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Crazy for Mobile Deals

A unique purveyor of pastries relies on Fanminder to blast text message offers and discounts to its followers.

Psycho Donuts needed a marketing approach that was as unconventional as its business. The Campbell, Calif., shop specializes in over-the-top doughnut delicacies such as its Cocoa Loco, Marble Madness and Nutella the Hun, all served up by cashiers wearing nurse uniforms. To appeal to the young, hip sugar fiends that make up the sweet spot of its clientele, the shop turned to Fanminder, a mobile marketing platform that lets small businesses send text-message discounts and special offers to customers who opt in.

For Psycho Donuts owner and "chief psycho" Jordan Zweigoron, Fanminder offers something social media platforms like Twitter don't: a direct channel between merchants and customers that rewards consumer loyalty.

"Twitter is a neat tool. But it seems like everybody's talking and nobody's listening, and business offers can get lost," he says. "With Fanminder, customers make a decision in my store that they want to get texts from me. There's a real aspect of loyalty in that--they want to be a part of this."

Psycho Donuts rewards that loyalty by offering its Fanminder followers deals unavailable elsewhere. After signing up for the Fanminder mailing list (advertised in-store), customers can show their welcome text message to a Psycho Donuts cashier to receive a coupon for a free doughnut on their next visit. The business also sends out related text specials and promotions, promising better deals via Fanminder than it offers on its Twitter feed. Psycho Donuts now boasts about 400 Fanminder list members compared with its roughly 1,000 Twitter followers, Zweigoron says. But its Fanminder offers typically generate a response three or four times greater than Twitter promotions.

"It's important to treat people in this program even better than you treat your other customers, because they're your most loyal fans," he says. "It's also important to remember that not everyone on Twitter gets tweets on their cell phone, but it's easy to attract people who text. They're already used to that."

The ubiquity of text messaging is central to Los Altos, Calif.-based Fanminder's value proposition, says CEO and co-founder Paul Rosenfeld. "With Fanminder, you can instantly communicate something to customers to get them to come back to your business," he says. "Seventy-seven percent of mobile subscribers text on a regular basis, and 97 percent of all text messages are read within 15 minutes of arrival. It's hard to make those same claims with e-mail marketing, Twitter or even Facebook."

Fanminder charges clients $25 per month for unlimited texts sent to as many as 100 fans, complete with tracking research, list segmentation tools, customer support and related services. Prices go up to $150 monthly for 401 to 800 fans, with custom quotes for fan bases beyond that. A new Facebook option, which was set to launch in late summer, is free for clients. Fanminder also supports appointment reminders, cancellation notices, inventory updates, equipment requests--whatever information a business wishes to broadcast.

"With almost no effort on your part, you can build your business and bring customers into your store," Rosenfeld says. "The response rate blows away everything else you're doing."

Chicago-based writer Jason Ankeny is the executive editor of Fiercemobile content, a daily electronic newsletter dedicated to mobile media, applications and marketing.

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This article was originally published in the October 2010 print edition of Entrepreneur with the headline: Crazy for Mobile Deals.

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