SMS Gateway Boosts Online Business’ Customer Retention

Running a successful online business with a customer base that is not all that ‘online’ is quite a challenge. Here is a the story of how an online Australian business, called Estimate 1, targeting largely an offline community implemented an SMS Gateway to improve member communication.

Estimate 1 is an online portal that services the Commercial Construction Industry. They function as a sophisticated online noticeboard facilitating jobs between contractors and subcontractors in commercial construction around Australia.

Their customer base of builders, electricians, plumbers and concreters are not commonly frequent users of email, or even a PC for that matter.
As a SAAS business, where subscribers pay a monthly or annual fee to use the service, retaining and growing its customer base is key to the long-term success of this business.

Herein lies the major challenge: User retention

Here’s an example of typical scenario, where a user cancels:

1. Builder needs a project to quote.
2. Builder finds Estimate 1 in search engine.
3. Builder signs up, and finds a suitable contract to quote.
4. Builder wins job, and works for 6 months on that project.
5. In 6 months’ time Builder gets another project via word of mouth.
6. After 12 months, the Builder has only used the service once, and is up for subscription renewal.
7. The builder decides not to renew, as he has not had a need for the service in 12 months.

Marketers In SAAS know, ‘cancelation’ is your worst enemy

With a very large customer base, which it emails job alerts, and contract notices to weekly. It would seem they were doing everything in their power to remain ‘top of mind’ and relevant to their customer base, but still their cancelation rate hovered higher than they would like.
The marketers at Estimate 1 had to think outside of the box… literally. The audience rarely used a PC, Mac, or Laptop. But the one thing a ‘tradie’ can’t live without is a mobile phone for calls and SMS messages.

SMS Gateway opportunity

Throwing an SMS Gateway into the mix would stir the ‘non frequent’ email and internet users to life, in a multi-pronged approach.
Firstly, registered users would tick a box for ‘SMS Alerts’, which would hit the builder with a fresh job prospect as soon as it was available on the website. In the construction industry, the difference between winning a $5M job or not, could be hours, so the immediacy of SMS was a perfect fit. This SMS alert process helped Estimate 1 to not only remain top of mind, but also to provide an added level of service to their already successful business. Relevance = Retention.

The second SMS Gateway approach, for those non frequent users like the example listed above: Quarterly Reminders to come back to the site. This was a completely automated function, where if a user had not been active for 3 months, they would get a reminder to come back to the site, to seek out more work. By using this ‘gentle reminder SMS’ approach, users would eventually be triggered at the relevant time, to come back to the site and obtain more work. This technique would interfere with the possibility for the users to find more projects elsewhere.

With the simple integration of an SMS gateway into the existing CRM functionality, Estimate 1 were able to halve their cancelation rate, in the period of 6 months. This may not sound like a lot, but when you are talking about a large customer base, even a 5% decrease is momentous; particularly when the solution implementation costs were nominal.

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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