5 ways to use SMS text marketing for customer retention
SMS text message marketing is a great way to reach mobile-first consumers, but you can use it to boost your customer retention rate as well.
Customer retention refers to the rate at which customers stay with a business for a given period of time. Increasing your customer retention rate by just 5 percent can increase your profit by 25 percent to 95 percent, according to research popularized by Bain & Company.
Text messages can help you foster trusting relationships with your customers, which can grow brand loyalty and ultimately customer retention. In fact, SMS still delivers the highest open rate of any marketing channel at about 98 percent, with a response rate around 45 percent, compared to roughly 6 percent for email.
In addition, about 85.6 percent of consumers are now opted in to receive texts from at least one business, up sharply in recent years. So, if you have a loyalty program (or are thinking of creating one), you'll want text messages to be a part of your customer loyalty rewards program strategy.
Of course, loyalty doesn't happen overnight. You have to earn it while standing out from the competition. But the effort is worthwhile: businesses using SMS as part of their marketing mix report meaningfully stronger digital marketing results overall. The stronger your customer retention, the stronger your business revenue.
The following are five ways that you can use SMS text message marketing to improve customer retention.
| What 2026 data shows | Why it matters for retention |
|---|---|
| 98% average SMS open rate | Your retention messages actually get seen |
| 45% average response rate (vs. ~6% for email) | SMS supports real two-way conversations with customers |
| 85.6% of consumers are opted in to business texts | Most of your customer base is already reachable |
| 55% unsubscribe over excessive frequency | Restraint matters as much as the message itself |
Offer (and engage through) customer loyalty rewards programs
Loyalty programs offer rewards, discounts, and other special incentives as a way to attract and retain customers. They are designed to encourage repeat business, offering people a reward for store or brand loyalty.
These programs are a natural fit for SMS text messages. You can encourage sign-ups by making it easy to text a keyword to a specific phone number. You also can regularly engage with your loyalty program members with texts that offer the perks of your program.
Just make sure that you're being respectful of your loyalty rewards customers in both the timing of your text messages and the frequency of those texts. About 55 percent of consumers say they'll unsubscribe if a business texts too often, so restraint matters as much as the offer itself.
Provide helpful information
Consider all the frequent questions your business typically answers from customers and potential customers. You can get ahead of at least some of these questions by creating an educational SMS text message drip campaign for new customers.
Think through concise pieces of information that will benefit (and not annoy) your customers. You likely won't want to send more often than every five to seven days. Many consumers say they prefer no more than one promotional text per week, so it's worth checking your own frequency against that expectation.
The goal is to educate your customers so that you can get ahead of any confusion that could deter them from staying with you. Plus, they'll appreciate if they can reply to your texts with any follow-up questions.
Request feedback from customers
Soliciting customer feedback is necessary for any business. It's how you can find out whether you're delivering on expectations or if there are opportunities to improve (or maybe a mix of both).
Collecting feedback through text messages makes it that much easier for your customer to deliver it to you. You can text questions directly or even a link to a survey.
Check out our eight tips to create a successful customer survey for your business.
Deliver excellent customer service
Quick yet empathetic communication is key to excellent customer service. Text messaging is a fantastic way to level up your customer service experience for customers. This directly impacts your customer retention rate.
However, you can be proactive about it as well. You can text payment reminders, appointment reminders, order confirmations and shipping updates. All of these options deliver value for your customers. They also can be automated. Check out our five tips for automated text message marketing.
Plus, dive deeper into customer service best practices with our five tips.
Leverage personalization in your text messages
By using segmentation and personalization in your text messages, you're not only getting the right message to the right person at the right time, but you're also making the customer feel special. The more special they feel, the higher your customer retention rate.
Using their first name, for example, and telling them that you miss them since they haven't purchased from you in a few months can more effectively compel them to return to your business. It also could be as simple as wishing your customer a happy birthday and offering a special discount.
Strategically speaking, the more you can group your contact list into relevant segments, the better. When you speak too broadly to everyone at the same time, you lose the effectiveness of your efforts.
In conclusion
SMS text message marketing offers many benefits, including boosting your customer retention rate. But you want to make sure that you're engaging with your customers and not annoying them.
Keep your messages short and to the point. Focus on delivering value in every text message you send. And make sure that you're not texting at inappropriate times or too much in general.
As you're working to improve your customer retention through SMS text messages, consider leveling up your overall digital marketing with DailyStory. Features include automating various marketing tasks, dynamic audience segmentation and more. Schedule your free demo with us today.