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COUPONS FROM CELL PHONES
Local Subway shops are pioneering new way to get a free lunch

To get the free sub, you send a text message from your cell phone. The reply buzzes back a minute later.

"You will now receive free offers!" it says. There's a code number to give the cashier, and the six-inch sub is free if you buy a large drink.

Phones aren't just for communicating anymore. Getting digital coupons for freebies instantly -- such as while standing in line at the Subway on Chippewa Street -- is one part of an emerging world of "mobile commerce," where phones have become tools for buying and selling.

"The great thing about the phone is, it's becoming the new appliance," said Bob Wesley, chief executive officer of Modiv Media in Boston.

Wesley's company provides the technology behind the text coupons that hawk sandwiches for 107 Buffalo-area Subways. In other regions, the company beams information to consumers in supermarkets.

Unlike paper coupons, text ads can target people where they're shopping, when they're shopping, making them more useful for consumers, proponents say. And they're cheap to distribute.

People who opt into the Subway come-on receive text offers targeted to them geographically, based on the store where they signed up. The offers can go out during the "decision period" in the mid-morning, while people are formulating their plans for lunch, Wesley said.

About 150 million people in the United States use text messaging, industry estimates say, representing a huge potential market. Many of them have already downloaded a free ring tone or phone wallpaper, putting their number into somebody's marketing database. Bills fans, for example, can get ring tones and other freebies by providing their cell number on a sign-up form on the team's Web site.

Cell phones are off-limits to telemarketing under the Telephone Consumer Protection Act, a rule that applies to text as well as voice. That means marketers can send you come-ons only after they get your permission.

That "opt in" system is the method area Subway stores are using in their promotion, said Michael Lewkowicz, chairman of the Buffalo Subway advertising trust fund.

Under industry guidelines, users get a chance to "opt out" of the program each time they receive a new message.

"The cashier can't stop (messages,) but the person can," he said. "This worked very well for our stores."

Since being launched by tech-savvy Buffalo shops a year ago, the promotion has been adopted recently by Subways in Seattle.

In the Buffalo area about 5,000 people have signed up for the offers in the past several months, Lewkowicz said. People redeem their text coupons at an average rate of close to 9 percent -- much more than the 1 percent to 2 percent response rate for paper coupons. Initial coupons, which are usually issued while the customer is in the store, have response rates of 30 percent to 50 percent.

But text ads aren't catching on with everyone just yet. During the lunch hour recently at the downtown Buffalo store on Chippewa, there weren't many phones buzzing with offers for free subs. In fact, the cashier said people rarely used them.

Three visiting business students from the University of Pittsburgh were willing to explain why they weren't interested in signing up.

"In this day and age, you never know who is going to do what with your information," senior Caroline Friedman said.

Schoolmates Chrissie Puchti and Emily Kretschman, all members of Alpha Kappa Psi, backed her up. Some marketers contend you've entered into a contract by sending them a text message, Kretschman said.

Her cell plan includes unlimited text messaging, so the cost of receiving texts isn't a barrier, Friedman said. It's the thought of releasing her cell number to an unknown quantity.

"There's no 'free,' " Puchti said.

Lewkowicz said that the Subway program sends texts infrequently, and that the cell numbers collected aren't shared or used for any other purpose.

Fighting to keep cell phones clear of the spam that crowds e-mail is a preoccupation of cell carriers. Verizon Wireless sued a Nevada company in May for sending unsolicited text messages. I-Vest tried to send more than 12 million texts promoting stocks or real estate, Verizon's lawsuit charges. About 5,000 of the messages got through the company's spam filters.

"That's something we're kind of keeping in the forefront," spokesman John O'Malley said. Cell carriers can exert control over the text messaging system, preventing abuse that the open architecture of the Internet is susceptible to.

Used responsibly, cell phone text, with its immediacy and growing user base,, can be a useful tool for shopping, he said. Verizon customers send about 12 billion text messages a month, and unlimited text packages are popular with heavy users.

"It's got huge potential to be a whole new marketing medium," he said.

e-mail: fwilliams@buffnews.com

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