Financial Powerhouses Team Up to Test Mobile Text Marketing

In a move sure to catch the attention of bankers, marketers and retailers, Visa and Chase announced a pilot test of text-message (SMS) based marketing offers from Phoenix-area merchants to be sent to the mobile devices of Chase Visa credit and debit card holders.

To be sure, this is not “cold texting,” where Chase will be blasting out the same offer to thousands. Rather, the program will be primarily targeted at younger tech-savvy consumers aged 18-34 in the greater Phoenix area, who may opt in (either online or via text) for this pilot and select personalized offers and merchants most relevant to them.

Such offers will be in the form of merchant discounts or specials, and will be redeemable at the point of sale or at the web site of 50 participating merchants, such as Chico’s FAS, Circle K, Macy’s, Marriott, Old Navy, Papa John’s Pizza and Robeks Juice.

Chase, which sponsors the Arizona Diamondbacks, also intends to target fans, who could receive special game-day text-based offers when attending baseball games at Chase Field in Phoenix.

Chase and Visa will review the service in the fourth quarter to evaluate the impact of mobile offers on stakeholder interest, cardholder engagement and card usage.

No doubt this pilot will be studied closely. As reported by Finextra, a study released earlier this year by Juniper Research reports that SMS technology is cheaper (and greener) for merchants than paper campaigns and provides a one-to-one marketing opportunity.

In addition, mobile coupons have a higher conversion rate and reduce fraud. Juniper predicts that retailers will have issued almost three billion mobile coupons to customers by 2011, with just under $7 billion of discounts redeemed. 

With financial giants like Visa and Chase now testing the SMS waters, those numbers could certainly increase.

Meanwhile, let’s hope consumers in Phoenix have unlimited text messaging on their cell phone contracts, because with pilot programs like this heating up, they are likely to receive and send a lot more text messages.