How to use SMS to retain customers

You spend a significant amount of time, budget and effort attracting new customers. But what are you doing to keep them? With a sleigh full of new customers around the corner, this week we’re looking at SMS and customer retention - why customer retention is so important and how SMS can help you to boost it. 

The importance of customer retention

So what’s the big deal about customer retention? Someone came, they bought, job done? The majority of marketing spend, blogs and even talks are focused on attracting new customers through SMS, SEO, social media and some other new style. 

This focus is your secret weapon against your competitors because retaining customers enables you to benefit from:

- Cost-saving - acquiring a new customer can cost between 5 and 25 times more than keeping an existing one because you’ve passed the initial tests of trust, quality and service.

- Profit boosting - increasing retention by just 5% increases profits between 25-95% as existing customers spend more and buy more often.  

- New customers - word of mouth recommendations from existing customers drive 20-50% of others’ purchasing decisions. 

Sounds great, and it gets better. Customer retention can be as simple (and as cheap) as a single SMS message. How? Let’s take a look. 

How to use SMS to retain customers 

If you’ve read our SMS blog before, you know the drill: SMS is a powerful communication channel that has a 90% open rate in an average of three minutes. This power can be used to retain customers through:

1. Customer support

Nearly half of people will take their business elsewhere within a day of experiencing poor customer service. SMS is an easy way for you to provide customer service and for your customers to access it because:

- It’s accessible - customers can use it while continuing watching Netflix; 

- It’s cost-effective - your staff can handle multiple queries at once; 

- It’s immediate - you can quickly solve customer issues; and

 -It can be both reactive (“Sure, I can help you with that.”) and proactive (“Hey Ralph, how are you getting on with your new baby carrier?”)

Further reading: SMS customer service 101

2. Engagement

More than half of people will leave a brand because they ignore customer feedback - showing you how critical customer engagement is. Text messages can be used in a variety of ways to communicate with customers (and remind them about your brand) post-purchase, in a way that’s engaging rather than annoying. For example, you can send:

- Product polls;

- Feedback requests; 

- Product recommendations; or

- Tailored promotions. 

Further reading: SMS surveys

3. Ease

The human brains love ease - it’s why takeaways are so popular, why pre-made mash exists and why Alexa is so busy. Certain SMS campaigns make it easy for customers to remain loyal to you, rather than researching your competition. For example, you can:

- Remind customers of their family car’s MOT expiry and offer to book them in with a simple “YES” reply;

- Confirm an upcoming baby yoga appointment and ask if dad or mum prefers coffee or tea; or

- Notify customers of an upcoming nursery payment and send them a URL to quickly pay. 

Further reading: Appointment reminder text messages

How not to use SMS to retain your customers

We can’t mention the ‘dos’ without covering the ‘don’ts -’ especially when there are a couple of SMS faux pas that could lead to customer abandonment. Specifically, don’t do the following:

1. Spam

No one likes receiving spam, even if it is sent in text message form. Avoid being labelled by your customers as junk by tailoring messages to your customer’s interests, past purchases or even personal details and always offering a simple way to opt-out.

2. Generalise

80% of customers will become a repeat purchaser after a personalised experience. Avoid sending generic bulk messages by using custom fields to personalise your bulk SMS messages, and avoid generalising your audience’s communication preferences by offering a variety of communication channels including SMS, email and telephone. 

3. Ignore

SMS is a two-way communication channel, so treat it as one. If you’re asking customers to report problems via SMS, don’t ignore their messages; if you’re sending a marketing SMS, ensure that it offers value to that customer; and if you’re running a poll on the top baby names, don’t leave us waiting for the answer. 

Our final thoughts

Customer retention is important for your business and speaks volumes about your brand. Get customers to stay with you and shout about you with these top SMS retention suggestions.