Text Messaging Nirvana – A 93% Conversion Rate

Thursday, May 26, 2011
Michael Orpen

One of the big challenges inherent in text message campaigns is the traditionally low redemption or conversion rate.  With SMS it’s about reach. No other mobile medium can match it in terms of the number of people you can instantly connect with. With that said though, the goal should always be about trying to match quantity with quality. That’s not always easy – historically, SMS has been seen as spam ported to your mobile phone. The big advantage in this case (and a contributing factor to the results) was the delivery mechanism: the minute consumers engage with you through their mobile, marketers have the ability to instantly communicate back and send through an offer. Instant gratification.

I read a great SMS/retail integration success story on Mobile Marketer today. Men’s warehouse chain K&G Fashion Superstore is recording a 93% conversion rate from a recently launched SMS campaign. The result? In record time, through their 101 stores across the US K&G was able to build an opt-in database of mobile customers that eclipsed 80,000.

Through in-store signage, customers were encouraged to text a keyword to a short code in order to receive a $5 off coupon on anything in the store, valid for that day only. The consumer is then sent a unique code (reduces fraud potential) that is scanned at the point of purchase and the offer is redeemed. In return, opt-in consumers agreed to receive 4 K&G-sponsored messages through their mobile each month.

For the initial in-store effort, the average purchase was around $70. This is the same for customers not actually participating in the program. The net takeaway? Mobile shoppers are taking an incremental $5 to the checkout.

There are currently more than 80,000 customers signed up, with approximately 6,000 new customers being added each and every week.

Why it worked

  • K&G core customers are African American men aged 25 – 54. This group is also big mobile phone users.
  • The offer was provided in-store where purchase intent was high. Making the offer only valid for that day also increased the urgency to redeem.
  • K&G had recently upgraded their point of purchase system to include mobile device scanning.

Text messaging campaigns can generate very positive results. It just takes an in-depth understanding of your customers and the media they consume, and then leveraging that information with the environment in which the offer is served and redeemed.