Rocketing through the recession
Mar 30, 2009

By Andrew Moore / The Bulletin
Published: March 19. 2009 4:00AM PST

In an economic pinch, consumers often reach for value, shaking up old habits in the process.

That’s one way Fred Boos, the founder and president of RocketBux, a Bend startup that delivers digital coupons to cell phones, describes the company’s recent growth despite the recession.

Boos said consumers are more willing to hand out their mobile numbers to marketers, as the fear of spam is slowly replaced by the promise of a good deal.

“With this economy, people are looking for some type of discount and businesses are looking for new ways to reach customers,” Boos said. “This is a huge tidal shift. If people can save money by getting an ad on the phone, they are going to do it.”

The shift in consumer attitude and the growth of mobile marketing also is spurring growth at RocketBux. Boos would be disappointed if the company doesn’t grow from its current 17 employees to 45 by year’s end. The company has offices in Eugene, Palo Alto, Calif., Richmond, Va., and Calgary, Alberta, but many of the new positions would be at the Bend office, where five now work. Boos said he’ll be primarily looking for sales staff and information technology workers.

“I hate to say it, but it seems like the bad economy is good for us,” Boos said.

RocketBux’s technology is centered on text messages that it sends on behalf of its clients, generally advertisers or businesses with direct marketing campaigns. Customers either opt to receive the text messages by providing their mobile numbers to an advertiser or they send a text message to a specified number in an advertisement, which triggers the immediate receipt of a coupon-bearing text message.

Roughly 600 billion text messages were sent last year, according to CTIA The Wireless Association, nearly 1,000 percent more than in 2005.

Kerri Stewart, the owner of a Dutch Bros. Coffee franchise in Junction City, is a RocketBux client. She gives her customers a one-time $1 discount on their orders if they give her their mobile numbers, which she then uses to send out coupons. Stewart said that at roughly 5 cents per text message, the return on investment is “huge” and the results are immediate.

“I can have a slow Tuesday afternoon, and I can sit on my computer, type (a text message), send it and instantly have customers come in. We can adjust very easily to what’s going on,” Stewart said.

That immediacy helps Stewart sell cold drinks on hot days and muffin tops when inventory is high, she said. There’s also a sense of value, she said, that helps drive more sales, as a customer drawn to the coffee stand for a discounted mocha also might buy something extra, like another drink or something to eat.

Stewart said she has not received much push-back from her customers when shes asks for their mobile numbers, noting customers can opt-out at any time. More importantly, she said, in a town of roughly 4,500, more than 1,200 customers have signed up.

In Junction City, hit hard by layoffs at nearby Monaco Coach Corp., people are grasping for bargains, Stewart said.

“This town has been hit significantly, (but) it’s worked well in the sense that it’s very easy to sign up because it doesn’t cost them anything and it doesn’t cost them anything to do it,” she said.

At work in Bend

In Bend, Newport Avenue Market is using RocketBux’s technology in conjunction with an advertising campaign developed by Every Idea LLC.

In radio ads for the market, the advertisement invites listeners to text message the store — technically, they are texting RocketBux — to receive a special coupon code in return, such as a code for a 49-cent loaf of bread or 99-cent pint of ice cream. The consumer then announces at checkout they have a cell phone coupon, at which point the checker asks for the coupon code and enters it into the register.

Deborah Yaw-Dory, co-owner of the market, said the technology is fun and a new approach to getting customers in the door.

“People that jump on it have the opportunity to save money, and hopefully this will grow in acceptance,” she said. “This is the latest and greatest thing and we like to be the first in the market to try things.”

Boos said another plus for the technology is it provides businesses with a way to track how effective an advertisement is by counting the number of coupons redeemed.

RocketBux also has the ability to send text message coupons with bar codes, enabling the phone to be scanned at checkout. This technology only works for newer phones with graphics capabilities, such as Apple’s iPhone and other next-generation smart phones.

Tech’s next big thing

A veteran of the Bay Area’s dot-com heyday in the 1990s, Boos moved to Bend — drawn by the region’s quality of life — and founded RocketBux in 2005. It is privately held and holds patents on much of its technology.

Boos’ background is in startups and RocketBux’s Bend office looks it. Boos likes the office’s “open pit” environment, with no walls between five employees sharing a roughly 250-square-foot space, their work stations covered with empty Styrofoam instant-soup cups and a video game console in the corner. Boos travels a lot and keeps two phones — an Apple iPhone 3G and a BlackBerry — to stay connected.

Boos said the mobile application industry — those companies that are developing software and applications for mobile phones — is in the same hyper-growth stage Boos witnessed during the Internet’s early years. As smart phones continue to evolve and provide the functions once reserved for desktop computers, more people will continue to adopt them and make them a part of their everyday lives, and reap the rewards as a result, Boos said.

“If you don’t adopt new technologies, it costs you more to participate in society,” Boos said. “This recession is changing behavior, so you have to choose technology if you want cheap bread at Newport (Avenue Market).”

Andrew Moore can be reached at 541-617-7820 or amoore@bendbulletin.com.