestyle, TITAN Eye plus and Koutons.
Case Study: Kidzee
Kidzee is a retail chain of pre-schools. Kidzee school of Malviya Nagar, Delhi had approached us for their marketing requirement. It was a newly started branch and their prime concern was to bring awareness among the parents of Malviya Nagar and also to fill up the seats in school.
We had taken out the data of Malviya Nagar and Saket, which had around 1 lakh entries and made SMS campaign on it. Though they were promoting the school through many other mediums, they had given a separate contact numbers in the SMS that was sent to evaluate the ROI. Enquiries were around 380 and the conversion was of 28 students. The cost that was spent for the campaign was just Rs 12000. Now, Kidzee is also using SMS to alert the parents about various happenings at school, and wish them for festivals and other personal vocations etc. Kidzee also has shown interest to spend more money for promotions. They say that the parents are well informed about their children, and parents feel comfortable with school as they keep informing about the child’s performance via SMS.
VO: How much, on an average are the footfalls affected when a retailer indulges in SMS marketing?
VM: We have Koutons, Wills Lifestyle, which majorly use SMS to update customers about fresh stock arrivals and new/special discount offers. Whenever they make a campaign of these announcements, they see at least 25-65 per cent growth in footfall, which also depends on the nature of the offer. They say that the only way we can inform our customers about discount offers and arrivals is through SMS.
VO: Do you have plans to introduce any new service for the benefit of retailers?
VM: There are no plans for new service in the short term, however we keep striving to innovate, customise the service according to the requirement of the customers. Now we are planning to introduce voice calls (pre recorded automated voice) in place of SMS to announce about special discounts, offers customers, which will be more effective than SMS.
VO: Do the established brands form an equivalent customer category for you as the comparatively new/upcoming brands?
VM: We have majority client-base from established brands. When we approached new brands they were choosy and were not so interested to invest in SMS based campaigns as they were looking it as an experiment for promotion, whereas established brands are continuously spending fixed amounts or percentage on it.
VO: What kind of budget do the retailers allocate to SMS marketing?
VM: The budget of retailers completely depends on the targeted audience and the objectives of the campaign. Usually they come up with their objective and the kind of response that they are looking for; accordingly we suggest the budget based on previous stats in the same industry. After two or three campaigns, depending on the response, they keep a fixed budget per month. Usually it would be around 25-70 per cent of their marketing expenses.
VO: Is it always the brands that retail through EBOs that approach you or brands that sell through multi-brand outlets, also go in for SMS marketing?
VM: Brands which sell through multi brand outlets also opt for SMS marketing, whose response is captured through short code and forwarded to the respective franchisee. These days a new trend has come up, mall owners are promoting the retail stores in their malls through SMS campaign to reach out to the locals.