SMS Retail Industry
Building Customer Loyalty &
Increasing Operational Efficiency
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TalariaX™ | sendQuick® | Whitepaper
Contents
Introduction
Customer Loyalty & Retention is Key in a Highly Competitive Environment
SMS as a Communication Tool to Connect with Customers & Build Loyalty
SMS for Customer Intelligence & Feedback
SMS for Marketing & Promotional Campaigns
SMS for Customer Service
SMS for Logistics & Delivery
SMS an Enabler to Improve Sales Operations
SMS for Enterprise IT System Notifications
sendQuick SMS Solution for the Retail Industry
Technical Overview
Return of Investment (ROI) Computation
Conclusion
A Customer’s Successful Experience
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TalariaX™ | sendQuick® | Whitepaper
pg 3
INTRODUCTION
CUSTOMER LOYALTY & RETENTION IS KEY IN A
HIGHLY COMPETITIVE ENVIRONMENT
The last decade has seen sweeping changes to the
retail industry. Technology and the internet has
introduced new competition as hundreds of new
online stores enter the global marketplace daily.
Consumer demands and expectations of the
shopping experience have increased. Consumer
tastes and buying decisions have also become more
sophisticated as buyers now have access to a vast
array of shopping information, channels and
alternatives.
In a nutshell, the shopping environment has
changed. The retailer needs to constantly
differentiate and be a step ahead in fighting for the
customer’s wallet and in retaining customer loyalty.
The high performance will be those who can not
only provide a superior combination of offerings
and prices, but also deliver a superior buying
experience and customer service.
SMS AS A COMMUNICATION TOOL TO CONNECT
WITH CUSTOMERS & BUILD LOYALTY
The mobile phone has become the most dominant
device for many consumers globally. In 2010,
mobile phone vendors shipped a total of 1.39
billion units worldwide, representing 18.5% growth
from 2009. Furthermore, countries such as
Singapore, Hong Kong, Taiwan, have mobile
penetration rates of more than 100%. This presents
a new opportunity to use the mobile phone and
SMS as a communication platform to reach
customers, build customer relationships and sales.
SMS (Short Message Service or otherwise known as
text messages) are found on all mobile phones
across all technologies, including GSM, CDMA and
3G. The key advantages of SMS communication are
as follows:
• Wide reach as it is a default service for all phone
users and not handset dependent.
• Higher likelihood of being read as compared to
emails.
• Low cost medium (some providers offer it free)
while most cost less than a normal voice call.
• Instant delivery and always available (as phone is
always on).
• Enables delivery of short (160 characters),
focused messages that better captures attention.
Current improvements also allow a few SMSes to
be read and delivered as a single message (known
as concantenated SMS).
• Messages are delivered across networks (roaming
capability).
• Good interoperability between networks and
technologies (GSM and CDMA).
For the consumer, the advantages of SMS
marketing are:
• Free for customers (sender pays, recipient FOC)
1 IDC, January 2011
• Personal
• Non-intrusive in nature
The following section outlines how SMS can be
used to connect and build relationships with
customers pre-sale, during the sale and post sale,
as well as support internal retail operations.
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TalariaX™ | sendQuick® | Whitepaper
pg 4
SMS FOR CUSTOMER INTELLIGENCE & FEEDBACK
Keeping a constant pulse on customer needs and
preferences is key to the success of any retailer.
Understanding what customers want helps retailers
fine tune their products and services to better meet
their demands, thereby enabling retailers to
achieve higher sales.
It is also important for retailers to focus on
delivering good post-sales support, without which a
retailer cannot build customer loyalty and repeat
purchases. Hence, gathering regular feedback on
customer service is critical.
With its instant delivery, high readership and
response rates, SMS is one of the most convenient
and low cost methods for deploying SMS surveys to
a large group of customers to gather intelligence
and feedback.
Some ways SMS can be used to gain consumer
insight and improve customer service:
• SMS every new customer to rate his/her feedback
on the prodcut purchased or service experience
• SMS to testbed customers’ response or
preference on new product models or new ideas
through text and vote.
• SMS customers calling into the call center to rank
the level of customer support. As SMS responses
tend to be immediate, this allows retailers to
follow up promptly to address any negative
responses received.
SMS FOR MARKETING
CAMPAIGNS
&
PROMOTIONAL
SMS marketing and promotion is an effective tool
for promoting products, services, or to increase
brand awareness in the market, for the following
reasons:
• Cost effective (mail cost about S$1.00 compared
to SMS cost of S$0.05)
• Instant interaction with a large audience at a
relatively low cost.
• Flexibility to do targeted marketing to a niche
segment of the business.
• Personal and direct form of advertising that tells
customers what they need to know.
• Environmentally friendly compared to brochures
or flyers.
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In addition, the emergence of smart phones in the
market has opened up an exciting way of engaging
with customers. Messaging can now be interacted
with internet browsing as SMS marketing can be
combined with the internet.
Some possible SMS marketing campaigns:
• SMS customers of new products and services
• SMS customers of offers and promotions. This
could be deployed across a broad group of
customers or exclusively to a select group of
repeat customers as a loyalty program.
• SMS coupons via SMS and get customers to show
you the coupon upon arriving at the store to
enjoy the discount, or they can enter a coupon
code online to redeem special privileges.
• Combine SMS marketing with location based
marketing. When customers are near the store,
they will be sent an SMS message. This can be in
the form of coupons or time sensitive offers
redeemable at the store or even store maps and d
irections. In engaging SMS marketing activities
retailers need to be mindful to incorporate opt-in
or permission based features to allow customers
to opt-in to receive SMS messages or opt-out at
any time.
SMS FOR CUSTOMER SERVICE
The advantage of using SMS for customer service is
that customers can use this channel anytime and
anywhere. For retailers, SMS is a low cost
alternative to provide a personalised service.
Some examples:
• Customers can send SMS to make or change
appointments (e.g. at a spa).
• Customers can send SMS to check account status
information. This can be used in conjunction with
a loyalty based program e.g. where customers
can check on their outstanding loyalty points and
redemption privileges.
• SMS customers when items purchased are ready
for collection.
• Complement call centres by allowing customers
to receive information by SMS. This frees up phone
resources to support more customers.
TalariaX™ | sendQuick® | Whitepaper
pg 5
SMS FOR LOGISTICS & DELIVERY
Using SMS in logistics and delivery is not only a tool
to establish a personalised customer service, it can
be a tool to help improve operational efficiency.
Some examples:
• SMS customers to remind them of item delivery
date and time, and using 2-way SMS to allow
customers to respond by confirming or changing
delivery date and address. This reduces the
incidence of failed deliveries and its associated
costs.
• Delivery staff to use SMS to log status of deliveries
which can be updated into CRM/call centre system
to provide real-time updates.
• Delivery staff to use SMS to log in working hours
e.g. for computation of overtime pay etc.
SMS AN ENABLER
OPERATIONS
TO
IMPROVE
SALES
Not only is SMS a powerful tool for communicating
and engaging with the customer, SMS can also be
used to improve sales operations.
Some examples:
• Mobile sales staff can send SMS to instantly
retrieve sales-related information such as pricing,
schedules, stock availability etc.
• As a management tool, management can send
SMS (to a retail POS system) to obtain updates on
each store’s daily retail sales.
SMS FOR ENTERPRISE IT SYSTEM NOTIFICATIONS
At the heart of all enterprises is a reliable IT and
network infrastructure. Network and systems
availability is a critical function for any enterprise,
from delivering internal corporate services to call
centre operations, supply chain management etc.
The IT support team needs to be informed
immediately when there are critical events
affecting the IT network and systems infrastructure.
SENDQUICK SMS SOLUTION FOR THE RETAIL
INDUSTRY
sendQuick SMS gateway is an appliance based
solution for businesses. sendQuick supports
multiple types of configuration, from single server
to RAID and High Availability (HA) infrastructure to
ensure continuous SMS service availability to
customers.
sendQuick has the following features to support
retail operations as listed below:
• Web interface for direct messaging for different
users to send different messages.
• Bulk messaging capability
• 2 way messaging for transactional based
campaigns or enquiry
• Integration to back end systems (e.g. ERP) via
HTTP Post, TCPIP messages, Secure FTP and
others.
• IT notification messaging format (SMTP, SNMP
Trap and Syslog)
• High throughput via Telco connection via HTTP
Post or SMPP3.4.
• GSM modem messaging as a backup capability
• Database integration via ODBC connection
• Other connection method that can be customised
Unlike normal applications, sendQuick is delivered
as an appliance server bringing the benefits of
appliance server to the IT application teams.
sendQuick has a low Total Cost of Ownership (TCO)
and is maintenance free. All sendQuick systems
comes with one (1) year standard warranty. As an
appliance, it is easy and quick to deploy for the
standard modules. sendQuick has been deployed in
more than 1300 customers worldwide in more than
15 countries across all industries and applications.
Using SMS to deliver system and network alert
notifications provides instant notification. This
enables the IT team to increase its response time
and proactively solve potential problems before
services and end users are impacted.
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TalariaX™ | sendQuick® | Whitepaper
pg 6
TECHNICAL OVERVIEW
sendQuick works on standard TCPIP protocol,
connecting to the network using standard 100BT
with normal RJ45 cable. For Gigabit ethernet, the
server that support this high speed network can be
chosen. The schematic diagram is illustrated below.
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TalariaX™ | sendQuick® | Whitepaper
pg 7
RETURN OF INVESTMENT (ROI) COMPUTATION
sendQuick presents a good ROI for most retailers.
The illustration on ROI computation below is based
on a select usage of SMS. A higher SMS usage will
result in a higher ROI.
Assumptions on retailer:
- Customer base of 5000 and acquires 1000 new
customers a year (total 6000)
- 600 customer calls handled by call centre per
month (7200 a year)
- Per SMS cost is S$0.05
- Per mailer cost is S$2.00 (materials, printing and
postage)
- Per call centre call cost is S$2.00 (labour, operations, call charges)
Scenario 1: Cost savings from sending promotional
information via SMS twice a year
Cost of sending brochures/mailers via post = (6000
x S$2.00) = S$12000
Cost of sending SMS promotions = (6000 x S$0.05)
= S$300
Assuming 4 of such promotions are done in a year:
Annual cost of sending mailers = (S$12000 x 4) =
S$48000
Annual cost of SMS promotions = (S$300 x 4) =
S$1200
Annual cost savings = S$46800
Scenario 2: Cost savings from using SMS as a
channel to handle customer service requests
Cost of handling calls via call centre per year =
(7200 x S$2.00) = S$14400
Assuming 30% of customer requests can be
channeled via SMS
Cost of SMS messages per year = (70% x 7200 x
S$2.00) = S$10080
Annual cost savings = S$4212
The above examples show that retailers can
achieve an annual cost savings of at least S$51000
from implementing SMS for the 2 services.
CONCLUSION
SMS is a powerful enabler and tool to help
retailers achieve a personal, more engaging
communication with the customer. This contributes to higher customer loyalty and deeper
customer insight, and which in turn translates to
higher sales. An investment in a reliable SMS
system can also achieve significant cost savings.
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TalariaX™ | sendQuick® | Whitepaper
pg 8
A CUSTOMER’S SUCCESSFUL EXPERIENCE
FOTOHUB.COM
Fotohub.com Pte Ltd is a digital imaging and photo
printing service provider in Singapore, with over
10 retail stores and an online printing portal.
Fotohub.com uses SMS reminders to their customers to inform them of their photo print collection.
It also uses SMS to send marketing messages to
members of their online portal. Fotohub.com
chose sendQuick Entera as their SMS gateway
solution for its ease of implementation and low
maintenance. As an appliance server deployed
within the company’s internal network, sendQuick
also gives Fotohub.com the ability to retain
sensitive customer data in-house.
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TalariaX™ | sendQuick® | Whitepaper
pg 9
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sendQuick® is the industry's leading appliance based SMS gateway specifically designed for enterprise messaging. Developed in 2004, it has
since been implemented by more than 1300 companies worldwide across all continents.
As a low cost plug-and-play appliance that is reliable, scalable and compatible with key mobile technologies like GSM and CDMA,
sendQuick® has been applied successfully across various industries. Examples includes banking, finance, insurance, manufacturing, retail,
government, logistics, education, healthcare; for purposes like IT alerts and notifications, 2 factor authentication with SMS OTP (One Time
Password), marketing campaigns, emergency broadcasting.
sendQuick® is developed by TalariaX Pte Ltd, a Singapore incorporated company focusing on mobile application development specifically on
SMS, MMS and 3G technologies. Based on the channel development business model, TalariaX™ takes pride in working with strong partners,
distributors and resellers to bring the benefits of SMS to enterprise customers worldwide.
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