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Comparing Marketing Solutions: Inside the Numbers

“Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.”  Albert Einstein

Did Einstein deal with marketing decisions? What we he have done?

Businesses make decisions every day on how to get customers to talk to them, and spend big money to make that happen. Billions and billions get spent every year on marketing (around $595B to be close to exact) in order to get their brand out there, but do they know what they are spending their money on? Is digital marketing now king? Is email marketing the winner? How about the old school phone calls? What about the new kid on the block, texting message marketing?

Decisions on where and how to allocate funds are always best made with data. So let's look at the numbers.

The following numbers are averages across all industries. Sources are listed at the end of the article. Below is a breakdown of the various means used for fundraising:

TEXT READ RATE:

1) TEXT: 98%

2) MAIL: 66%

3) EMAIL: 22%

4) PAY PER CLICK: 3.81%

5) TELEMARKETING: N/A

Text message marketing has 148.5% read rate advantage over direct mail. Pay per click is by far the poorest performer in this group. Telemarketing has no ability to brand your entity. Either people pick up the phone or they don’t. If you want people to receive your message, the clear winner is text messaging.

RESPONSE RATE:

1) TEXT: 19%

2) TELEMARKETING: 8.21%

3) EMAIL: 4.2%

4) PAY PER CLICK: 3.81%

5) MAIL: 3.4%

Text message marketing comes in at over double the effectiveness of using the phone.

CONVERSION RATE BY MARKETING TYPE:

1) TELEMARKETING: 8.21%

2) MAIL: 4.2%

3) TEXT: 1.68%

4) PAY PER CLICK: .22%

5) EMAIL: .21%

Direct mail and telemarketing have been marketing fixtures for so long because of high conversion rates. Text marketing finishes 3rd behind telemarketing and direct mail.

COST PER MESSAGE:

1) EMAIL: $0.01

2) TEXT: $0.01-0.04

3) MAIL: $0.49

4) TELEMARKETING: $0.64* (if paying telemarketers $9/hour)

5) PAY PER CLICK: N/A

Email has a cost because email systems cost money. Texting costs can be as high as 10 cents a message and as low as 1 cent a message. Cost is the top factor as to why email was the number one marketing tool in 2017.

COST PER ACQUISITION OF A CUSTOMER:

1) TEXT: $2.49

2) EMAIL: $4.98

3) MAIL: $51.40

4) PAY PER CLICK: $99.47

5) TELEMARKETING: $309.28

THE MARKETING SOLUTIONS FINAL RESULTS:

READ

1) TEXT MARKETING: 1

2) EMAIL: 3

3) MAIL: 2

4) TELEMARKETING: N/A

5) PAY PER CLICK: 4

RESPONSE

1) TEXT: 1.6

2) EMAIL: 2.8

3) MAIL: 3

4) TELEMARKETING: 4

5) PAY PER CLICK: 4

CONVERSION

1) TEXT: 1

2) EMAIL: 3

3) MAIL: 5

4) TELEMARKETING: 2

5) PAY PER CLICK: 4

COST PER MESSAGE

1) TEXT: 2

2) EMAIL: 1

3) MAIL: 3

4) TELEMARKETING: 4

5) PAY PER CLICK: N/A

COST PER CUSTOMER ACQUIRED

1) TEXT: 1

2) EMAIL: 2

3) MAIL: 3

4) TELEMARKETING: 5

5) PAY PER CLICK: 4

FINAL RESULTS

1 TEXT: 1.6

2 EMAIL: 2.8

3 MAIL: 3

4 TELEMARKETING: 4

5 PAY PER CLICK: 4

These numbers should make marketing directors all over America take notice. It should come as no major surprise that email and texting have a lower customer acquisition cost. Staffing telemarketers takes space, resources, software, phones, management and per dial costs. Direct mail takes paper, ink, stuffing envelopes, management, space and postage.

The clear winner is text messaging, beating out last years effective fundraising tool by 1.2 stack ranked points. This is the most effective text marketing solution

The cost of acquisition for texting is 50% what is for email. Texting is also 124 times less expensive per customer acquisition than telemarketing and over 20 times less costly than direct mail, which again was the number one marketing expense for direct marketing in 2017.

SO WHAT DOES IT ALL MEAN?

At any given moment, 91% of people in the United States have a cellular phone within arms reach. The world has changed, and some businesses are making great decisions while others are not adapting.

Texting your business contacts has response rates up to 8 times higher, a 50% reduction in customer acquisition cost and a read rate over 4X higher than email.

Much like telemarketing, there are certain rules and regulations that need to be implemented. One of the first things an organization interested in using mobile marketing would be to change their contracts (online and other) to allow for the usage of cellular phones. The second step would be to start collecting more mobile phone numbers. The third step would be to look into regulation.

More information can be found here:

http://www.fcc.gov/guides/spam-unwanted-text-messages-and-email#sthash.CsSivVHU.dpuf

Texting is significantly more effective when compared to other marketing techniques in terms of cost per acquisition, read rate and click through rate but it does not mean it should replace every other type of marketing. To the contrary, the more effective fundraising campaigns incorporate multiple methods of contact and use the various tools to complement each other.

For information on 12 ways to reduce risk and stay within compliance for texting campaigns, please visit:

http://blog.textingbase.com/posts/12-ways-to-use-texting-for-business-communication-and-limit-your-risk#sthash.CsSivVHU.dpbs

For more information, please visit:

http://www.textingbase.com/niches/politics

Sources:

http://www.cmocouncil.org/facts-stats-categories.php?view=all&category=direct-marketing

http://www.the-dma.org/cgi/dispannouncements?article=1451

http://support2.constantcontact.com/articles/FAQ/2499

http://www.businesswire.com/news/home/20130122005630/en/Leads360-Study-Finds-Text-Messaging-Selling-Process#.VMqqS75gZUQ

http://elections.nytimes.com/2012/campaign-finance

http://www.opensecrets.org/news/2013/06/2012-overview/

http://www.gloccal.com/telemarketing/cost-of-telemarketing.html

ABOUT THE AUTHOR

Eric Beans is CEO of Texting Base, Inc., out of Orlando, Florida. Texting Base is a marketing automation platform which allows businesses to personalize group text messages.

Prior to Texting Base, Eric was the first US employee of TechSpan which became Headstrong. Headstrong sold for $550M to GenPact.

With a group of partners in 2005, Eric started Premier Mortgage Capital, Inc., a nationwide state charted Mortgage Company that grew to over 1B/Year in originations.

Eric is the author of "Changing The World Through Texting Software.”

Eric is a speaker, inventor, patent holder, chef, writer for LA Style Magazine, producer and author.

Texting Base does not offer legal advice-please consult an attorney before starting to text for business purposes.

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