October 22, 2014

Study: Sending Text Messages to Sales Prospects Can Boost Conversion Rates by 328%

By now most companies understand the importance of phone calls in the process of converting a lead to a customer, but what about text messages?

Leads360 - text message study

Yes, we’re going there – or, rather, Leads360 went there with its study, “Text Messaging for Better Sales Conversion.”

“Text messaging has quickly become one of the most widely used forms of personal communication,” Leads360 notes in its executive summary of the study. “Naturally, marketers see the value of text messaging for advertising purposes, but its use in the sales process has been questioned and is not commonly practiced.”

Some background
According to comScore, 75.9 percent of U.S. mobile subscribers used text messages to communicate with another mobile user in November. Advertisers are obviously aware of this huge medium of personal communication with consumers, which isn’t exactly good news: Cloudmark recently found that 72 percent of U.S. adults who use text messaging have received an unsolicited text message, while 62 percent say they’ve received text message spam within the last 12 months. A simple search for “text message spam” will yield plenty of results showing just how big of a problem this has become.

So yes, the notion of businesses contacting consumers via text messages is a touchy subject. But Leads360 contends that there is a right way to use text messages when trying to convert a prospect into a customer.

Timing
The study found that prospects who are sent text messages convert at a rate 40 percent higher than prospects who aren’t sent any text messages. When used properly – that’s the keyword – text messaging can actually improve conversion by more than 100 percent, according to Leads360.

However, timing is a significant factor here. The study found that “the often inappropriate use of texting before a relationship with a prospect is developed” decreases the likelihood of ever contacting that lead by 39 percent.

“Texting before the sales rep has spoken to a prospect on the phone not only hurts the representative’s chances of contacting that prospect, but more importantly, it hurts his chances of converting that prospect, even if he is successful in making initial contact,” Leads360 notes in the report.

Contacting prospects via text message only after the initial contact, on the other hand, led to prospects converting at more than twice the rate of the average contacted lead.

Leads360 - text message timing

Source: Leads360

The takeaway is simple enough: Salespeople should establish contact before using text messages to follow up. In other words, “texting in business is an earned privilege,” according to Leads360.

[Insert a dating-related illustration here.]

Quantity
Leads360 also analyzed how the quantity of text messages sent to a prospect affects conversion rates. It found that one text message sent after contact is established led to prospects converting 89 percent better than the average contacted lead. This figure dips to 74 percent when two text messages are sent but soars to 328 percent when three or more text messages are sent.

Leads360 - text message quantity

Source: Leads360

That’s fine and dandy, but there must be a ceiling to the number of text messages sales teams should be sending, right? Leads360 says it plans to find the answer to this question in its future research when texting becomes a more commonly used tool in the sales process.

Conclusions
This might go without saying, but Leads360 reminds businesses that the content of text messages matters, too. “Text messages are best used when there’s something timely and important that can be said in a few words,” the company notes. This includes reminders of appointments, acknowledgement of receipt or approval of a document, or a request for missing information.

Leads360 also urges businesses thinking of implementing a text-message program to use a permission-based approach and offer recipients the ability to opt out. It also recommends that businesses follow the guidelines offered by the Federal Communications Commission (FCC) and the Mobile Marketing Association (MMA).


By Jason Hahn

Comments

  1. Hi Jason Han,

    It’s a great article for me as a marketer. Even I know it is an effective tools as you said but in my opinion, for my local area this situation become annoying. Every minutes short messages come to mobile phone without any permission, and they are coming with a boring text message. I don’t know, can this case boost the conversion rate become 320% as you said ? Unfortunately, in my local area as long as I know haven’t any studied yet about this case. It is our local problems.

    Thank you for your great article.

    Regards,
    Estiko Fadjar
    Jakarta Indonesia

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