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Is Your Customer Communication Actually Effective? Here's How to Avoid the Limitations of Common Tactics There are a handful of popular and effective ways to stay in contact with customers, but it's important to understand the limitations and how to utilize technology to your advantage.

By Stephen Gould Edited by Chelsea Brown

Opinions expressed by Entrepreneur contributors are their own.

Most people running a business are well aware that customer communication is critical to success, but that's only partially correct: It's only successful when executed in a way that not only engages customers but builds meaningful relationships. In fact, 54% of customers think companies need to do a better job with their approach to relationship-building, according to global research findings from Salesforce.

Today, there are a multitude of ways to communicate with customers, and within this digital age, it's an ever-changing field with a diverse array of means to reach out and communicate directly. It can become overwhelming for businesses trying to pinpoint which channel is best to not only reach customers but to generate loyalty — since it goes back to the Pareto Principle (or 80/20 rule): That loyal 20% of customers drives 80% of your revenue.

While this process can be difficult, it's something each business needs to embark on when looking to grow and be successful. Especially when considering that two-thirds of the difference between brand profits were based on consumer engagement, with businesses at the higher end of customer engagement receiving higher percentages of profits, according to a report from Hall and Partners.

Each communications channel has value and is well suited for a specific purpose, but each also has weaknesses. It's helpful to look at the best use of the various channels to enhance customer communications but to also understand the pitfalls of these individual channels and how to mitigate the risk through best practices, as well as supporting technologies.

Let's break down the six most popular and effective ways to keep in constant contact with your customers and what the limitations are:

Related: Why Customer Communication Makes a Difference During Inflation

1. Intense competition on social media

Ninety percent of customers are more loyal to brands they follow on social media, according to a recent report by Sprout Social. Why? Because customers want relationships with brands, and social media platforms provide a means for customers to know what a brand is doing any day of the week at any time, and most importantly, based on the consumer's schedule. While social media platforms are constantly evolving, the one challenge is the competition for placement. Consumers are inundated with a deluge of content, and the fact that the platforms have algorithms to pick what content they can display means that, organically, only 2% of your followers will see what you post on their timeline. Thus, social media platforms are very powerful, but only if the customer either "goes" to your page or is somehow driven to your site.

2. Difficulty driving traffic to your website

Websites have long been the common method for publishing content, business hours, company information and much more. Providers like Google constantly scour the web, building huge indices of the information they find on a website. However, much like social media, websites are great if the customer comes "looking" for your information — but websites have no way of actively getting information into your customer's hands. The challenge is navigating search engine optimization and an array of tactics to drive traffic to your site. The second challenge with a website is that the information is often stale for multiple reasons. The most obvious one is that the individual operator is not a website developer. And there is cost and the time spent to keep the site current — especially for very time-sensitive information, like a band schedule or this week's happy hour specials.

Related: 19 Experts Explain Why Your Website Isn't Bringing in Customers

3. The many challenges of email marketing

Email is an age-old communications method. One of the benefits of email is that it creates a reference that people can revisit (for example, a coupon delivered via email that can be pulled up on a phone). The challenges are the sheer volume of emails, the timeliness of "seeing" the emails, and spam filtering. Also, inbox space is limited, messages need to be brief, and delivery and compliance are very non-deterministic. Even with a successful email model, the question is how do you acquire the email addresses of your valuable customers? These aren't always easy or inexpensive to procure and often require depending on a third-party resource.

4. Character limits with SMS marketing

The primary benefits of SMS marketing are that it's delivered quickly and promotes interaction. It also has a much higher open rate than email. In fact, 98% of text messages are opened within 5 minutes. However, the messages are very short, at only 160 characters, which limits the robustness of communication. This can leave a customer feeling detached from your business and impacts the personalization of your communications. And the phone numbers for SMS must be procured — so building a customer database takes time.

Related: 5 Ways to Use Texting to Grow Your Sales and Marketing

5. Digital signage lacks personalization

Digital signage provides a means to inform customers in brick-and-mortar establishments. It can communicate specials, upsell items, provide QR codes to follow, share social posts, and it can even serve as a digital menu board. While digital signage is certainly beneficial, it's not advantageous as a stand-alone tactic. Customer loyalty requires personalized, ongoing relationship building, so digital signage works better as an enhancement as opposed to a tactic of its own.

6. Cost and time of podcasts

A podcast provides the opportunity for robust, personalized content and no time or length restrictions. The biggest challenge with a podcast is growing an audience in addition to the time spent planning, recording, producing and marketing the podcast. Although a podcast does boost brand loyalty, due to the amount of money and labor it requires, it's not always the best fit.

With these six different methods of communicating with customers, each has unique benefits. But generating customer loyalty, and ultimately more revenue, can best be achieved by not just one of these methods, but multiple integrated tactics, to achieve the best results.

Related: Why You Should Use Blogs and Podcasts to Market Your Business

How integrated marketing technology works

Here's an example: Charlie & Jake's Brewhouse needed to fill their dining room and boost sales on Sunday afternoons. By capturing customer information via a free WiFi hotspot, they collected phone numbers and sent a text message out at 10:30 a.m. on Sunday offering a free brewhouse pretzel with beer mustard that day. Customers merely had to text the reply "PRETZEL" to redeem it. The result was a busy dining room within hours of opening. It was real-time marketing, with real-time results by integrating WiFi with SMS.

However, this can be taken a step further. Once owned customer data is collected, it can also be integrated with social media, email marketing and digital signage. SMS can be used to send a message with a one-click link to follow your business on social media, or it can provide a link to your event on Facebook. By integrating WiFi technology with different forms of communication, businesses can not only provide hyper-targeted and more personalized messaging, but communication that is provided to the right people at the right time and in the right place.

In short, there isn't necessarily a right or wrong form of communication when building customer relationships — it's about utilizing multiple forms of communication that all work together for a purpose.

Stephen Gould

CEO of CogoBuzz

Stephen Gould is an entrepreneur with a successful history providing guest-engagement software solutions for the hospitality industry and he is the founder and CEO of NConnections. In 2014, he launched the CogoBuzz and MyConcierge initiatives focused on integrated communication technologies.

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