Why SMS Is The Medium For Customer Loyalty{2023} Read Here!

Why SMS Is The Medium For Customer Loyalty
Why SMS Is The Medium For Customer Loyalty

Imagine a channel for marketing where you could have messages read by a majority of your customers within three minutes. SMS is one of these channels and that’s why brands are finding that it delivers 15% more ROI than conventional methods, but it has to be handled correctly.

The economic climate is challenging the Australian retail industry. Customers are becoming more selective in what they purchase, and retailers must figure out how to keep customers engaged during moments of uncertainty. Furthermore, the shift in customer behavior puts the pressure on profits from operating which is reducing budgets and imposing an ” do-more-for-less” strategy for marketing.

Finding the funds to invest in expansion, innovation and product development is hard, yet increasing an online footprint is never more important. Based on Shop Association ANZ 9/10 of us are now engaged in hybrid shopping, which involves moving between stores that are both physical and online prior to making an purchase.

Although the pandemic triggered an ‘all-costs-grow’ strategy that was adopted by companies in the world of e-commerce however, there has been a shift towards retention marketing in the past six months. In an earlier eCommerce survey conducted by Yotpo they discovered that 52% of companies have a greater focus on retention than in the past however 70% of respondents reported that their retention rates had either increased, or decreased over the last year.

Then where’s the gap?

To build a loyal customer base customers is a lot more than the standard email that every business sends. Customer loyalty is based on personalisation, and in reality it is possible to argue that personalisation and loyalty programs are two different sides of a coin. In a speech from 2000, Jeff Bezos commented on the concept of personalisation as he described it:

“You go into a bar and sit down, and the bartender puts a whiskey in front of you without having to ask what you want”.

For retailers, you might think that this means I’ll need the perfect offer or personalized present. However, there’s a benefit that the bartender has that retail marketing do not – because they’re face to contact, so we must make use of a means to communicate.

What I’ve observed is that companies who adhere to the traditional methods of marketing via email are losing ground, and that’s why they’re witnessing retention rates decrease or plateau. Marshall McLuhan may provide a hint as to the reason for this because it’s the medium email that’s the problem. Whatever the personalization of the contents of an email is, the countless promotional emails we receive have made it clear that the email medium isn’t personal.

It’s not to say that email isn’t important however, when a company wants to improve loyalty to customers, it is important be thinking beyond the content or deals, but also about the method you’re using to reach the most loyal clients.

Creating highly customized shopping experiences by using SMS

One of the main concerns retailers have about using SMS as a marketing channel is that it’s not personal enough. In order to build customer loyalty, it is essential to make the experience more individual. The data is shockingly contrary to the expectations of many. As per Shopify 75% of young people are spending more than six hours per week online shopping and are more likely to use text message messages over emails.

To add to that to this, the fact that there are 269 billion emails sent out each year, with approximately 50% of them being spam. This is that texting is a great way to boost engagement than emails and is the reason that nearly all of the companies I work with regard SMS as their primary revenue-generating channel.

What does this look like in real life? The first step is to create optimal customer journeys that don’t stopping after your first transaction. The bow tie marketing funnel places as much emphasis on the post-purchase experience as it does on acquisition. After you’ve gained an existing customer, what’s the next step? Reviewing the product? Joining an loyalty program? Doing a repeat purchase, or registering for an ongoing subscription?

After you’ve constructed these paths, now you must connect all the information points that you have on your client and develop segments and flow of communication which drive actions.

At Yotpo we allow brands to boost customers to stay loyal, every day. However, the primary goal that our clients are able to achieve is the creation of the loyalty program.

The creation of a loyalty program that feels as the community

The numbers of loyalty programs are attractive. A 2020 study conducted by McKinsey discovered the 59% who are members who are loyal tend to prefer the brand they prefer over competitors and 62% of them say they’re most likely to make more purchases.

However, the most significant opportunity for brands is to create the feeling of being part of a community. The crucial element to achieve this is regular personal communications, so that they feel like they have a one-to-one connection with the company.

The idea of having to keep in touch with each customer could send a marketing professional to a state of stupor! However, it’s much easier thanks to the tools and technologies today available. The first step is to establish the plan where you determine and automate the most important elements of communication. For example, when a loyalty member joins for the first time, they will be notified of they’ll be able to tell you that has just occurred. They’ve also received updates on points, and expiration dates.

This is a further reason why companies are seeing that SMS, because the majority of messages are read in 3 minutes, is allowing only in-time messages so customers don’t miss urgent messages.

It’s a field in which I am working closely with my clients by using shortcodes and loyalty data points to create strong customer journeys that make a an impact on engagement with loyalty and retention.

How to get more value from loyalty programs

The loyalty programs are complicated and resource-intensive with many stakeholders involved in the design process, therefore it is crucial to set them up properly – which implies that customers actually redeem.

Based on our research We can see how loyalty-redeemers are spending 89% more on non-redeemers, and there’s an increase of 164% for repeated purchases vs. non-redeemers. The primary objective of the loyalty programme is to have members to redeem points.

So how do the companies I work with succeeding? 

It’s through SMS and the way to communicate to their loyal clients. Our global customer base, have the ROI of SMS loyalty messages as high as 80x. Furthermore, enabling no-login redemptions that allow you to the click of a button to redeem through SMS, the daily rate of redemption increases between 5-10x.

The world is always changing and the days of an “growth at all costs” mindset for eCommerce companies are long gone. The companies that are able to manage their acquisition efforts by focusing on retention, will be the ones to win.


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