Nigel O'Dell, client manager at HP Exstream, explains why communicating with customers via SMS can build satisfaction and maintain customer retention.

Consumers and employees are now more mobile than ever. They expect communication directly to their tablet or mobile device and access to customer services 24/7. As a result customer communications are changing – from retail banks and mobile phone companies encouraging customers to receive statements and bills via email instead of post, insurance companies informing customers of renewal offers by SMS message instead of post and travel companies using social media to respond to customer complaints.

Although some industries have quickly adapted their customer communications to online and mobile channels, many businesses are surprisingly slow in adopting new forms of communications even though it has proven to improve customer retention levels and reduce costs. There can be a variety of reasons for this – from inherited legacy IT systems and limited budget for new investment, impact of mergers and acquisitions and time to integrate CRM to apparent limited need with evidence of satisfied customers. We estimate there are currently only about 10-15% of communications being delivered in electronic channels. Having said that, we do expect this number to steadily increase.

SMS messaging

Faced with an increasingly challenging market, businesses including utilities companies, banks and teleco organisations are coming up with innovative ways such as communicating via SMS to ensure customer satisfaction and maintain customer retention.

Historically consumers have been reluctant to change either their energy service provider or their bank account. On average only 8% of people switch their current account per annum and you are more likely to get divorced than you are to switch your utilities service provider. However, this is all set to change, with the challenging economic climate consumers are for the first time willing to shop around to ensure they get the best deal on rates and customer service. Organisations need to take heed and make the best of communications to ensure customer loyalty.  

According to a 2011 survey by Ovum a record 7.5 trillion SMS messages were sent that year which shows the continuing popularity for all types of communications. We’ve had SMS messaging integrated in the customer communications management (CCM) systems for several years, but in the past two there has been a dramatic increase in the number of consumers demanding communication via SMS.

SMS messaging has enormous benefits to customers when its in the form of vital alerts, for instance banking companies might use CCM if a consumer was on the verge of their overdraft, or for utilities companies SMS updates can provide pre-emptive information, for instance if there was an upcoming power outage due. Companies also implement CCM in the form of links via SMS when an invoice or a statement has become available on their personal portal, most customers are then able to instantly access this information using their smartphones.

Data security concerns

Despite the clear business benefits and the growing demand from consumers for more mobile communications, there are still some industries – such as retail banking and utilities – that have to actively encourage customers to make the transition from printed communications to mobile transactions.

The main reason for this, aside from having to change habits, is the worry about data security. Data security is a challenging issue because mobile devices including laptops, smartphones and tablets are no longer locked up in the user’s house and are more susceptible to theft. To prevent data being exposed to third parties in case of loss or theft, security needs to be addressed before adopting any type of CCM solution.

Customer communications management

CCM is the next level of customer relations and solutions are on the market designed to easily integrate with an existing CRM system and customer analytics to enhance a company’s overall sales and marketing activities. The missing element that CCM provides is the ability to develop a more personalised experience for the customer and tailor communications to a way that is convenient to them ensuring a better response rate and greater return on marketing investment. 

Consumers and employees are now more mobile than ever and expect communication directly to their tablet or mobile device. This means that multi-platform communication is now an essential tool for companies aiming to reach a high level of customer satisfaction. According to the 2011 Ovum survey between January and October smartphone usage rose from 30% to 45% of the population. The use of mobile is a key change in the way we communicate. This has meant consumers are demanding access to their information, including bank statements and bills across multiple mobile channels.

As a result, every industry needs to design their communications platforms to contact customers across a variety of channels and formats, including SMS messaging. 

Nigel O'Dell is client manager at HP Exstream.