In an ever-growing landscape of customer service options, users are growing more accustomed to having access to their finances in the kinds of places they’re already comfortable with using. Gone are the days of needing to drive down to your local branch just to check your balance or make a deposit, and many financial institutions are even shunning the need to call in or send an email to get banking information, too. Customers and members are seeking the path of least resistance to getting what they need, and this has caused a rise in use for SMS customer service.
With the ever-growing importance of digital service channels, SMS is a key component in the utility belt of many contact center teams. Sending important messages right to the cell phones of their customers is a useful asset to have. However, there’s certainly a lot more functionality to SMS customer service than meets the eye, and when paired with other powerful digital service tools, it can go from a useful feature to a game-changer.
SMS Messaging by the Numbers
One of the most compelling statistics regarding SMS customer service is the open rates: With a 98% open rate (vs. around 20% for email), SMS has a much higher guarantee of getting that message to the recipient.
SMS is a familiar channel for many users, especially younger demographics, who check and respond to their texts with much more frequency than other messaging channels: According to The Financial Brand, 42% of Millennials check their texts more than 10 times a day and 60% of all consumers check texts within 1-5 minutes of receiving them. This article also shows that 41% of financial customers want to see their financial institutions communicating to them via text. According to G2, 90% of consumers respond to texts within 30 minutes and 58% consider SMS the optimal way for businesses to reach out to them.
This is true in the world of insurance as well: According to our report, The Independent Agent’s Report Card, 50% of agents 45 or younger want to communicate with their carriers via SMS. Younger insurance agents are seeking out more modern digital channels just like customers or members of banks and credit unions are, and the convenience of SMS can’t be ignored.
The numbers make it clear that SMS customer service is a valuable channel to prioritize, with high open rates and how open many customers are to receiving them. With these growing preferences, it’s up to financial services to adapt to the times and embrace the solutions that users are looking for to remain competitive. If you don’t, someone else will.
Key Uses for SMS Customer Service
There are a number of key areas where financial services often find success using SMS to communicate with their users. While not every interaction between a financial institution and their customers can be easily done over text, there are a few proven ways that this channel has often been used successfully in the past:
- Account Alerts: Due to how fast they can be sent and how quickly most users read them, SMS is a great way to send important messages regarding account activity. This includes account balance notifications, transfers or deposits, suspicious activity alerts, and more. While you can’t always rely on a user checking an email, you certainly can rest assured that they’re reading their text messages.
- Payment Reminders: SMS is a great way to quickly remind your users to do things like pay bills or make credit card payments, as texts are often unobtrusive yet quickly read, ensuring they’ll be properly reminded when the time comes.
- Customer Support: You can use SMS customer service as a way for users to skip the lines and reach out via text. This can be a great alternative to putting a user on hold, giving them a more comfortable way to reach out to support without needing to wait around for a live representative to give them their full attention all day.
- Special Offers and Promotions: SMS is a popular channel for sending users special offers, due to the high open rate that these messages see when compared to emails. Ensure that your customers are aware of your latest deals and promotions with a quick SMS message to pique their interest.
The Advantages of SMS Customer Service
SMS has been widely adopted by many financial services companies, and it’s no surprise why. There are many key benefits of deploying text messages in your customer service cadences as often as deemed appropriate:
- Open Rates: As already stated a few times, customers check text messages much more often than they do emails, and are much more likely to reply to them as well. As far as ways to reach users goes, SMS is one of the most successful.
- Cost Effectiveness: Sending bulk text messages is cheaper than other methods of communication, and with the open rate you see on them you’re much more likely to get a better ROI.
- Customer Satisfaction: Many customers have shown a preference for receiving SMS updates and having the option to reach out via text message. When provided with the options that they’re looking for, you can expect more satisfied customers.
- Scalability and Automation: It’s very easy to scale with SMS, with sending text messages in bulk having less complexity than other forms of communication. It’s easy to set up automations for SMS messages as well, and you can even set up an AI-powered chatbot to respond to incoming texts.
The Main Challenges for Customer Service
While SMS is useful for many different scenarios, there are a few occasional drawbacks that lead to some scenarios where the channel falls short. However, there is one easy way that you can guarantee that your SMS experience can avoid these issues: By ensuring that your customers always have an easy way to switch to a new communication channel when needed.
One noticeable flaw with SMS is that it is not a secure channel: Messages sent by SMS aren’t encrypted, and pass through 3rd parties to get to your customer. Therefore, you can’t send anything with potentially sensitive information through text. You’ll need to make sure that users are given a way to switch from SMS to a more secure channel, such as authenticated online chat or a phone call, to discuss anything with revealing information.
There’s also the fact that SMS may be good for short and simple conversations, but can prove to be lacking when a lengthier, more complex situation is presented. This requires SMS customer service to have an easy way to transition to a more complex channel when needed, which presents its own set of challenges. This awkward channel transition phase often causes unnecessary disconnects in the service experience, which can create awkward moments of customers needing to repeat themselves.
SMS is also, unfortunately, a common target for scams and impersonations. Bad faith actors often impersonate financial institutions in order to perform phishing scams on potential victims, requiring those who wish to take advantage of this valuable channel to ensure their customers are well educated and informed on how to avoid these scams, like using the same phone number that users can learn to trust for all communications.
SMS Customer Communication Best Practices
To ensure a successful experience with an SMS customer service platform, there are a number of steps to take into consideration and ensure are at the forefront of planning. Here is a short list of some of the major considerations that you should be keeping in mind when thinking about implementing SMS customer service:
- Ensure Compliance: Financial services are part of a well-regulated industry that keeps security at the forefront. As SMS is traditionally not a secure channel, this means that when looking for a potential vendor to provide this service, you’ll need to find one that has the security needs of finance in mind.
- Make it Opt-In: It’s a good practice to ensure that your SMS messages are opt-in for your users, rather than mandatory. Some people will not want to receive text messages from their bank on their personal phones, and may feel uncomfortable with the prospect. To avoid bad experiences, make sure that customers are given the opportunity to opt in to these messages so they have control over the channels they prefer to use.
- Keep Messages Short and Infrequent: SMS is, as mentioned, best for quick updates or messages without too much complexity. People won’t want to be sent huge blocks of text whenever their bank messages them, so make sure these messages are quick and to the point. You’ll also not want to send too many unnecessary messages this way, or allow customers to adjust what kind of messages they’ll receive from you.
Conclusion
SMS customer service is much more than an afterthought or a nice-to-have: It’s a powerful communication tool that can get the information that you need to deliver into the devices of your customers. It’s one of the most reliable channels for getting a message read and responded to, and is frequently one of the most requested offerings by customers for getting in touch with their financial institution. The statistics surrounding SMS should be compelling enough on their own to take this seriously as a truly valuable communication tool.
It’s important when looking to implement SMS customer service, however, that you find a solution that works for your financial institution. Glia’s own SMS Tools allow you to take advantage of this crucial messaging channel while seamlessly integrated with the rest of a customer service ecosystem. With financial-grade security protecting the back end, customers can seamlessly transition from SMS to a more secure channel when needed, without needing to restart the entire interaction all over again.
Don’t let the benefits of SMS pass you by: book a demo with us and see our SMS solution in action.
