The power of SMS: How brands can build strong customer relationships in the digital age

By Andy Gladwin, head of partnerships, Marigold

In today's increasingly digital world, businesses are recognizing the immense power of SMS (short message service) for engaging with customers. One of the initial hurdles faced by many is building an audience to communicate with. So, how can businesses overcome this challenge and unlock the full potential of SMS?

Mobile devices tick off almost all the boxes needed to develop a personal relationship with customers and collect useful zero-party data. They’re incredibly personal, with the ability to provide such detail as location and status. They offer immediate feedback, and most people have their mobiles on them at all times. And they offer a wide range of responses, from SMS replies, to phone calls, to app integrations.

How brands can successfully utilize SMS

The first step lies in establishing a value proposition that resonates with the target customer. It's not just about technology, but rather it's about offering something compelling that makes customers say "yes." This value proposition can take various forms, such as joining a loyalty program for exclusive benefits or gaining early access to sought-after tickets. By focusing on the value customers derive from the relationship, businesses can lay the foundation for successful SMS communication.

Next, it's crucial to identify the touchpoints where customers are receptive to engagement and can influence others. By following the eyes, ears, and thumbs of customers, businesses can ensure their presence in the right places. Whether it's through QR codes, short codes, or other means, brands can create doorways for customers to consume value in any environment, be it on the radio, TV, advertising boards, sports pitches, in-store, or even on a drink.

Marigold, for instance, stands out by providing technology that enables short codes, keywords, QR codes, web forms, and immersive experiences. With a deep understanding of clients and their customers across various industries and geographies, Marigold ensures compliance while growing the customer base and fostering powerful ongoing relationships.

Why SMS is so effective

One of the remarkable aspects of SMS is its effectiveness in cutting through the noise. Messages are typically responded to within 90 seconds, making it ideal for time-critical services like two-factor authentication, fraud alerts, and appointment reminders.

But to ensure impactful communication without being invasive, brands must honor what customers signed up for and respect their preferences. By enabling customers to share their preferences directly and gaining insights into their desires, brands can personalize their SMS engagements effectively.

Advantages of SMS for brands

Starting with opt-ins and keywords, brands can initiate a process of learning more about their customers' preferences. Marigold's ZPD (zero-party data) solution, called Experiences, enables brands to gather valuable insights and deliver rich, engaging, and interactive interactions. By leveraging this information, brands can enrich customer profiles and maintain ongoing relevance in their engagements.

When it comes to return on investment (ROI), SMS offers several impactful use cases for businesses. According to data from Infobip, promotions sent via SMS can achieve conversion rates of 2-8%. Delivery notifications can reduce missed deliveries by 15-35%, while appointment reminders can decrease missed appointments by 10-30%. What’s more, customer care can benefit from a 10-20% reduction in inbound calls through SMS auto communications, and payment reminders can help decrease late payments by 7-9%, according to the same source.

Marigold supports organizations beyond the technology of sending SMS messages. With ROI calculators and best practices guidance, we help clients identify opportunities for revenue growth and optimization. By optimizing the timing, content, and cadence of messages, businesses can enhance their results and achieve better outcomes.

Centralization is another crucial aspect of SMS management. By removing silos and centralizing channel management, businesses can experience a 10-20% increase in customer lifetime value (CLTV) and conversion rates, according to McKinsey & Company. Centralization brings together operations, invoices, account management, and reporting, offering a seamless and efficient customer experience. It also ensures that communication channels align to provide a holistic brand experience.

Here are four key takeaways to leverage SMS best:

1. Value exchange

To establish effective communication with audiences, gain consent and understand their true interests, start by identifying your organization's value proposition, and offering customers a compelling reason to engage with your brand. This value exchange can take various forms, including convenience, better service, information updates, exclusive content access, and more. By creating a mutually beneficial value exchange, you lay the foundation for long-term customer engagement.

2. Real-time context

In today's digital marketing landscape, delivering the right message to the right person at the right moment is paramount. Mobile devices play a crucial role in achieving real-time, relevant, and impactful customer engagement. By leveraging mobile channels, you can tailor your communications to match the customer's context, preferences, and behaviors, creating personalized experiences that resonate with them.

3. Integrate programs

Enrolling customers in a loyalty program doesn't automatically make them brand advocates or ensure your brand is their top choice. To cultivate long-lasting customer relationships, it's crucial to break down silos and integrate your marketing efforts across various touchpoints. By aligning your messaging, experiences, and rewards programs, you can provide a consistent and cohesive brand experience, fostering customer loyalty and advocacy.

4. Know everything

Effective communication with customers relies on having access to key data sources and the right tools to leverage that data at scale. To truly understand your customers and engage them in meaningful ways, invest in robust data analytics and customer insights capabilities. By gaining comprehensive knowledge about your customers' preferences, behaviors, and needs, you can deliver highly personalized and targeted mobile marketing campaigns that drive advocacy.

Clearly, mobile marketing and SMS have become critical tools for businesses seeking to create meaningful relationships with customers. By collecting zero-party data and mastering the value exchange, businesses can build stronger customer relationships, foster brand loyalty, and ultimately turn customers into passionate advocates for their brand.

Learn more: Watch the Five Pillars of Value Behind the Marigold SMS Solution video to see how how it helps marketers build more meaningful customer relationships.