Case Study: SMS Gateway Nurtures Sales

So you don’t think your online sign up process needs SMS gateway support?

Take the case of one our clients in the energy comparison business, who has given us permission to use their experience with our SMS gateway as a case study. For this article we will refer to them as ‘Energy-Comparator X.’

An involved online sign-up process needed some SMS problem solving.

The gas and electricity comparison market is a high volume, low margin game. Timely acquisition is key to yielding big returns; and a high cancelation and drop-offs can be extremely costly on profits.

Here’s a quick overview of the process involved to switch a customer from one energy retailer to another:

1. Customer enters address details into comparator site.
2. Comparison engine provides product offers in area.
3. Customer chooses product offer and accepts terms and conditions.
4. Customer service agent rings to verify the customer’s authority to ‘switch’ account.
5. Comparator sends customer data to new energy provider.
6. Customer is officially ‘switched’, and comparator gets paid for the sale.

Energy-Comparator X had a problem. Cancelation and customer drop off was eating into profit.

Switching an energy customer requires coordination of marketing, onsite sales messaging, customer service and old fashioned data entry. This process had 6 major links in the chain to sign up, and one major failing point.

One core part of the sign up process is to verify the customer’s identity in order to switch the household’s electricity account. A customer service agent would have to ring the customer to authenticate they are not being fraudulent. This was all well and good for online sales made 9 to 6pm, but a decent majority of sales were still left waiting in the air un-finalised out of business hours. This was identified as a major failing point in the process, and a major contributor to cancelations and drop offs.

A humble SMS gateway solution

Enter an SMS gateway into the mix. A few simple lines of code integrating the CRM and sms gateway, and now a customer signing up out of hours receives an instant SMS, with a reference number and code. Entering that code would then authenticate the sale immediately, and send the sale data to new energy provider instantly.

This simple solution had 2 major positive effects.

1. It reduced cancelation and drop offs, by speeding up the processing time of the sale, and keeping customers informed of the status of their order.
2. Reduce customer service agent time on phones, chasing customers to verify sales, ultimately this saved hundreds of man hours.

So what was the outcome?

The SMS gateway solution was implemented in early July 2012. Over a 6 month period, cancelation rate was reduced by 5%, which increased sales revenue significantly. The increased sales revenue combined with the customer service labour hours saved, amounted to approximately an extra $65,000 of profit for a 6 month period. For a business of less than 20 Employees, that was a significant sum of money, for what as a relatively simple function to implement.

In closing

We may be biased, but there is probably a creative and useful way an SMS gateway can improve your customer sign-up or purchases processes, no matter what industry you are in. The numbers in the case of Energy Comparator X speak for themselves, an SMS to keep customers informed and engaged in the process, kept them in the loop and therefore less likely to cancel. Setting up the automation for this service took no more than a few man hours, and amounted to a significant profit increase.

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Agus Echagüe

Marketing Manager at SMS Central

Agus is the Marketing Manager (or Capocha as she calls herself) at SMS Central, so always has an excuse to be texting at the office. A marketing nerd all the way from Argentina, Agus has worked previously in tech for Paycycle.com.au as well as for consumer brands such as Unilever. Agus believes in balancing hardcore number crunching with airy-fairy, go with your gut style creative thinking and so far it is working out well.

Latest posts by Agus Echagüe (see all)

• SMS Gateway Boosts Online Business’ Customer Retention - December 5, 2013
• Case Study: SMS Gateway Nurtures Sales - October 31, 2013