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Kiehl’s exec: 73pc of opt-in customers make a purchase after receiving a text alert

September 21, 2012

A location-based text from Kiehl's

Please click here to access the archived webinar

An executive with Kiehl’s said that 73 percent of customers who opted-in to receive location-based text alerts made a purchase after receiving one of these messages during a Mobile Commerce Daily webinar yesterday.

The executive also said that the results for text messaging are much stronger when they are pushed out to customers who are nearby a store. During the webinar “Behind the Geofences,” the executive discussed an ongoing text messaging program for which the brands’ store locations were geofenced so that customers receive messages when they are nearby.

“We see the results are so much superior when someone is in the area and we are giving them a message based on the fact that they are close by,” said Frances Grant, vice president of marketing at Kiehl’s, New York.

“This method, being so targeted, the open rates are so much higher than email campaigns,” she said. “For us, this is an amazing way to increase brand awareness and drive traffic into stores.

“The way we’ve capped the messages at three times a month keeps the opt-out rates lower.”

Driving store visits
The program was piloted last year and has been rolling out to the brand’s 53 store locations nationwide this year.

The stores are geofenced from between half a mile to two miles around their location. The program enables Kiehl’s to deliver text messages to anyone who has opt-in once they are within the geofenced area and send them messages designed to drive them into a store.

Kiehl’s worked with Placecast to develop the program in order to increase brand awareness and drive increased traffic to its stand-alone boutiques. Customers who opt in receive approximately three mobile alerts every month on new products, seasonal items, special events and promotional offers.

The initial phase of the program ran for six months, during which more than 1,000 customers were recruited into the campaign  and more than 7,000 messages were delivered to participating users within the geofenced areas.

The program is promoted at the check-out counter with an offer of a free lip balm for customers who sign up.

This summer, Kiehl’s also promoted the program in an email blast and acquired 4,500 new opt-in users as a result.

The retailer also leverages social networking portals to promote the program.

A survey of these users found that 81 percent recalled receiving text alerts and there was a 77 percent increase in the likelihood of a customer visiting a store after receiving a text message.

Ease of use
Eventually, Kiehl’s plans to integrate the program into its CRM system, at which point it will be able to track repeat customers, frequency of visits and other important information that will enable the retailer to deliver even more targeted offers based on customer behavior.

“One of the things that attracted us to geofencing is about being in the right place at the right time,” Ms. Grant said. “Someone can walk past a store with no intention to make a purchase and this can drive them in there.

“We also like to do targeted messages and this is getting people in the store with a message that is completely relevant to them should they be near a store,” she said.

The webinar also presented recent research showing that interest is growing among mobile phone users in receiving text alerts about new products and other promotions for merchants once they have given permission to the marketer to contact them this way.

The survey found that 31 percent of users are at least somewhat interested in receiving such texts, up five points from a previous survey. Additionally, 10 percent are very interested in receiving text alerts, up five points from a previous survey.

“When people get a smartphone, it enhances their behavior with every type of activity on that phone,” said Kathryn Koegel, chief of insights at Primary Impact, New York. “For text messaging, it actually increases the impact.

“With all that is going on on these phones, text breaks through the clutter and really gets people’s attention,” she said.

“What people find most appealing about text alerts is that they are so easy to act upon.”

The types of alerts consumers are most interested in receiving include grocery coupons and promotions, national restaurant chain offers, entertainment products fast food menu items.

Best practices
A second survey of consumers who have received text alerts as part a brand’s efforts with Placecast found that 73 percent of recipients said they were likely to visit a merchant after receiving a geotargted text message from them while 71 percent actually made a retail visit and 61 percent made a purchase after receiving the alert

The number one reason why consumers like to receive text alerts on their phone is because they are easier to act on than ads, coupons, emails or direct mail offers because their phone is always with them, with 53 percent of respondents answering this way.

The research also suggests that text offers can drive loyalty, with 18 percent saying text alerts become  more valuable over time because users expect offers to arrive based on where they are while 31 percent find value over time as the offers become more relevant to their interests.

There are several best practices retailers should keep in mind when embarking on geotargeted text messaging campaigns, per Placecast.

One best practice is to pull in not only location information but also other types of dynamic data such as weather, traffic, events, loyalty information, past purchases, user data and demographics.

Merchants should also keep in mind that the opportunities for geofencing extend beyond stores to include any venue where the target audience would likely be exposed, such as sports arenas, concerts, ski resorts, airports, gyms and parks.

Marketers should also be sure to use all of their customer touch points to build their opt-in database and include an incentive to join. Placecast reports it has seen two-times the opt-in growth with a customer is given a specific incentive to join a program.

“The beauty of geofences is that they are triggering messages when someone is in the mindset to make a purchase and walking past a store,” said Alistair Goodman, CEO of Placecast, San Francisco.

“Use location, time and other data to tailor offers to that user,” Mr. Goodman said. “All of us win when users experience that as a valuable service brought to them by the brand and don’t see it as unwanted advertising.”

“The more data that can be brought bear combined with real-time location delivers an experience to the consumer that feels very relevant,” he said.

Please click here to access the archived webinar

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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