Mobile Marketing: New program achieves 11% redemption rate on text offers

by David Kirkpatrick, Reporter

CHALLENGE

HotBox Pizza is a specialty restaurant that sells pizza and breadsticks, with nine stores in Indiana and North Carolina. Most locations are in the Indianapolis area, and several are found in college markets.

HotBox Pizza's Director of Awesomeness (actual title), Nikki Halcomb, said the company makes an effort to keep up with marketing trends in email and social media, and decided text messaging was the latest wave in consumer marketing.

The company dabbled in mobile marketing but found it expensive, and also ran into limitations on when it could send the text messages. The breakthrough happened when HotBox Pizza learned its email marketing vendor offered a SMS text marketing service that was more in line with what the company wanted out of the new effort.

This case study covers how HotBox Pizza launched its mobile initiative and outlines why and how it is treating mobile marketing differently from its email and social media programs. Read on to find out more about effective ways to build a mobile subscriber base and effectively use this hot marketing platform.


CAMPAIGN

Once HotBox began mobile marketing in earnest, it quickly formulated a plan to get the word out about its mobile marketing program and to develop a basic strategy to employ with its mobile campaigns.


Step #1. Promote the mobile initiative

HotBox Pizza made enrolling in the program easy and enticing. Anyone wanting to opt-in only needed to text a zip code to an SMS short code, with the incentive of free breadsticks for signing up. With the enrollment method in place, HotBox Pizza executed a three-stage plan to generate subscriptions.

- Facebook

The first promotion was a simple Facebook post across all of HotBox Pizza's Facebook pages.

"[The post] ignited this word-of-mouth wildfire," Halcomb said. "It was just insane. We saw (the results) and we were like, 'What's going on? Where do all these people come from?' It was nothing like I ever imagined from putting up one Facebook post."

From this initial promotional push, HotBox Pizza picked up almost 2,000 subscribers in less than two weeks. Based on ZIP code data, the largest proportion of these subscribers came from the Purdue University market.

- In-store banners

Around two weeks after the Facebook post, HotBox Pizza placed banners in all its stores. The banners were red and featured copy with a call-to-action of "get FREE STIX right now!" followed by the subscription instructions.

After the surprising success of the Facebook post, Halcomb said they didn't notice much action from the banners. She added the printing expense was worth it because now the company expects to continue using the banners to promote the mobile program at events.

- Email blast

Halcomb plans on adding a mobile marketing call-to-action in HotBox Pizza's welcome email for new email subscribers and as part of the usual weekly email send, but a single email blast was the third stage in the initial promotion.

That send had an eye-catching subject line: "Get FREE BREADSTIX Right NOW!"

HotBox Pizza has almost 20,000 subscribers on its email distribution list and ran into technical problems the night of the blast send. The system went down three minutes after the initial send and the email had to be sent a second time.

This caused havoc for Halcomb because she had to go back, double-check and find everyone who signed up for the mobile program and their free breadsticks during the time the entire system was down.

She said, "We promised them free breadsticks, and we were not going to go back on that promise."

Even with technology issue the initial email blast drew in around 1,000 additional mobile program subscriptions.

The initial text message from the program honoring the free breadstick offer includes a note outlining that the recipient can expect one or two text messages a month through the program. The initial message also provides an opportunity to simply text back, "stop," in order to opt-out of the program after receiving the free breadsticks.

After the program launch was complete, HotBox Pizza began growing the subscription base more organically in the stores. When a customer orders breadsticks, HotBox Pizza employees will let them know if they aren't part of the mobile program they can send the opt-in text and get that order for free.


Step #2. Don't over-use the mobile program

Early on HotBox Pizza decided to approach mobile marketing a little differently than its efforts in email and social media.

"It's a pretty intimate thing to have somebody invite us into their phone." Halcomb stated. "Email is often an intimate thing, too, but (with mobile marketing) you are texting that person's phone directly."

She went on to explain that the company offers a weekly half-off pizza special that is promoted through its email list, Facebook and Twitter. The mobile program is not part of that promotion. The reasoning is the company doesn't want to send text messages to its subscriber as often as once a week.

Instead, the mobile program is used for special deals that are not promoted through email or social media.

Halcomb explained, "Across the board our text offers are just a little bit sweeter because it's more intimate for us to be invited to their phone."


Step #3. Make highly targeted offers

One advantage the mobile subscriber list offers HotBox Pizza is the opportunity for geographically targeted offers.

The company has restaurants in a number of cities including three college markets, and it encourages each store to serve its local market. Because the opt-in for the mobile program is the person's ZIP code, HotBox Pizza can segment its list for offers that help the stores cater to individual markets.

For example, if a local high school wins a championship game, the company could immediately send a special mobile offer.

"We have the ability to then just text those people (signed up) at that store," said Halcomb. "People in Indiana aren't going to care about the North Carolina football team."


Step #4. Use Twitter and monitor social media activity

The intimacy of mobile marketing ties into social media. Mobile program subscribers also possibly using that same device to update their Facebook accounts or Twitter feeds.

Halcomb likes Twitter because it helps turn marketing offers into conversations with HotBox Pizza customers. And it's an effective way to address customer questions or complaints about the mobile marketing program.

"On the rare occasion when we have a customer complaint, we can address it immediately," Halcomb stated.

She added social media allows HotBox Pizza to have a relationship with customers beyond just "blasting out some offer or coupon."

Halcomb uses a social media dashboard tool to monitor both Twitter and Facebook and keep tabs on any mention of the company. This gives her an effective way to monitor, and respond to, customer comments or complaints.

If someone has something to say about the mobile program and tells the world via social media, Halcomb will know about it and be able to quickly respond.


Step #5. Continue innovating and planning new uses for the mobile program

Currently the mobile program involves about two sends each month featuring:

o Special promotions and offers
o New product announcements
o Store news

Halcomb said the company continues to look for new ways to use the mobile marketing platform, without being too intrusive for its subscribers. She added currently HotBox Pizza is considering some type of contest to add to the mobile marketing mix.

"We want to be selective with the things that we send. We want to make sure they are relevant and engaging and not something that would annoy people," explained Halcomb.

Halcomb mentioned another benefit of the mobile program, "It's great to have a captive audience of that many people. Pretty much anything you do (offer-wise), you can count on incremental revenue."
RESULTS

HotBox Pizza's mobile initiative launched this past March and continues to grow with more than 6,000 subscribers.

The key metric for the campaign is SMS text promotions average an 11% redemption rate.

Because all of its other offers appear in multiple places -- email, social media and in-store -- HotBox Pizza doesn't track redemption rates. Since mobile offers are exclusive to the text program, the company is able to keep tabs on those redemption rates and it is very pleased with the 11% average.

The initial email blast had:

o 27% open rate
o 1.8% clickthrough rate

These numbers compare to HotBox Pizza's standard email metrics of 18-20% open rate and 1-3% clickthrough rate.

Another key result for the mobile effort was it gave HotBox Pizza an easy way to geographically segment the subscriber base by asking for a ZIP code at opt-in. This gives the company the opportunity to highly target specialty offers and provides its nine locations additional marketing options to cater to those individual markets.

The success of the initial Facebook post to drive the bulk of the early program sign-ups provided HotBox Pizza with the learning that its Facebook fans were providing more word-of-mouth support for its offers than it previously realized.

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