72% consumers say SMS is the least trusted channel for communicating with businesses; 24% consumers said they switched brands or did not renew because the business sent too many SMS messages

Sendbird, the global conversations platform for mobile apps with over 300 million monthly active users, unveiled the results of a compelling new study by Arion Research. The report, Consumer Channel Preferences for Communicating with Businesses, revealed a global shift is underway in terms of how brands can effectively reach consumers in today’s mobile world. Live chat is swiftly gaining ground while other forms of digital communications, notably SMS, are beginning to lose their foothold.

The report 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. The survey spanned overall consumer communications preferences as well as specific channel preferences across a variety of online activities like banking, eCommerce, entertainment, social networking, online learning and healthcare.

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Key Findings

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 showed that when brands offer consumers’ preferred communication channel, they are more likely to remain customers (82%), buy more (69%) and become advocates (66%). But, the penalty for poor communication practices can be stiff, with nearly 1 in 4 respondents having switched brands or failing 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.

Exploring details:

• 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% of mobile app users 18+ around the world have used chat to interact with a business. Of these, 55% of consumers reported using live chat via the business app.
• SMS is losing attention: While 49% consumers report using SMS in the past year to interact with businesses, 34% say they get more unwanted SMS spam, 26% ignore messages from businesses more frequently, and 19% 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% 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% of Gen Z respondents felt that companies sent too many text or SMS messages, compared to Gen X (18%) and Baby Boomers (12%).
• Tracking is ok– with a purpose: Interestingly, 85% 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. “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. Rapid growth will continue as more brands begin to bring live chat into their apps.”

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