How many unread SMSs do you have on your phone right now? 100? 500? 1000?
An average user has more than 500 unread SMSs on their mobile phones at any given point of time. Doesn’t the number speak volumes about the relevance of SMS marketing today?
Personally, I only open SMSs either when I have to check for a payment update or when I have to share an OTP. I absolutely hate it when my phone buzzes in the middle of a workday & it ends up being a marketing SMS.
However, customer perception is not the only problem with SMS Marketing. The regulations by TRAI make it even more difficult for marketers to reach out to their customers through SMS.
Gone are the days when SMS was the Holy Grail for marketers.
Why SMS Marketing is no longer relevant today?
SMS marketing started in the early 2000s in India. At that time a marketing SMS used to cost 1 paisa. But then like any marketing channel that starts working, everyone wanted to get on it & SMS communications started growing from bank notifications to real estate spam.
To curtail the growth of spam, TRAI increased the prices of an SMS ~10x in the early 2010s. When that didn’t work TRAI again hiked prices in May 2018. But that didn’t stop marketers from bombarding customers with SMS either, so finally in 2020 TRAI introduced DLT, a blockchain technology to prevent misuse of SMS. On top of that, TRAI just increased SMS costs by 2.5paisa too, which will further increase the cost of an SMS by 25% to 30%.
But it’s not just TRAI that’s moving in that direction. It’s the apps on your phone too. Just like Google introduced the promotions tab that reduced email open rates, SMS apps on our phones today are hiding SMS in a secondary tab. On top of that, the SMS apps are making it easier than ever before to report spam for an SMS.
As the algorithms on these SMS apps get stronger, ultimately we’ll stop getting notified for promotional SMS completely. We might hate this trend because we’ve been so reliant on SMS for so many years for our CRM marketing, but marketers need to update themselves with this change & move to other digital channels where their customers are present.
TRAI Regulations that make SMS an undesirable channel for Marketers:
👮🏻♂️ Heavy Scrutiny on SMS Content: With the new TRAI regulations in effect, it will become harder for brands to send promotional messages as brands will be needed to get every SMS sent verified with TRAI authorities.
🤖 Template Based Messaging & Segregation: Every brand will be allowed to send only 4 types of SMSs. Of which, customers can then control the type of messages they want to receive.
🛑 Blocking of Promotional Messages: New TRAI regulations and widespread usage of smartphones that move promotional messages away from the customer’s view will make it harder for you to reach customers. As most of the messages you send will come up as SPAM, just like in the Truecaller app.
🔻 Delivery Rates & Sales will Go Down: Owing to the new regulations, most of the brand SMSs will be delivered to the promotions tab, just like in Gmail. Resulting in a steep decline of the SMS campaign delivery rate making it harder for brands to generate sales.
💰 20% - 30% increase in SMS Marketing Budgets costing: SMS costs have increased by 2.5 paisa/per SMS, which is going to increase your SMS marketing budget substantially and reduce your marketing ROI.
What made Chumbak move away from SMS Marketing?
Just like every other brand, Chumbak too was facing issues with getting its SMS templates approved because of the heavy scrutiny on SMS content passed on by TRAI. The new regulations made it impossible for them to get their promotional SMSs
It came to this point that Chumbak was not able to get even a single SMS approved. Therefore, they finally decided to go live with their campaign without the use of SMS.
The team definitely had doubts in their mind but it only made sense to finally ditch the traditional means fully & go all in with digital.
Chumbak decided to run the following campaigns across digital channels without the use of SMS:
1. Campaign based on customer’s preferred product category
Chumbak segmented their customers based on their previous purchases which helped them analyze the likings & preferences of each of their individual customers. On top of this, they used AI-algorithm to cross-sell the next best product that the customer was most likely to invest in.
For example: A customer whose last purchase was either a sofa or a dining was most likely to shop for cushions, and hence they were targeted with ads promoting cushions.
2. Campaigns targeting dormant customers
To reactivate their dormant customers who haven’t made a purchase from the last 3 years, Chumbak reached out to them with some of their best-selling products from each of their product category.
The usage of multiple product categories increased the chances of the dormant customers to make a purchase again in their preferred product category.
3. End of season sale campaign using persona-based targetting
Chumbak targeted its customer base by creating various segments based on their favorite category, sub-category, and discount personas. On top of this, Xeno’s AI algorithm targeted the customers who were most probable to shop from the On Sale categories based on their customer persona! This ensured that each campaign was personalized & targeted to every specific individual.
During this month, Chumbak ran 11 unique campaigns across Instagram, Facebook & email generating an incremental revenue of 21%.
If you'll take one takeaway from this article, it should be that SMS Marketing is never going to be the same again.
Post-Covid, customers have moved to digital and are definitely not coming back. Customers are now spending up to 9 hrs a day on their mobile devices today and every single customer is flocking to these apps. To adapt to this transformation and maximize revenue from your customer base, your CRM program must move with the customers of today