This feature is only available when sending a text to all active contacts or a group. To test this, add yourself to a group and send it to just that group. This does not work with previews or single text messages.
Use the (FIRSTNAME) tag in your messages. For example
Hi, (FIRSTNAME)! Stop in today to get a free soda when you buy a slice of pizza.
Also, you can use the Optional1, Optional2, and Optional3 fields with these tags: (OPTIONAL1), (OPTIONAL2), (OPTIONAL3).