SMS and customer relationships

Alfie Ladeira, Product Manager for HP Exstream explains why SMS messaging is a game changer in the future of customer communications software and why it is key to ensuring profit margins are maintained

Faced with an increasingly challenging market, businesses including utilities companies, banks and telecommunication organisations are coming up with innovative ways such as communicating via SMS to ensure customer satisfaction and maintain customer retention. Historically consumers have been reluctant to change either their energy service provider or their bank account. On average only 8% of people switch their current account per annum and you are more likely to get divorced than you are to switch your utilities service provider.

However, this is all set to change, with the challenging economic climate consumers are for the first time ever willing to shop around to ensure they get the best deal. Added to this, the recent changes in RDR regulations (Retail Distribution Review) means that financial organisations of all sizes now need to ensure they have rigorous document and financial processes in place. We’ve had SMS messaging integrated in the customer communications management (CCM) systems we offer for several years, but in the past two years there has been a dramatic increase in the number of consumers demanding communication via SMS.

Some service providers are pursuing increasingly drastic methods to win over new customers and encouraging them to switch. One Irish energy company even offered cash back incentives to inspire customers to sign up to their service.

In March, Sprint and Cisco created a unified communications platform, which allowed customers to manage their data through the Cloud. This service enabled management of accounts through integrated messaging and enhanced mobile integration. However, although this can seem quite complex there are a few simple things which service providers can do to build customer relationships and ensure long term customer loyalty. This can be as simple as operating an effective customer communications strategy through preferred communication methods such as SMS, email and mobile applications.

Consumers and employees are now more mobile than ever and expect communication directly to their tablet or mobile device. This means that multi platform communication is now an essential tool for companies aiming to reach a high level of customer satisfaction.

According to a 2011 survey by Ovum a record 7.5 trillion SMS messages were sent that year and between January and October smartphone usage rose from 30% to 45% of the population. The use of mobile is a key change in the way we communicate. This has meant consumers are demanding access to their information, including bank statements and bills across multiple mobile channels.

As a result, every industry needs to design their communications platform to contact customers across a variety of channels and formats, including SMS messaging. We’re seeing SMS messaging benefiting customers when they’re in the form of vital alerts, for instance banks might use CCM if a consumer was on the verge of their overdraft, or for utilities companies SMS updates can provide pre-emptive information, for instance if there was an upcoming power outage planned. Companies also implement CCM in the form of links via SMS when an invoice or a statement has become available on their personal portal, most customers are then able to instantly access this information using their smartphones.

I remember when people started to use SMS instead of talking on the phone and many in the mobile phone industry were surprised at how popular it became. If used in the right way, SMS communication can be an ideal way to reach consumers and ensure a concise and important message is read or directs them to account information that is now available for them to access.

From SMS to mobile cloud – maintaining quality and customer loyalty

Terry McCabe, CTO at Mavenir Systems suggests the mobile cloud is vital for those wishing to retain customers. According to Ofcom’s Communications Market Report, the average British adult now sends 200 texts per month, more than double from four years ago. 2012 is a tipping point for rich communications and Ofcom’s report is evidence of today’s digital world that we are immersed in as consumers.

Unsurprisingly, the report revealed that more than half (58 per cent) of adults now say they use text messages at least once a day to communicate with family and friends, while more surprisingly only 49 per cent meet people face-to face on such a regular basis.

From the report, it is clear that SMS has transformed the way we communicate and has become ingrained in both our personal and corporate life. This October, we’ll be celebrating 20 years of SMS and it really is staggering to see how far texting has come since the first SMS was sent by mobile messaging company, Airwide Solutions [now part of Mavenir Systems]. Making history, the company had the first commercially deployed SMS system and delivered the first message by a commercially deployed SMS platform. The flexibility and convenience that texting offers users suits the fast paced world that we now live in and sophisticated technology coupled with improved networks has meant that our desire for rich and more stimulating media is insatiable.

With generations of people growing up with technology at their fingertips from an early age, people are comfortable sharing rich media on the move as well as engaging with people using social media via their mobile devices. This increase in demand is obviously aided by the variety of new smartphones now available, which have the capability to handle a host of rich communication services and the significant rise in over the top (OTT) providers offering innovative services which have, added significant traffic to operator networks and impacting their revenues substantially.

So why has there been such a shift in the way we communicate? Undeniably, the major advancements in technologies have create extraordinary quality of communications services today and we can enjoy a number of the qualities that meeting face to face can offer such as seeing a person’s facial expression in real time on a mobile screen almost anytime. In particular, the mobile cloud has taken what was once seen as the impossible and making it part of everyday interaction. Today, consumers can join a HD video call from a café using a free wi-fi network, discuss and make business decisions using an app-to-app messaging service and purchase a sandwich using their smartphone.

The success of such technologies has been due to the high quality of service that they deliver; in many cases exceeding consumer expectations. The future success of rich communication services will be no different and will rely heavily on scalable and flexible networks, placing those operators using mobile cloud to deliver quality rich communication services in the driving seat.

With Ofcom’s Communications Market Report revealing that forty-seven per cent of people speak to close ones on a mobile phone every day, and 33 per cent communicate daily via social networking, the market opportunity for operators to capitalise on the demand for rich communications is massive. The real challenge for operators now will be exploiting mobile cloud technologies to provide consumers with a communications experience that is seamless and more reliable than OTT services to in effect, keep them loyal to carrier branded services and key network assets.

OTT pressure not major threat to SMS

By James Middleton
There will not be a uniform decline in mobile operators’ SMS traffic and revenues

While traditional SMS revenues are under pressure from rich messaging apps such as WhatsApp, iMessage and others, mobile operators will still generate a total of $722.7bn in revenues from SMS between 2011 and 2016, according to research released this week.

According to research house Informa Telecoms & Media, there will not be a uniform decline in mobile operators’ SMS traffic and revenues as a result of the adoption and use of over-the-top messaging services.

Pamela Clark-Dickson, senior analyst for Mobile Content & Applications, at Informa, instead believes, “Factors such as the operators’ pricing strategies, and the penetration of smartphones and mobile broadband in a market will determine how quickly and to what extent substitution occurs.

“For example, operators offering integrated tariffs that include a balanced proportion of voice, SMS and mobile data, are continuing to see growth in their SMS traffic and less impact on their SMS revenues.”

While Informa is forecasting either slowing growth or even a small decline in person-to-person SMS revenues in some developed regions and countries, total global SMS revenues will increase at a compound annual growth rate of three per cent over the next five years. Western Europe will generate the highest amount of SMS revenues globally between 2011 and 2016, totalling $174.1bn, followed by Asia Pacific’s developing markets, where SMS revenues will total $173.8bn between 2011 and 2016.

Globally, Informa forecasts that SMS traffic will total 9.4 trillion messages by 2016, up from 5.9 trillion messages in 2011. However, SMS’s share of global mobile messaging traffic will fall from 64.1 per cent in 2011, to 42.1 per cent in 2016. At the same time, global mobile instant messaging traffic will increase from 1.6 trillion messages in 2011 to 7.7 trillion messages in 2016, doubling its share of global messaging traffic from 17.1 per cent in 2011 to 34.6 per cent in 2016.

Informa also forecasts that, by 2016, mobile operators globally will still be generating a higher proportion of revenues from mobile IM than the third-party providers of OTT messaging services will, at $8.7bn or 54 per cent of total IM service revenues. However, the OTT messaging service providers’ share of IM revenues will climb from 37 per cent of total revenues in 2011, to $7.4bn or 46 per cent of total revenues in 2016.

MMS remains a lucrative service for mobile operators, punching above its weight in terms of revenues. While global MMS traffic is expected to represent just 1.7 per cent of global messaging traffic in 2016, at 387.5 billion events, global MMS revenues will represent 10.6 per cent of global messaging revenues within the same timeframe, at $20.7bn.

However, mobile email will be the second highest-revenue generator for mobile operators by 2016, generating $32bn in revenues, or 16.3 per cent of total global messaging revenues. “Mobile email is an important revenue-generating service for mobile operators, largely because they offer it as a service bundled with a mobile data plan,” said Clark-Dickson. In addition to Research in Motion’s BlackBerry services, mobile operators also generate revenues from their own-brand mobile email services and from offering data plans that are specifically tied to mobile email services that their subscribers can independently access on their devices.

SMS Spam, Smishing, and Fraud

SMS Spam, Smishing, and Fraud

Mary Landesman, Senior Security Researcher at Cloudmark looks at the phenomenon of smishing.

With over 6 billion subscribers across the globe, it’s no wonder attackers are turning their attention to the mobile market. SMS messaging proves particularly attractive, with open rates in excess of 90% within 15 minutes of receipt, compared to email with only a 20-25% open rate and an average 24 hour wait before being read.

There are many reasons mobile users respond so quickly to SMS messages, but chief among these is always-on access to the devices. BYOD (Bring Your Own Device) isn’t just a workplace phenomenon; subscribers pack their mobile devices wherever they go. And while phone calls may be noisy and disruptive, SMS texting is quiet and discreet.

This always-on and immediately responsive environment is a benefit to attackers who often use compelling pitches to invoke a sense of urgency or exploit a recipient’s need for instant gratification. Unlike email, however, mobile scammers pay close attention to their markets with SMS message texts that are typically highly pertinent to local events. Within the UK, this hyper-targeting can be witnessed by the tremendous surge of PPI compensation scams that arose after courts ruled personal property insurance had been miss-sold and consumers were entitled to file claims. Such scams typically entice victims into sending upfront ‘processing’ fees, or what’s known as advance-fee fraud.

As costly and frustrating as advance-fee fraud can be, it pales in comparison to an attack that wipes out one’s bank account or results in other long-term financial disruption. Ninety-two percent of all SMS spam is, on average, related to fraud. One particularly concerning category, smishing exploits users’ trust, tricking them into divulging personal details or enter into hidden terms of agreement that have costly ramifications. Unlike its email counterpart, phishing – which represents about 1% of all email spam – smishing represents as much as 33% of all SMS spam.

Subscribers who already receive legitimate SMS text messages from their financial institution may be more at risk simply because they already expect to receive texts from their bank. And since they expect it, they may be more likely to believe even fraudulent texts that spoof their real bank.

As with email, it pays to be suspicious. Just because you have a relationship with the bank mentioned in the text, it doesn’t mean the text actually came from the real bank. Indeed it is exactly this assumption that scammers are banking on, pun intended. A good rule of thumb is to never follow a link in an SMS text message received unexpectedly or one that claims to be from a financial institution. Further, don’t be fooled by instructions to text a short code or other number with a response to such an SMS; these are often ploys to trick you into dialling or texting premium rate numbers.

Fortunately, victims of SMS spam, including victims of smishing attacks, are not without recourse.

To take action against scammers, forward the mobile spam to short code 7726 (S-P-A-M on traditional keypads). Subscribers in France should use 33700 (des00) instead. Forwarding the spam notifies your mobile operator which in turn enables them to take the appropriate action – including protecting other subscribers from the scam and identifying the perpetrators of the scam. The SMS Spam Reporting Service (SRS) is a joint effort by Cloudmark and the GSMA, in cooperation with mobile network providers, to put a stop to mobile messaging abuse.

Consumers prefer SMS marketing over mobile web, survey reveals

SMS is the most popular medium for mobile marketing promotions, a new survey has revealed.

Research carried out by the Direct Marketing Association (DMA) has showed that in the UK, France and Germany more customers prefer to receive SMS promotions than any other type, including mobile web marketing.

In the UK 38 per cent of mobile phone owners would prefer to receive promotional offers via SMS while just 15 per cent said they would favour mobile web.

In France 60 per cent said they would be in favour of SMS, while in Germany the figure was 58 per cent.

The findings have been published by the DMA in its latest report, ‘Promoting the Mobile Consumer’. They were based on extensive research carried out by Toluna QuickSurveys, in which 4,400 mobile phone users in Europe’s three largest economies were asked about their consumer habits.

DMA Mobile Marketing Council chair Mark Brill said: “The mobile channel is not a homogenous market in the EU. Clearly, a ‘one size fits all’ approach cannot be used across different territories.

“Even within the same country, acceptable practices will differ depending on the demographics or products. The key to acceptable mobile marketing is to understand the target audience’s preferences to ensure they engage with consumers in the way they want to be contacted.

“Taking this considered approach must be at the heart of mobile marketing best practice.”