eCommerce Customer Retention With SMS Marketing

In this episode, Dimitar from SMS bump highlights the growing importance of SMS marketing for eCommerce brands. He deep dives into the dos and don’ts of running a successful eCommerce SMS campaign.

Revathi Karthik: Hey, folks, welcome to eCommerce 360. Today, I’m joined by Dimitar Toshkov at eCommerce 360, the Growth Marketing Expert at SMSBump. SMSBump is a smart SMS marketing platform for e-commerce businesses. 

Welcome, Dimitar.

Dimitar Toshkov: Hi, welcome, welcome to all your listeners as well.

Revathi: To start off, can you tell us a bit about SMSBump, what it is aiming to achieve for e-commerce businesses?

Dimitar: Yup, sure. We’re an SMS marketing app and our goal is to empower e-commerce brands to be able to make the most out of text marketing for their business, and there are many different ways you can utilize the power of SMS messaging which boasts an incredible 90% open rate and over 35% clickthrough rate, and we have developed many features for using SMS and we’re creating even more and more ways for e-commerce brands to use this fantastic channel, SMS messaging.

Revathi: Yeah, it’s great. So, also, could you let us know, since the inception, right,

How positive has been the adoption for SMS marketing in the eCommerce ecosystem?

Dimitar: Yup. So, just a little bit about SMS, everyone is used to SMS from the start of mobile phone technology and sending SMS messages between family members way before all the other messaging apps like Messenger, WhatsApp, and Viber, but in terms of e-commerce, in the past, SMS was used just by big corporations and it was very technical, I had to have contact with the big phone operators to send messages, it was very expensive, very resource-intensive, very technical, and today, everyone can use the power of SMS.

We have all sizes of clients and stores, we have drop shippers, we have multinational big online retailers, but just to give you an example of how SMS has changed, over the four days of Black Friday/Cyber Monday weekends last year in 2020, our users sent three times more text messages than the previous year, which showed the tremendous growth for SMS as a channel just in 12 months, and our brands that sent SMS messages generated over $23 million in revenue just over Black Friday/Cyber Monday which is an increase of over 638% compared to 2019. This is what our research showed.

Revathi: That’s amazing, that’s a massive growth. So, I also noticed that when I was going over your website, that SMSBump has a lot of native integrations with a slew of e-commerce apps. Do you want to talk to us about it, like

Why do you have so many integrations and how these integrations come into play for e-commerce businesses?

Dimitar: Yup, yup. Well, first of all, it’s important, you mentioned integrations because now, there are more and more solutions for e-commerce stores and I think it’s very important for every provider, every app to be able to communicate with other apps to have this kind of ecosystem, and so you with SMSBump, you can integrate SMS as a communication channel with pretty much everything in your e-commerce stack.

You can integrate it with your reviews, with your loyalty program, even with your customer support. For example, with SMSBump and with Gorgias or Zendesk, which provides customer support platforms, you can have two-way communication with your customers using SMS and SMSBump as the medium, but communicating within the Zendesk or Gorgeous environment, so for example, your customer support agents don’t have to switch between different apps. They can use Zendesk or Gorgeous but they will be communicating with the clients over SMS which is great because imagine someone is on the move and they’re wondering where their package is, and they can just send an SMS to the store and ask, “By the way, where is my package?” and the customer support agent can reply straight away with this integration.

So, I think apart from a marketing channel, it’s important that we see SMS, for the bigger picture, it is a really fast and immediate way to communicate with clients, and it’s not only one way but also, you can have conversations with your clients over SMS.

Revathi: So, when you talk about conversations with clients, right, so e-commerce businesses have always had conversations with clients but they have not been as personalized as now, right? So,

Personalization has been a watchword for a long time in e-commerce. Do you think SMSBump is helping brands turn those dreams into reality with text or messaging?

Dimitar: Yeah, yeah, for sure. This is a great question. I think personalization is the key to success for marketing nowadays. Ideally, you want to segment your customers and send them relevant content at the right time and to make sure the copy is highly personalized for them, and we help e-commerce companies know those aspects with customer segmentation.

In SMSBump, you can create tailored automations and what we call ‘flows,’ which are just sending automated messages based on customer segmentation, and of course, to add to that, you can add personalized attributes like person’s names and what they ordered, and items, so you can really make them feel that the messages are specifically for them.

For example, you can have an automated upsell communication, so for example, you buy some, like you buy a backpack from a store and they send you an SMS message saying, “Oh, by the way, we have the same handbag, the same designed handbag as this backpack. Would you like to order this as well with your order?” or “Order it now and you can receive the two orders together, make use of this,” and this is sent automatically and you just set it up once, and you can base products on different collections or you can create any kind of use case, and amazingly, all this is free with SMSBump and all you have to pay is for the SMS messages that are being sent. A few sales here, so, yeah.

Revathi: Yeah, that’s great. So, what you’re saying is very interesting, right? So, we can segment them based on their purchase history or based on the product recommendations that e-commerce businesses want to pro-sell or upsell their customers to, so that’s great, that’s an amazing feature to have.

So, let’s start from the beginning, so say I’m an e-commerce store, right? I’ve started using SMSBump, right, what are the metrics that almost see an immediate impact as soon as you start using SMSBump?

Dimitar: Well, the first thing you’ll find if you research SMS marketing online and if you research SMSBump is we are known for the return on investment, you will receive, this is what we are known for: SMS messaging is very affordable, it’s incredibly scalable, and it’s great for reaching a large of amount customers cheaply.

Of course, the bigger the amount of subscribers you have, the more you see from your initial investment in terms of messages sent, but this is one thing and the other metric that’s important that we use in improvement is the average order value, which is, of course, likely to rise as you have another sales channel to your communication with clients, so if you already have email and you have any kind of ads running, imagine you’re adding just an additional channel where you can reach your customers and reach them on the go because – not just on the go because everyone is with their phone nowadays all the time, so it’s a great way to earn additional income.

Revathi: So, it’s great that you mentioned ROI because when I was going through the case studies of business that have been using SMSBump, right, so I see that the claim is a whopping 10x ROI, so how do you assist businesses to hit such a milestone? 10x ROI is like, off the bat, it’s too exciting, it’s almost impossible.

How does SMSBump help businesses achieve a 10X ROI?

Dimitar: Yup. Well, here, I can talk about a couple of key things that we do. One way we do this is through our automation, so like I said earlier, you can send automated messages like, for example, abandoned cart reminder, welcome messages, customer reactivation text, and have all this running on autopilot, so you just set this up one and let it do its work and to have a whole library of such pre-made automations that are really effective in generating sales and customer engagement, so once you set them up, SMS messages are sent automatically to the customers at the right time.

I’ll just give an example, we calculated abandoned carts automated messages in 2020 resulted in revenue for over $5 for each of our clients, so each message generated, over $5. Something else that helps achieve great ROI is obviously sending the right message to the right audience when you build segments for customers based on specific characteristics. With this segmentation, especially when you automate it, you can send some messages to customers based on what they bought when they last shopped, what products they viewed, one what occasion did they buy, if it was on a specific holiday or e-commerce event, you can check other segments that you have created, if they’re your loyal customers or if they haven’t bought in the last 30 days, you can send a reactivation message saying, “Hey, come back, here’s a 5% discount,” for example, “especially for you. You bought some trainers last time. Now, we have great boots for sale this autumn.”

So, you can easily create great campaigns with SMS and you can do this, you can segment your users by any criteria: purchase history, behavior in the store, so it’s great for creating custom campaigns and automations to target specific customers.

Revathi: That’s great. So, it’s great that you mentioned, you send our reactivation SMS’s to your customers saying, “Hey, there’s a 5% discount, why don’t you make this purchase?” or “Why don’t you order this again?” So, that brings me to this question about customer retention rates and CLV, so

Do you think customer retention rate and CLV have gained a high priority over a new customer acquisition for e-commerce?

Dimitar: Yup, that’s actually a great question. It’s very important, these are two very important things in e-commerce nowadays, especially after this pandemic. I think the cost of acquiring new clients will always be higher than the cost of retaining your existing ones.

However, I don’t think you can weigh customer acquisition and customer retention. It depends on what stage your store is at, what your business goals are. Ideally, you would want to focus on growth but also on retention and loyalty also, I think they’re kind of two sides of the same coin, but just circling back, with the increasing competition online, now, we have more stores online, so now, there are more stores targeting your customers, there are more stores in general targeting customers, so it’s worth considering how you want to treat your repeat customers and how you want to treat your customers in general.

So, of course, they are equally important but keep in mind always that there’s a lot of competition nowadays and you’re responsible for your clients and how you treat them.

Revathi: Great, so like you mentioned, because of the pandemic, I think the number of e-commerce stores has surged and also, the fact that a lot of people are heading towards customer retention strategies compared to what they were doing earlier.

Did you see an upswing in the number of users who started using SMS marketing after the pandemic? And if so, do you have a theory as to why they started using more SMS marketing?

Dimitar: Yup, yup, we did see an influx of new customers. I think over two times, so I think it was 250% growth we saw between 2019 and 2020, yup, quite a lot, so it’s just tons of stores opened up and thankfully, because we have a good reputation for our effectiveness combined with the great KPIs that SMS brings as a marketing channel, we have been known to be a must-have app in Shopify and we saw an enormous influx of new customers.

As to why, SMS, in general, gives brands a way to talk to customers, as I said, conversationally and kind of creates personalized communication. It’s a great channel when we are locked at home, we are on our phones and it’s different from just running ads. It’s a little bit different from email also, so it’s kind of, when you’re at home on your phone, you can still connect to a store or to a brand via SMS conversationally, so this may be a factor, but as I said in the beginning, it’s just the effectiveness of SMS in general.

It’s a must-have for any online store, and with more stores opening, it makes sense that they start using SMS. 

Revathi: So, that brings me to this question: when do you think is the right time to implement SMS marketing? Is it right from the beginning, as soon as the launch of the e-commerce store, they should implement the SMS strategy, or do you think there is a specific revenue that they should be generating to start using SMS marketing?

When is the right time to implement SMS marketing?

Dimitar: I think there is a quote, actually.

When is the best time to open an online store? Well, it was 10 years ago, but the second-best time is now, so yeah, I think straight way is the best answer to this question.

If you’re not already using SMS in your online store, just start collecting phone numbers straight away just as you do emails. It’s just because the more subscribers you have, you’ll have the better return on investment on your order by using SMS. You can also create more varied and more interesting segments of your users, you can create more tailored campaigns, automation, and flows, and just make sure you’re not exhausting your subscriber’s list because the bigger your audience, the more segmentation you can have and the more different campaigns you can send without over spamming them, so I think straight away, you should consider, yeah, just like email.

Revathi: So is there a kind of workflow that you suggest for an unsuccessful retention strategy for e-commerce businesses while implementing SMS marketing, like do you have some sort of a strategy for successful retention?

You said you were segmenting it based on the purchases and then planning out SMS at different points in the customer journey, right?

So, Do you have some sort of a playbook where you can help e-commerce businesses plan out a successful retention strategy?

Dimitar: For sure, I’d talk about this for hours, but one of the key things you want to do is first start collecting subscribers as soon as possible and start automating as soon as possible, for example, in terms of collecting subscribers, you can collect subscribers in many ways on your website with a pop-up, with a form on your website, with a button.

One of the other ways is adding also a field in your checkout where people can, as they check out, they can enter their phone number and sign up for SMS messaging, but just make sure you’re collecting those phone numbers and then automate as soon as possible, so like add an abandoned cart reminder, consider adding cross sales and upsells, and just seeing where you can add SMS as a channel to your communication with clients.

There are just countless ways, and because we know that there’s just so much ways that you can use SMS, in SMSBump, you can find rich libraries with automations, with flows that we have seen work and we have, we spent a lot of time actually thinking of new ways you can use SMS, so we create these templates that you can add, and just in terms of retention, it’s making sure that at each step of the customer journey, you’re contacting your clients with SMS without overspamming them.

So if you have a customer who hasn’t purchased in the last 30 days, just send him a reminder message, “Hey, come back, purchase with us,” or if they purchased on Valentine’s Day last year and you have Valentine’s Day coming up this year, just segment people that bought on Valentine’s Day last year from your SMS campaign, then you can send a campaign now and say, “Hey, Valentine’s Day is coming up this year as well, make use of this promo that we have,” just making sure that you’re connecting with your client in all possible ways for all possible communications that you have for your promotions.

Revathi: So, are you using the only email as a channel for marketing, now there are different channels as far as e-commerce marketing is concerned.

Do you think multi-channel e-commerce marketing as a strategy has evolved in recent times?

Dimitar: Oh, for sure, for sure. I think with the depreciation now, the third-party cookies by Google and the constant battles that Google and Facebook are facing with publishers, with countries, with market regulators, with privacy advocates, it’s important to invest in all different channels because if you’re putting all your eggs in one basket, you can lose out a lot if there’s a big change, so in this sense, email and SMS are great because you retain ownership of the channel, you collect the contact details of your clients and your website visitors.

If you follow the laws and the compliance and don’t overdo it, don’t over spam, you have your own database of clients which is just marketing gold and you can create any kind of campaign, for any kind of reason and average segmentation, it’s just incredible, but to finish off, I think yeah, you have to consider every channel because of course, Facebook and Google are all great for advertising, still.

Revathi: Yeah. Dependency on one channel is always risky.

Dimitar: Very risky.

Revathi: I think I’m going to leave you with one last question which is kind of a cliché, kind of an obvious one.

According to you, what does the future of e-commerce marketing look like?

Dimitar: This morning, I was reading about plans for Google to depreciate third-party cookies for the Chrome browser and what implications this might have, and no one really knows what’s going to happen, but changes are coming in 2022, so I think the future is very unstable and I think what’s important is that you make use of every single channel that you see other stores are using and that are available.

We talked about SMS messaging here, we talked about email, we talked about Google and Facebook, but also push notifications on your website is another channel. Just consider everything that is out there and implement it in your store, and keep track of what’s happening. What’s really important nowadays is just to be informed about the changes that are happening and what is working and what is changing. I think that’s as much as I can say.

Revathi: Right, to summarize, what you’re saying is diversify the channels for marketing as well as keep experimenting, keep measuring, and keep tweaking them. So, that summarizes it all really well. Thank you, Dimitar for taking your time to speak with us. It’s been great having you on our show.

Dimitar: Thanks a lot too and I wish you much success for your show. It will be great to be featured again and I will be listening in to see what your other guests are saying in the next episodes.

Revathi: That’s great, that’s awesome, thank you so much.