R U GR8T @ SMS? Texting Is an Underutilized Customer Engagement Tool

Customer Engagement
Customer Experience
Actions in today's business world are driven by what consumers are doing, Clickatell CEO Pieter de Villiers noted during a recent conversation. And what they're doing more than ever, he said, is using their mobile devices.

Actions in today's business world are driven by what consumers are doing, Clickatell CEO Pieter de Villiers noted during a recent conversation. And what they're doing more than ever, he said, is using their mobile devices.

"We firmly believe that mobile becoming the primary means of customer engagement, especially in many emerging markets," de Villiers said. "The mobile device is the first thing switched on in morning and last thing switched off before bed. From a footprint perspective, it dwarfs anything else out there."
As that footprint grows, mobile ad spending will grow with it. According to de Villiers, SMS traffic is expected to double from five trillion messages in 2009 to 10 trillion in 2014. And as "cool" as smart phone apps may be, they currently exclude about 95 percent of mobile device owners, he said. However, the simple text message reaches almost all of the 5 billion devices worldwide. "If you want to be relevant to all users, you have to think beyond apps and you have to get relevant with SMS and voice," de Villiers said. "Whether it's a text message from school or a tracking number for a courier, SMS is about getting information to an individual at the right time with the right relevance."

Considering the relationship (i.e., dependence on...) consumers have with their mobile devices, "being a brand and having permission to contact customers via their mobile device to initiate conversation is impactful and important," de Villiers said, adding that the average SMS open rate is 100 percent, while email is a fraction of that due to its overuse and abuse. Additionally, the average user takes less than four minutes to open an SMS; much sooner than email. And because SMS has a cost associated with it, spamming is limited at this time.

"SMS should coexist with other marketing," de Villiers advised, noting that for some firms it's not always clear how mobile best fits with other channels. "We're seeing comprehensive strategies beginning to evolve as companies come to grips with what mobile means for them and their customer engagement. It used to be about promotions and marketing, but the market has matured considerably in terms of the art of the possible. It's no longer just a marketing channel; it's now a customer engagement channel."

de Villiers cited several examples of the benefits of using SMS:

  • Companies can reduce calls to the contact center up to 20 percent by through proactive service (e.g., SMS alerts and confirmations).
  • Organizations can embed sales offers in service alerts, like selling travel insurance via mobile alert for a flight status update.
  • Fee and transaction notifications and real-time receipts can improve the customer experience, as well as reduce fraud. One bank reduced fraud by 40 percent, according to de Villiers.
  • Business can improve customer loyalty by providing additional services, such as banks giving parents visibility on their kids' use or balance for prepaid cards, or car rental companies sending reminders of when customers need to return their rental car.
  • Customer satisfaction may increase among consumers who prefer transacting by phone, especially when time relevant.

The secret, de Villiers said, is first message, then transaction. Most people don't think of mobile beyond talking/texting; you have to let them know that you have mobile access. "Most people don't run around thinking, 'If I had mobile X it would make my life better,'" he said. "So you first have to establish the connection, 'How do I associate my brand with the mobile device?' Make the connection through relevant priority messaging. Then you can move to transacting."

Currently, financial services firms in general and specifically retail banking are the most successful using SMS, according to de Villiers. He suggested that this is due in part to the pressure these firms are facing to increase loyalty. Travel, transport, and healthcare are next in their successful adoption of SMS, especially in the case of notifications when changes occur. SMS can limit no-shows and improve efficiencies. Some U.S. physicians are using text reminders to reduce by up to 30 percent the $350,000 they lose on average to no-shows, de Villiers said. "Some brands really get it," he said.

"Mobile is ubiquitous, immediate, and always on. The engagement rate is exceptionally high. Look beyond technology to, 'What do customers want from me via mobile?" de Villiers recommended. "Companies have to figure out their mobile strategy now. There's a renaissance out there."