SMS Marketing in the Financial Sector
With the rapid increase in technological development that defines the 21st century, companies across all sectors are looking for ways to stand out from the crowd. In the modern, technological economy, a company’s ability to connect with its customers and provide top-quality user experience (UX) is fast becoming an essential component of any successful business.
Customers now have the ability to thoroughly search the market to find a company that can provide them with the best possible deal. In a corporate environment that is more competitive than ever, what is the best way to truly stand out from the crowd? One of the fastest growing techniques is the use of SMS marketing.
A growing trend
Financial institutions are always on the lookout for new techniques to differentiate themselves from the competition, and the rise of SMS marketing is no different. SMS banking was initially launched way back in 2004, and banks around the world now send more than 1.3 million text message alerts to customers on a daily basis. The power of communication within the financial sector is incredibly powerful, with customers wanting clear, concise, and secure ways to keep in touch with their financial institution of choice. When it comes to money, information is king, and there is clearly a clamour amongst customers for a greater amount of SMS communication.
With the widespread use of smartphones in the 21st century, almost all customers have the ability to send and receive SMS messages. Whilst the use of banking and finance apps is also an essential component of a successful finance firm, an SMS channel of communication is easily accessible to everyone, and thus should be a priority for banks and finance firms everywhere. When a bank or finance firm remains in contact with a customer through SMS channels, the customer feels valued and cared for, a sentiment that is essential if a company wishes to grow their customer base.
By using SMS marketing services, banks and finance firms can develop a more intimate relationship with their customers, whilst also retaining a high level of security, an essential component in any financial company. If a firm includes a two-factor confirmation in their SMS services, they can achieve this goal with ease; when a customer makes a change to their account or engages in a large or unusual online payment, they will receive an SMS notification from their financial institution that prompts them to send a security code through an SMS channel. This code is then entered into the system in addition to their normal banking password. This dual-channel authentication enhances the customer’s bank account security, whilst also providing a much higher level of communication than would otherwise have been achieved without SMS services.
Customers who have a high level of communication with their financial institution, whilst also retaining a high level of security, will feel more satisfied and at ease with the experience of dealing with their chosen institution. SMS marketing services will soon become the norm across the financial sector, and as the ability to communicate increases along with the level of security in SMS services, it is a trend that companies cannot afford to ignore.
Applications of SMS services
SMS marketing services and the financial sector are a near perfect fit. There are plenty of instances when an SMS message from a financial institution to a consumer is the most convenient method of communication, and furthermore, a method of communication that is as secure as can be. For example, here are just some of the instances when SMS marketing would be perfectly suitable for financial firms:
- Balance and transfer requests
- Bank security/one-time passwords
- Overdraft/insufficient fund alerts
- “Premium reminder” notifications
- “Premium renewal now due” alerts
- Alerts to new or altered terms and conditions
- Statement reminders
- “Loan application approved/declined” notification
- Documentation request
- “Courtesy/thank you” messages
- Urgent policy expiry notice
- Cross-selling other financial products
SMS marketing clearly has the ability to transform the way financial institutions interact with their customers. However, when any new technological development occurs, it is tempting to apply it across the board, regardless of how suitable the new technology is for that industry. So how suitable and effective can SMS marketing really be in the financial sector?
Increased open rates and responses
A study by The Behavioural Insights Team investigated the impact of financial firms sending SMS alerts to customers to remind them of payments due for debts on overdue tax credits. The results showed that, not only did the use of SMS marketing increase the number of payments made by customers but that personalising the SMS alerts increased the number of payments made even further. When no SMS service was used, only 4% of the debt payments on overdue tax credits were made; when personalised SMS marketing was used, this figure jumped up to 29%.
SMS marketing also has the effect of increasing the utility of other forms of marketing. The open rate on email marketing campaigns has been decreasing steadily for many years, as customers tend to be inundated with a vast amount of emails, and it is easy to miss important messages. However, the open rate for SMS messages is over 98%. One financial firm found that their email marketing campaign open rate increased from 4.5% to 21.3% as a direct result of using SMS alerts to inform their customers that they had received an email.
It is clear then that SMS marketing not only improves company performance indirectly by generating positive customer relations, it also improves company performance directly by improving the utility of all other promotional campaigns.
What are you waiting for?
SMS marketing services have the ability to transform the way financial institutions interact with their customers and, furthermore, the ability to transform the effectiveness of multichannel marketing campaigns. SMS marketing is convenient and simple to use, whilst deepening current customer relationships and attracting new customers at the same time. Customer satisfaction and loyalty are increased, as each customer feels valued and cared for as an individual. Company operational costs are also lowered, as the need for facilities such as call centres is lessened. Moreover, SMS marketing is proven to increase payment rates for charges and fines, whilst also generating much higher responses to other forms of marketing, such as email campaigns. For firms in the financial sector, SMS marketing clearly seems to be an essential component of future success.
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