It doesn’t matter what line of business you’re in: The name of the game is to remain relevant. To do that, your customer engagement strategies have to continuously evolve. Customers are increasingly requiring businesses to provide faster, simpler, and more efficient ways of communicating with them. So businesses that can adapt quickly to the constantly-changing needs of consumers will be more likely to provide excellent customer service — which in turn will lead to highly-satisfied consumers. This is where text messaging becomes an important tool that can promote consumer engagement.
Text messaging has been around since the early 2000s, and many companies, especially telecom and financial institutions, found a ton of success with SMS marketing campaigns before email marketing gained popularity. Business texting, however, has recently made a strong comeback now that marketers are looking for more efficient ways to communicate with customers — especially those who are reluctant to visit stores. Dwindling engagement rates of emails further amplified the use case for business text messaging. SMS is cost-effective and simple — and in fact, has the highest level of engagement above all other channels.
Reach them where they are most — on their phones.
Many businesses find SMS marketing to be a powerful tool in their marketing arsenal. With an estimated 6.4 billion smartphone users in the world (83.72% of the world's population), it’s no wonder marketing professionals are constantly looking for ways to improve their engagement with their customers via mobile devices. These portable mobile devices are not only a powerhouse of communication, but also a device that the majority of users spend 4 to 6 hours on each day.
A number of studies demonstrate that mobile phones are a highly effective channel for driving purchases — especially since the pandemic. Generally speaking, many businesses aspire to fulfill two tasks: to keep their customer base satisfied, happy, and engaged on the one hand, and to increase revenue and loyalty on the other hand. These are two sides to a successful business formula — but definitely easier said than done. This is why many companies look for a reputable customer engagement platform to help facilitate customer experience strategies.
Why is text messaging so much better for customer engagement?
A growing number of mobile phone users appreciate and now even prefer the ease of access to a product through a simple link within a text message. Text messaging offers several advantages to marketers eager to engage their target audience via mobile devices. Because of its convenience and accessibility, SMS has emerged as a viable business-to-consumer engagement channel.
Customers are currently inundated with mass marketing emails that do not always offer value, and traditional advertising is not reaching consumers at the critical moments of their customer journeys. The consumers of today pay more attention to businesses that offer authentic interactions through their preferred media channels. For example, credit unions, a sector that sees a high rate of turnover in its membership, may find SMS a useful communication channel for educating their members about new products and services based on their purchase history.
Consumers are looking for more than just a good price.
In a recent Credit Union Innovation Index survey, 21.9% of members indicated that they would consider switching financial institutions. Just like customers of other financial institutions, credit union members are seeking new ways to interact with their chosen brand. SMS not only provides relevant news and updates, but also improves lead response times, and provides quick 2-way access to customers and the brand. In this particular instance, a business may be able to leverage an SMS platform's specific benefit which aims to increase engagement and then retention.
Because multiple brands compete closely with each other, it’s been challenging to create brand differentiators that are distinctive. We live in an era when the price of a product alone is no longer a determining factor in the decision to engage with a particular brand. Customer experience holds that torch now and in order for financial institutions to achieve success in this space, quality engagement, customer support before and after a purchase, and relevant communication following the sale must be included in all business strategies.
Enhancing customer engagement strategies through SMS marketing.
The concept of customer engagement keeps evolving as more companies seek innovative ways to retain and attract loyal customers. In previous years, offering a quality product or service was enough to attract and retain customers. Today, engagement is a central topic of discussion for many marketing objectives. Additionally, the 2020 pandemic has taught many companies the importance of finding ways to communicate with customers digitally — without jeopardizing the quality of customer service.
As a marketing tool, SMS has many advantages. It’s versatile, measurable, and dynamic. It has an impressive 95% open rate, 45% response rate, and 32% conversion rates. With SMS, customer attention is captured in a manner that traditional channels like email cannot. According to the data cited by Digital Marketing Magazine, 75% of consumers prefer to receive promotions via text message. Despite this, there is no one-size-fits-all texting solution. The difference between demographic groups and even the product or service being offered must be considered before creating an SMS marketing strategy.
How can community banks and credit unions use SMS to cultivate customer engagement?
As effective as SMS texting is, it isn’t a magic wand. There are a few best practices that enhance its efficacy. When applied correctly, texting provides brands with an opportunity to guide and manage existing customers throughout the entire buying process. It’s not uncommon for texts to be one-way communications, but in a perfect world, your solution would enable consumers to use SMS to respond and, in turn, increase customer engagement. By using SMS as a customer engagement tool, brands are able to demonstrate their commitment to their customers by providing them with a direct line of communication that allows them to connect with customer representatives who can answer questions and resolve issues at every point in the buyer journey. Here are some good practices to follow:
Promote brand awareness
When people sign up for your newsletter or opt in for SMS communications, there’s a chance they forget who you are as a brand. A deliberate engagement strategy prevents this from happening. In order to build brand awareness, direct and indirect communications are necessary. But many potential customers are unaware of these brands and their products and/or lack the motivation to become familiar with them on their own. The purpose of brand awareness campaigns is to cultivate leads, increase traffic to websites, and improve brand equity and identity. Data and analytics can be combined to create awareness about unique promotions and to notify customers via SMS — reducing the likelihood of missed opportunities on both the customers' and businesses' ends. Using text messaging can help businesses build personal relationships with their customers by interacting with them more continuously on their preferred channel.
Turn a curious shopper into a customer
Text messaging can be used to acquire customers and provide them with the exact solution they’re looking for. It’s often the case that customers don’t act on their own, even when given the opportunity to do so. Brands have a responsibility to nudge and nurture potential deals in order to ensure their closure. As long as the consumer does not possess an underlying motive, it’s up to the business to sustain the sale. Research has shown that 90% of messages are read within three minutes of receipt. The use of text messaging allows businesses to reach out to reluctant customers in a direct and impactful way. With this tool, businesses can reach customers and offer cross-sells and promotions, as well as nurture and close sales. If a two-way interactive communication is available to the customer, they can ask questions and receive quick answers without having to call customer service just to be put on hold.
Facilitate the onboarding process
In general, customers are greeted with a welcome message following the completion of the sign-up process. The brand communication, however, tends to cease shortly thereafter, leaving the customer to fend for themselves following the transaction. This is especially true in the financial industry, where onboarding is often the most challenging part of the customer journey. Community financial institutions must constantly adapt their systems to ensure compliance with regulatory requirements. This can be challenging since they must also inform their clients of these changes and update their onboarding processes as a result. In this situation, text messaging can be used to follow up with customers during and after the onboarding process and communicate next steps.
Boost customer retention
Customers who are happy and engaged are more likely to return. With text messaging, businesses can leverage the contextual history of their customer relationship to create personalized and meaningful messages that are relevant to each individual customer. McKinsey's study found that 71% of consumers attribute value to businesses that tailor messages to meet their individual needs. When people want to speak to a brand, but cannot contact anyone or receive generic automated responses, they become frustrated easily. People prefer interacting with people rather than machines — and SMS brings that human element back to customer support.
Clearly, SMS offers a great deal of value in the context of customer engagement, and can also be leveraged in many other ways than those listed here — but that’s not the end of its advantages. To explore SMS's full potential as a customer communication medium, it’s imperative that data and analytics are captured and analyzed in order to deliver targeted value to customers. The era of mass messaging is long gone. Not all businesses can handle this task alone, and most will require the assistance of a fully compliant text messaging platform that specializes in direct and personalized communications capable of engaging and interacting with customers every step of the way.
Making SMS work for your financial institution.
The first step in leveraging SMS for any of the strategies outlined above is to be deliberate. What are the goals your business is striving to achieve? Identify SMS key performance indicators (KPIs) that will be used to measure effectiveness towards the goal. How much resource, personnel, time, hardware, and software will be required? By answering these questions, businesses will be able to leverage SMS to meet their needs most effectively.
Statflo provides the leading compliant one-to-one business messaging platform that enables financial institutions to have productive, two-way conversations with their customers over text messaging. With seamless integrations to existing CRM/core systems, full consumer context, and rich shareable content, consumer-facing teams have all the tools they need in a single platform to engage, retain, and grow their consumer base. Learn more.