In January 2019, Michael Sharon and Kal Freese wanted feedback on their new coffee-based, adaptogen-packed drink. They figured the easiest thing to do would be to slap Freese’s cell phone number on the cans and ask their guinea pigs (employees at a startup in San Francisco) to text in their feedback.

"Text was the simplest, lowest common denominator way to make sure we had a connection with people," Sharon reflects.

Since Taika launched to the wider public in May 2020, its cans have gone through a number of redesigns. One thing, however, has always remained front and center: a phone number for customers to text in their thoughts.

Let's talk about conversational commerce

Taika is far from the only brand texting its customers. In 2016, drink brand Dirty Lemon became one of the first to popularize ordering via SMS, while The Cereal School and energy bar company Verb have since followed its lead.

Others have tapped into SMS to share specific expertise. Furniture brand Burrow answers customers’ interior design questions via text, Great Jones’ "Potline" launched in June 2019 to serve up cooking advice, and Empathy Wines’ concierge "Nora" offers personalized wine recommendations.

While Taika originally relied on SMS for feedback and reordering, Sharon says the strategy has since evolved to something he and Freese call "scaleable hospitality," where Taika has full-blown conversations with customers over text message. He likens it to striking up a conversation with a barista at a local coffee shop. Taika won’t confirm exactly how many customers it’s texting, but Sharon says the numbers are in the "tens of thousands."

With more than 7,500 customers opted-in to receive messages, prebiotic soda brand Olipop takes a similar approach. In addition to managing subscriptions, customers get access to new flavor launches over text. When it debuted a blackberry vanilla soda in December, Olipop managed to sell $15,000-worth of drinks in just 15 minutes. "We’ve done more sales on SMS than we do with our email list, which is ten times the size," says the brand’s head of customer experience, Eli Weiss.

Why do brands want to text me?

These impressive numbers are exactly why brands are so keen to get our digits. The average open rate for a text message is 95% according to Esendex, and it’s estimated that 30% of recipients go on to make a purchase. The conversion rate for emails, meanwhile, sits at a comparatively measly 3-4%.

That conversion rate is so high, Voyage SMS’s CEO Rev Reddy says, because of how easy it is to complete purchases on our phones. "This whole mobile ecosystem, of browsing products on social media and then converting via mobile through your [digital] wallet – it’s built up so much in the past five years," he says.

Alfredo Salkeld, marketing manager at texting platform SimpleTexting, gets at the heart of it. "Brands like texting customers because their customers actually read their texts," he says. "Every ecommerce brand is struggling with the same things – increasing advertising costs, decreasing email engagement rates and decreasing reach on [social] platforms."

So while texting may be more expensive than sending emails – Salkeld says SimpleTexting charges around $625 to send 50,000 text messages per month – for brands the payoff is worth the price tag.

Text “STOP”

But texting customers can be risky. Unlike email, people don’t typically give out their phone numbers with abandon. When brands do get hold of these digits, they’re likely to be in an elite group given that honor. Subscription businesses tend to fall into this category, as part of sustaining their ongoing relationship with customers.

People also tend to be less forgiving of brands that send spam via SMS. "This has traditionally been an inbox reserved for family and close friends," Salkeld points out. "It’s a privilege for consumers to let you into it." All it takes is the magic word "STOP" (U.S. brands are required by law to include an opt-out prompt in their text message marketing) to end the conversation for good.

Weiss says Olipop has an internal rule to never send more than two texts per month to customers, with or without a link to the brand’s website. "Marketers abuse things pretty quickly," he says. "Email has become very cluttered and spammy, while SMS as a channel is probably one of the most intimate ways of connecting with people."

It’s a strategy that appears to be working for the team. Weiss says Olipop’s worst unsubscribe rate following a campaign is around 2%, while the subscriber list itself is growing steadily.

The future of text messaging

For brands that don’t exercise caution, regulators and carriers are coming. Starting June 1, AT&T and T-Mobile will ban the use of "shared short codes," the five to six digit numbers that marketing platforms share between their clients to blast out huge volumes of messages. Instead, brands will either have to switch to a 10-digit number (which can only send one message per second), or pay more for their own dedicated short code (which can send as many as 100 messages per second).

This change won’t stop brands from texting us, but it does mean they'll have to think more carefully about why, when, and how often they get in touch.

"There’s definitely going to be more governance around this, and the only way around it is to be more intentional and segment a lot more," Weiss says. Olipop creates segmented lists based on previous text messages that customers have responded to, so those few hundred people (rather than the entire list) can get more of the same content in future.

Likewise, feminine care company Blume lets customers opt in to text updates around specific products. Its approach to texting is also extremely cautious: cofounder Taran Ghatrora says the company sends around one text each month to customers.

When it comes to her own phone, Ghatrora says just five brands have her phone number, with Not Pot’s "funky" texts among her favorite.

"Messages I like receiving from brands are ones that are unexpected, personalized, or coming from someone on the team," she says. "We’re already on our phones way too much, the last thing we want is to be bombarded by every single brand."

Thingtesting is a database of internet-born brands. We’re building the un-sponsored corner of the internet where consumers can come together to talk honestly about new things. Read more about Thingtesting.

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