By Cory Jefferies
Texting is not a new phenomenon. It’s been around for decades, and in today’s technologically driven world 65% of the world’s population and 80% of the North American population sends and receives SMS messages. The current generation of consumers craves instant gratification, and consistently has their mobile phone in the palm of their hand, making texting a standard way of communicating.
For credit unions, implementing texting as a form of member communication—or working with a partner that leverages the technology in their risk management efforts—is a great way to stay top of mind and give your members a more casual way of communicating with you.
Ease of Communication
Consumers are busier than ever, and taking a phone call during normal business hours may not be a convenient form of communication, but texting—particularly for non-essential business such as account management and payment reminders—is a less intrusive way to reach members.
Preferred Communication Channels
According to a survey conducted by the CMO Council, consumers across all generations expect multiple B2C communication channels, including both digital and in-person. The top five communication channels identified by survey respondents in order of importance include:
- Email (86%)
- Telephone (65%)
- Website (53%)
- Text (52%)
- In person (48%)
Credit unions can conclude that no channel should be ignored in order to meet the needs of members; however, special attention and investment should be made to channels that produce the best results. While email and phone top the list of preferred channels, it does not necessarily mean consumers are likely to respond. Email and phone are more widely used for B2B communication, but long hold times and unprepared agents deter consumers from phone calls, and email response rates are as low as 6%, while text response rates are significantly higher at 45%. In fact, consumers read their text messages within the first three minutes 95% of the time, and respond within 90 seconds.
Texting With a Purpose
At SWBC, we implemented texting as a communication channel in our insurance tracking and payments operations more than two years ago. At the onset of developing our proprietary solution, we knew it was critical for the solution to add value, and not just be the “new shiny toy” in our product features listing. Based on research and speaking with clients, we recognized texting was a more informal way to reach people in a channel they are more receptive to, and we set out to give them a better experience when communicating about insurance coverage on their auto loans and payment due dates. Texting is a more consumer-friendly way to communicate with borrowers, and just as important, it’s a method of communication that results in more responses.
No News is Good News
In the traditional insurance-tracking process, when a borrower’s policy has lapsed, the letter process begins. In our 30+ years of experience in the tracking business, we’ve found—overwhelmingly—that members respond negatively to the letter cycle process. In a sense, it’s as if receiving a letter about a lapse in insurance is similar to receiving a delinquency notice. However, in the time since we’ve implemented texting as a form of communication, and sent over 2.5 million text messages to members about quickly updating their insurance coverage right from their mobile devices, only 0.000004% of member complaints to our call center are about texting as a form of communication.
It’s no secret that members accept and expect self-service options from their credit unions. In fact, to remain competitive, credit unions must expand their digital banking capabilities, and informal text communication is the future of communicating with members.
Cory Jefferies is EVP with SWBC and leads the Client Support teams for the company’s Financial Institution Group that includes sales support, product implementation, account management, and client training and support. Cory joined SWBC in 2006, and has more than 25 years of experience in operations management, training and development, process improvement, project management, and product development from multiple industries. Cory graduated from the University of Central Oklahoma with a Bachelor of Business Administration and is trained and certified in the Six Sigma process improvement methodology.