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Use SMS to Prompt Renewals and Increase Customer Retention

Use SMS to Prompt Renewals and Increase Customer Retention

Bringing in new customers is hard, but losing them is easy (and costly). That’s why ensuring customers renew with you is mission-critical.

If you’ve worked in sales, you know that bringing in new business is challenging.

A lot needs to go right for someone to not only want what you’re selling but choose your service or product over a competitor’s. 

So, it makes sense to do everything you can to hold on to these customers. Customer retention—the things your business does to keep your customers from leaving—can pay off in a big way. 

While it might not come with the same rush as closing a major deal, it can be the difference between success and failure.

Retention Is More Important Than Conversion

Over the past nine years, we’ve seen an explosion of new types of business models, all designed to keep customers consistently engaged in long-term relationships—think Netflix, Amazon Prime, Uber, Spotify, Salesforce, Zendesk, Box…the list goes on.

Source: Zuora

Des Traynor, the co-founder of Intercom, spoke at Web Summit 2019 about how the subscription economy is taking over. In this new world, he argued that “retention is more important than conversion for all businesses.” 

But how exactly do you retain customers? 

The Harvard Business Review published some widely cited research on this subject. It suggests that the single most significant factor in customer loyalty isn’t “WOW’ing the customer,” as so many support blogs love to preach. Instead, it’s reducing customer effort. 

You reduce customer effort by helping customers solve their problems as fast as possible. One of the lowest-hanging of low hanging fruit involves proactively reminding customers that their service or subscription is up for renewal. 

Firstly, this prevents an abrupt and frustrating end of service. Secondly, if done correctly, it takes the heavy lifting out of renewing. The best way to do this is by sending text messages straight to your customer’s phone. 

A strategic SMS renewal reminder campaign is guaranteed to increase customer retention.

Send Your First Renewal SMS for Free

We’re confident you’ll love how easy it is to send texts with SimpleTexting. That’s why we let you try it free for two weeks. No credit card required.

Why Use Text Messages to Prompt Renewal of Services

To make the argument for why you should create an SMS renewal strategy here’s how texting compares to email across:

  • Delivery
  • Engagement
  • Response

In our 2020 Text Messaging Report, we found that 62% of business owners and marketers believe that the fast delivery of messages is the most significant benefit of texting their audience.

Not only will customers receive text messages quickly, but research also shows that SMS open rates are as high as 98%, compared to just 20% of all emails. Plus, as you can see below, email open rates declined by 45% over the last nine years.

Source: MarketingCharts.com

Finally, email response rates are around 6%, while SMS response rates are 45%

It only makes sense that you should use a channel with fast delivery, high engagement, and quick response times to send your SMS renewal reminder.

(If you think it’s better to call, here’s an entire article on why texting is better than calling.)

Tips For Writing Effective Renewal Reminder Texts

Now that you’re fully versed in the benefits of sending renewal reminders via SMS, here are some tips to keep in mind as you start to write your own renewal reminder text messages.

  • Keep it simple: Renewal text messages should be straightforward and to the point.
  • Be personal: Address recipients by name as you want to make a connection to this engaged audience.
  • Explain the benefits: If possible, give recipients clear, value-added reasons for renewing.
  • Instill urgency: Encourage recipients to seize an opportunity during a limited amount of time.
  • Ensure a clear CTA: A clear CTA is an essential part of any text.
  • Create a drip campaign: Give customers more than one opportunity to act with a scheduled series of texts.

SMS Renewal Examples

Let’s review some examples of renewal reminders text messages you can use for inspiration. Here are two types of renewal texts you should send to reduce churn.

1. Reminder SMS leading up to the renewal date

We recommend that you keep your text(s) simple and friendly. Crucially, it should contain all the vital information for the customer to renew–including a clear call to action. Take a look at this example:

Today 10:30 AM
Your FruitBox membership is up for renewal within a few days. We’d love you to stay with us. You qualify for our $25 monthly membership! Call us on +1 800-796-6009 to renew your membership today, or renew here: http://txt.vg/MCSVPI

2. Reminder texts following the renewal date

Now let’s say even though you’ve sent several reminder texts leading up to the customer’s expiration date, the member still doesn’t renew. Well, that’s not to say you should stop sending text messages. You could send the following message, and even offer something for free:

Today 9:30 AM
This is a reminder that your FruitBox membership expired yesterday. If you still want delicious fruit delivered to your home biweekly, please follow this link to complete your renewal: http://txt.vg/MCSVPI Also, as thanks for being a customer, we’re sending you a free box on the house.

What Industries Should Send Renewal Texts?

In the above example, we used a fictional fruit delivery subscription service. The entire subscription economy can benefit from sending renewal SMS. Here are some other industries and text message examples.

Gyms and Fitness Studios

You can contact members as their contract renewal date approaches and remind them to resign, so that they don’t miss any of your gym’s classes and events.

Today 11:00 AM
Hi John. It’s Sam from Bomb Fitness. Your yearly membership is set to expire on 5/12. Would you like me to renew this for you with the card we have on file?

Nonprofit Membership Reminders

A great way to remind your nonprofit members to renew is by sending automated text message reminders!

Today 10:00 AM
Hi Kim! As a reminder, your membership expires next week. Thank you for continuing to be a member of Charleston’s Chamber of Commerce and continuing to better our community. You can renew here: http://txt.vg/MCSVPI

Insurance 

Don’t let clients slip away. Encourage renewals well in advance of a policy’s expiration date. Along with the notification of the expiration, you can send deals and incentives that will sweeten the deal for resigning.

Today 12:00 PM
Cam, your auto policy expires next month on the first: if you renew in the next two weeks we’d love to offer you one month free! You can renew here: http://txt.vg/MCSVPI

Sports Clubs

Sports clubs of all sizes and stripes can benefit from sending annual membership text reminders.

Today 12:00 PM
Drew, it’s San Diego Legion here! Your membership is up on the 8/9. You can renew here to ensure your spot on next year’s weekly tag rugby run out: http://txt.vg/MCSVPI

How Do I Get Started With Renewal Reminder Texts?

The first step is to start your 14-day free trial. Our free trial comes with 50 outgoing text messages, unlimited incoming messages, full access to all our powerful features, and dedicated support 7 days per week. You can use your trial account to test out sending SMS renewal reminders.

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