It seems like it was just a few months ago when brands were being encouraged to get with the times and start using SMS to communicate with customers in today’s mobile world. Well, it was—and lots of brands jumped on the bandwagon. But not surprisingly, many of them started overdoing it with too many texts and too much untargeted info. And now, new research from cloud advisory, research and consulting firm Arion Research suggests that brand texting is in a tailspin and live chat is swiftly gaining ground as a consumer preference.
The new study, Consumer Channel Preferences for Communicating with Businesses, sponsored by app conversations platform Sendbird, comes as consumer preferences evolve with more communication channels available to them and as they spend more time online and in a business’ mobile applications. All the major communication channels, including email, phone / voice, text / SMS, push notifications, live chat, automated chat, public messengers (WhatsApp, Facebook Messenger, Telegram, etc.), and social media (LinkedIn, Instagram, Facebook, etc.) were examined—revealing that a global shift is underway in terms of how brands can effectively reach consumers.
In addition to looking at communications preferences, the survey also provides insights into specific channel preferences across a variety of online activities like banking, eCommerce, entertainment, social networking, online learning and healthcare.
At a high level, there is a growing urgency for brands to understand consumer communication preferences in order to attract and retain loyal customers
The study shows that when brands offer consumers’ preferred communication channel, they are more likely to remain customers (82 percent), buy more (69 percent) and become advocates (66 percent).
But the penalty for poor communication practices can be stiff—nearly 1 in 4 respondents said they have switched brands or failed to renew a subscription because the company sent too many emails or text / SMS messages. Over-communicating leads 1 out of 2 consumers to miss or ignore communications by phone, email, text / SMS and social media.
Key findings of the research:
Live chat is gaining momentum
Live chat has grown significantly as people spend more time online and businesses increasingly deploy mobile apps with live chat capabilities. Last year, 43 percent of mobile app users 18+ around the world have used chat to interact with a business. Of these, 55 percent of consumers reported using live chat via the business app.
SMS is losing attention
While 49 percent consumers report using SMS in the past year to interact with businesses, 34 percent say they get more unwanted SMS spam, 26 percent ignore messages from businesses more frequently, and 19 percent block more businesses from text/SMS messaging. SMS tied with email and social media, just behind the phone for the communication channel losing the most attention over the last 12 months.
Trust is shifting
Consumers trust in-app chat over SMS, public messengers and social media. In fact, 72 percent now say SMS / text is the least trusted channel for communicating with a business. This is especially true when the business is banking or healthcare.
Too much contact is bad for business
Looking at channel noise and the desire to tune it out by generation, Millennials and Gen Z are not fans of the increased volume and growing use of text / SMS for marketing purposes. These two generations are the core target set of consumers for many brands. Thirty-two percent of Millennials and 27 percent of Gen Z respondents felt that companies sent too many text or SMS messages, compared to Gen X (18 percent) and Baby Boomers (12 percent).
Tracking is okay—with a purpose
Interestingly, 85 percent of respondents usually allow (some or all) applications and/or websites to track their activity across other applications and websites. Consumers are willing to share more data if it’s for more personalized offers and experiences. There is also a marked difference by generation in how open and willing they are to share data.
“We see growing consumer fatigue with SMS as more businesses use it to communicate with customers across a broad range of functions,” says Michael Fauscette, CEO of Arion Research, in a news release. “Consumers don’t want or trust the same channel for everything—this is a finding that holds across geographies and demographics. What they do want is a personalized experience in a trusted channel of their choice. Brands that pay attention and understand how customers choose to interact will be the ones that win the day.”
“Live chat offers huge potential for rich interaction and engagement that consumers seek today, which is one reason why we see it emerging as the preferred communication channel,” added John S. Kim, co-founder and CEO of Sendbird. “It also fosters trust and personalization at a level that other channels simply can’t match. There is a time and a place for every channel, but we are confident that live, in-app chat offers something unique and desired by consumers.”
Arion Research conducted a global survey of consumer communication preferences sponsored by Sendbird. The survey, which ran Jan-Feb 2023, collected responses from 1,200 consumers in 14 countries in North America (NA), Europe, the Middle East and Africa (EMEA), and the Asia Pacific (Apac) regions.