How to Build SMS Memberships that retain your target customer

Want to keep your target customers informed about your products or services? SMS memberships are a great way to do just that! Here are a few tips on how to build SMS memberships that retain your target customers.
Written by
Easton Smith
September 1, 2022
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SMS memberships are a great way to inform your target customers about your products or services. However, suppose you don't have a good retention strategy in place. In that case, your SMS memberships could quickly fail, and you could find yourself dealing with churn. On average, renewals account for 62% of subscription revenue

Customer loyalty and retention should be key focuses for any business. Still, it's essential for anyone who intends to build SMS memberships. Increased customer retention can mean more substantial recurring revenue and lower customer acquisition costs (CAC). If your SMS membership is too difficult to unsubscribe from, your target loyal customers will simply give up and move on. Make sure that there is an obvious and easy way for people to unsubscribe if they no longer want to receive your recurring messages.

Text message marketing is an effective way to reach your target audience quickly and efficiently. Everybody receives SMS messages and MMS messages. If you're not already using SMS messages to promote your business, now is the time to start taking advantage of this powerful communication tool. To get started with text messaging for your business, you first need to choose a provider that offers all the SMS marketing tools your business requires.

Understanding churn is key to building SMS memberships that retain your target customers. But, first, you must understand why your loyal customers may be leaving in the first place.

Churn: A fundamental metric for any SMS subscription or membership

Churn is simply defined as when a customer cancels their membership or subscription. It's a metric that businesses should continuously be tracking, as it can give critical insights into customer behavior, sentiment, and the health of your membership. A healthy churn rate for an SMS content membership is often between 2-5%.

There are two types of churn:

Voluntary churn: Customers actively choose to cancel their subscription or membership. This could be for any number of reasons. For example, they may no longer find value in their SMS membership or subscription, or the frequency of communication is too high or too low for their liking.

Involuntary churn: Customers are forced to leave because of billing issues or poor text message subscription service. About 20-40% of churn is involuntary churn. Almost all involuntary churn is preventable with SMS marketing services.

Reducing Churn & Retaining Customers with text message marketing campaigns

To actively reduce churn for your SMS content memberships, you must first identify why your customers are leaving. Once you know why they're going, you can take steps to mitigate those reasons and keep your customers around longer. One of the most essential elements of marketing is the message. You run the risk of missing out on a lifetime client if you don't have the appropriate inbound messages to protect consumers with your brand, product, or business. Use a particular marketing strategy. See if that marketing strategy works or not.

Some causes of voluntary and involuntary churn may include: 

  • Your content is no longer relevant to subscribers

  • They're not seeing the value in your membership offering

  • The price is too high

  • They found a competitor with better offerings

  • There was a problem with customer service

  • They are dissatisfied with the service

  • Insufficient funds

  • Expired cards

  • Card activity limit reached

  • Processing failures

When you build your SMS membership, it's essential to consider these factors. Prioritizing the retention of your target audience will impact how you structure your SMS subscription service and the frequency and type of information you intend to send via text.

A Closer Look at Managing Voluntary Churn

Your product's voluntary churn rate will likely have to do with your subscriber's overall satisfaction with your product and how it solves their problems. Here are some steps you can take to keep your voluntary churn low.

Create Clear Product Descriptions

The first step is to ensure a clear product description that outlines precisely what problem your product solves for your target customer. Include in this description the type of content you will send and the frequency via text subscription service. It may even be helpful to include marketing language that resonates with your target demographic and highlights the results they can expect to experience by being subscribed.

By clarifying your offering, you will reduce any instances of subscribers quickly churning because what you offer is not helpful or meant for them.

Price Your Product in Line with The Value Being Delivered

If you are offering a valuable service that meets a need of your target market, make sure your pricing is in line with the value being delivered. For example, suppose your target market perceives your product as too expensive. In that case, people may unsubscribe even if they do not find your content valuable. Additionally - if your SMS content membership is free or priced too low, the same target market may see it as low quality and unsubscribe.

To find the correct pricing sweet spot, you will want to consider your target market, what they are willing to pay, and the value of your content. You will also want to consider any other product or service offering you may have available and how your SMS content membership compares.

Routinely Engage your Potential Customers in Providing Feedback

As with any new product in your local businesses you are launching to your audience or customers, getting feedback from them on the content, communication frequency, and the overall program is essential. After all, they are the ones that are going to be interacting with it regularly. Using their feedback to shape how you build your SMS membership will ensure that you have product market fit.

Product market fit is "when a product satisfies a deep market need in a way that customers are willing and able to pay for." For your SMS content membership to have product market fit, you have to have an offer that people want and are willing to pay for. Requesting and reviewing feedback is the most trusted way to ensure that you build, launch and grow your SMS content membership in line with product market fit.

Segment Your Audience to Ensure the Content They are Receiving is Relevant

The most successful text marketing messages and SMS content memberships send content relevant to their subscribers. The first step in ensuring relevance is segmenting your audience so you can send them targeted content. For example, you may segment your audience by their varying fitness goals if you are a fitness trainer. Some may be interested in weight loss content, while others may be interested in muscle gain information. You can segment your customers either by customer types subscribed to one product or segment your audience by offering different products intended for specific audiences.

Do Competitive Landscape Research Before Launching

Before you go build an SMS subscription service, you need to do some competitive landscape research. Your SMS content membership or subscription needs to be unique enough to not compete directly with other companies, content creators, or service providers in your niche or industry. Suppose you cannot find a way to make your SMS content unique. In that case, getting people to subscribe and continue using your service will be difficult. There are several things to bear in mind when it comes to marketing strategy, but the most crucial is building customer loyalty. SMS marketing tools and SMS campaigns are an important component of any SMS marketing regulations effort since they help businesses reach out to their target audience quickly and effectively.

Make Clear Your Customer Service Communication Channels

When you set up your SMS content membership, ensure that you include clear communication channels for customer service. This way, if someone has a problem with the service or has a question about how to use it, they will be able to reach out and get help. If you accept direct 1:1 communication through your text membership or subscription, tell your customers. Making it simple for them to reach out will help keep them, subscribers.

How to Tackle Involuntary Churn

Any time you are dealing with a subscription product, there is a considerable risk of involuntary churn just due to how payment is processed. For example, customers who subscribe to an SMS content membership are enrolled with payment information that will then be used for subscription fee processing throughout their enrollment. Therefore, any minor or significant payment processing malfunctions can trigger a customer's account to automatically be churned from your subscription or membership.

Let's take a closer look at some of the most common causes of involuntary churn from payment processing failures and some potential solutions to keep your target customers subscribed:

Outdated Payment Information

The most common cause of involuntary churn is inaccurate or outdated payment information on a customer's account. For example, when a customer's credit card expires or gets a new billing address, this updated information needs to be entered. Build customer loyalty through constant contact.

Lack of Sufficient Funds

When a customer doesn't have enough money in their account to cover the cost of your product or service, their subscription will be automatically canceled.

Lost or Stolen Cards

If a customer's credit card has been lost or stolen, it is likely they have requested their card to be deactivated. Attempting to process a payment with a deactivated card will cancel the customer's subscription.

Technical Payment Processor Failure

Sometimes, the payment processor cannot process a customer's payment information.

Regardless of how or why a customer's payment fails to process, the steps you should take will all likely be similar. First, you'll want to communicate with the customer and update them on their subscription status. It is essential to let them know that their service has been suspended until successful payment processing has resumed over the payment platform.

Through Subflow's SMS content membership software, you can still directly communicate 1:1 with subscribers or members who are no longer actively subscribed. Using SMS software and SMS apps, you can inform your customer that their payment information has failed and request they input new details.

You will want to make sure that you design a thoughtful communication workflow to combat involuntary churn. For example, it may take more than one text or email to engage your customers in updating their billing or payment information. Additionally, you may want to remind churned subscribers of exactly what value they originally intended to be subscribed to, igniting their desire for your product.

Retain Your Customers and Reduce Your Churn from Day One

The best way to reduce churn is to focus on customer retention from day one. The strategy behind how you build SMS memberships and continue to engage with your customers throughout their subscriptions and beyond will ultimately lead to high customer satisfaction and retention. Text message services are a great way to keep your target customers informed about your products or services. However, if you don't have a good retention strategy in place, your SMS memberships could quickly become worthless.

Using Subflow, you have everything in existing systems you need to seamlessly monetize your content being offered via SMS and manage the recurring payment component. Beyond that, you can easily communicate with your subscribers to gather feedback, insight, and their experience with your membership. Ensuring that you have everything you need to launch successful SMS content subscriptions. Many businesses are already using email marketing, paid advertising, social media, and more as marketing tools. There are, however, many other overlooked digital avenues to choose from. Digital communications such as SMS or text messages are easy to implement and offer significant benefits to membership-based organizations.

Why are SMS marketing tools needed?

There are a few reasons why SMS marketing tools are needed:

  • They allow small businesses to send SMS messages to their customers via SMS.

  • They help businesses to obtain the phone numbers of their target customers.

  • They help businesses to use an SMS marketing platform to send out mass texting.

  • They help customers opt-in to receive text messages by providing their phone number to the business, either in-store or online.

  • Once a customer has opted-in, they will start receiving messages from the business regularly.

There are many things to bear in mind when it comes to new subscribers, but one of the most crucial is SMS messaging services. SMS marketing tools and SMS campaigns are an important component of any SMS marketing regulations effort since they help small businesses reach out to their target audience quickly and effectively. 

Start by creating your SMS membership today!
Try Subflow out risk-free for 30 days. Build a membership your audience loves or your money back.