SMS Customer Service: Talk is cheap. Text is cheaper

OpenMarket – June 13, 2017

Where you’re leaking money in customer operations, and how SMS can plug the hole

One way to make your customers more satisfied with their experience is to just spend more on customer operations.

If you invest in high-quality customer experience campaign tools, CRM systems, great people, great training and great channels, chances are your customer satisfaction metrics are going to skyrocket.

The thing is, you can’t expect those metrics to rise at the same rate as your spending. The law of diminishing returns is at play.

A lot of it comes down to the high cost of most customer experience channels. With call centers you have all the costs of employing operators, integrating and running their IT infrastructure, and paying for the associated call-handling fees. Put together the average call can cost between $8 and $15.

Then with mass email you have all the costs of writing and designing them to a standard you’re happy to put your name to. And even then you can’t be certain your customers will receive or even open them.

At some point, you can throw all the money you like at the most expensive channels, but it won’t make your customers any happier.

Scaling great customer service with SMS

It pays to think about getting the right communication mix. There are things you want to use email for (like cart abandonment). There are things you want to use a call center for (like severe issues). And then there’s a whole range of interactions you can and should be using SMS for.

Using SMS for customer service is different. It’s personal to individual customers, it’s immediate. But it’s also scalable to any customer base.

And best of all, it’s cheap— $0.01 for each text, cheap.

Once each SMS is crafted and the customer journeys are integrated into your CRM and campaign manager, you can automate most of the operational processes. That frees up your customer experience teams (and your budgets) to spend their time on more important things.

Most enterprises use all three channels and more to interact with their customers, and rightly so—each channel has its place. But customer operations teams can make some serious savings just by moving more of their operational interactions over to SMS from voice or email.

The savings fall into two camps.

  1. Savings that come from more efficient operations
  2. Savings that come from more effective communications

Let’s take a look at the main players.

The savings that come from more efficient operations

Fewer call center staff

At $8-$15 a call, call centers are one of the most expensive ways to interact with customers. Yet too many customer operations teams use them for processes where the customer doesn’t need to talk to an agent to get what they need—things like onboarding, appointment-making and feedback.

Automate those processes through SMS and you can run a smaller, cheaper operation. More than that, you can run it automatically. It means staff you retain don’t have to sweat the operational comms so much, and the SMS automation frees them up to focus on your customers’ biggest pain points instead.

Cost-effective two-factor authentication

Two-factor authentication is far more secure than traditional security. But buying and mailing physical security tokens and digital key generators is an unnecessarily expensive way to approach customer onboarding processes.

The thing is, the second part of your two-factor authentication doesn’t need to be a whole new piece of hardware. SMS authentication can do the same job using the SIM card in your customers’ phones as the physical security factor. Your customers already own the hardware. And you can save a fortune in buying and mailing dongles.

Fewer calls to you, and fewer calls to them

Over 90% of texts are opened and read within 3 minutes, meaning it’s much more likely that customers will read them and know exactly where they are in the customer journey. If they know where they are in your process, they’re less likely to call in to find out what’s happening. In a similar vein, SMS feedback surveys are twice as likely to be taken than voice surveys (10% vs 20%). The upshot of both? Fewer $10 calls into your call centers, and fewer $10 outbound calls chasing up customers. Between the two it can save customer operations huge amounts of money in call handling time.

The savings that come from more effective communications

Fewer missed appointments

When customers book meetings and calls, it can be weeks or months in advance. Chances are by the time the appointment comes around they’ll have forgotten all about it. An automated text reminder is all it takes to prevent costly downtime for field staff when they’re left hanging around at meetings that were never going to happen.

Fewer repeat deliveries

Similarly, rather than have delivery drivers turn up at an empty building, it’s much better to text the customer in advance to ask if they’re going to be in.

Driving a truck out to a country house with nobody in it (twice) doesn’t come cheap.

Fewer late payment costs

An automated bill reminder is a win-win for businesses and customers. The customers remember to pay, meaning they don’t get charged late fees. And your business gets regular cash flow without having to go through the expensive process of chasing customers up with calls, letters or even visits to their home. Intrusions like that can lose a life-long customer in a heartbeat.

Sometimes there’s nothing quite like a one-to-one conversation with a real person, and by no means does switching more of your communications over to SMS mean getting rid of your other channels. But if it means making cost savings all across your customer journeys, and getting happier customers for it, there’s no reason not to switch the majority of your customer interactions to text.

Read our use case to find out how other companies are using SMS customer service to streamline their customer operations.

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