SMS marketing is a rising trend in modern marketing. What’s driving the popularity of text message marketing is the crazy results small businesses are achieving by sending SMS messages to their customer base and target audience. The results are overshadowing other marketing channels such as email marketing and social media marketing. Text messages have a 98% open rate and we know our customers are boosting their bottom line by thousands due to it. For example, Unstoppable Auto Group sent one text message which hit a 35% click-through rate and led to 5 car sales in 1 week. That’s an impressive return on investment from a single text.
However, for small businesses to unlock all the benefits of SMS marketing, they need to do it right. Businesses can’t send out multiple text campaigns every day, hoping each one will turn into five high-ticket sales. They’ll be reported as spam and ruin the customer experience for their SMS subscribers, prompting them to do the opposite of making a purchase – unsubscribe. The best way to reap the rewards of texting customers is by implementing an SMS marketing strategy that monitors campaign metrics, most importantly, of course, ROI. Here’s everything you need to know about the KPIs of SMS marketing campaigns.
Benefits of Investing In an SMS Marketing Campaign
Text messaging is growing as a marketing channel, despite it being one of the oldest forms of communication of the digital age, because it has various benefits that even the newest social media platforms can’t compete with.
1. Immediacy
Text marketing can achieve instant results because it is an instant communication channel. The message a business wants to convey can be sent to a large list of phone numbers at once and will be read and responded to by customers on their SMS subscriber list in a matter of minutes. We tend to bring our phones everywhere with us so we quickly notice when we get a new text and will read it as soon as possible to see what it’s all about. With texts, there’s no logging in to check your inbox or feed. Whether you have the latest iPhone or a flip phone, text notifications are always available.
So, within minutes of announcing a new product to your target audience, you could be getting sales, especially as text marketing has such a good conversion rate. SMS allows businesses to communicate with their customers in real-time. That’s powerful.
2. Two-Way Communication
The calls to action on an SMS marketing campaign are easy for customers to respond to at the moment. That’s why the response rate is so high. Text messages can include CTAs with direct links to landing pages or payment pages, taking customers straight to where they can complete the sale. This doesn’t even need to be about boosting your conversion rate, you could send out a link to leave your business a review to increase the social proof you have available and gather feedback.
Don’t forget that text messages are designed for two-way communication and using it in this way can up your engagement rate. With the right SMS marketing platform, customers can respond to the texts they receive from businesses and speak to a customer representative. The conversational nature of texts boosts customer engagement and increases the chance of making a sale because customers receive good customer service and can get all the information they need to make a buying decision.
3. Segment and Personalize
With text marketing, businesses can be very intentional about who on their subscriber list receives what marketing messages to optimize the experience, keep the customer engaged, and guide them to their next purchase. For example, a business could segment its subscriber list based on the products and services leads have shown interest in. Then when there’s a sale on a specific type of product, the campaign can be sent to the relevant segment so as not to overwhelm people.
SMS campaigns can also be sent out according to the stage a subscriber is at on the customer journey. For example, businesses could follow up with new customers who have just bought a product. Or service-based businesses could send their customers a reminder when it’s time to book another appointment for a new service. What matters is that customers receive the most relevant marketing messages when it’s most relevant to them.
As a bonus, SMS marketing works well with A/B testing. If there is a text message going out to a significant number of subscribers, create two versions of it and randomize who receives what to gauge which is the most impactful. This makes optimizing your SMS strategy so much easier.
4. Potential ROI
SMS marketing is a cost-effective way to market a business. Text messages won’t add too much to your marketing costs, especially compared to other marketing campaigns like paid advertising. All businesses need is a tool to manage the phone numbers and other contact details of SMS subscribers and a text messaging service to send the text messages, either on a subscription or pay-by-text basis. Businesses can get two in one by signing up for an SMS marketing platform. The cost of implementing text message marketing is very manageable considering the higher ROI it can achieve.
As well as achieving instant results, SMS marketing supports businesses in the long term as it can increase the lifetime value of customers. After making their first purchase, businesses can nurture customers over text, following up with them, asking for feedback, offering exclusive deals, and creating multiple positive interactions that build the relationship. They can make sure customers know about sales, new products, and anything else that will encourage them to make a repeat purchase. It’s going straight to their phone so businesses don’t have to rely on customers to read their emails or hope the social media algorithm shows a post on the feed of their customers.
There are more than enough reasons to add SMS campaigns to your marketing strategy. To ensure the best possible results, it’s always a good idea to track key metrics that quantify the impact of your marketing efforts. The top metric for any marketing campaign is the return on investment. How do you work out whether you’re getting your money’s worth from text marketing?
How To Calculate ROI of an SMS Marketing Campaign
At the end of the day, you can only deem SMS marketing as worth your investment if it has a good ROI for your business. So as you experiment with sending text campaigns, use this calculation to determine your ROI.
It’s pretty simple…
- First, add up what you spent on the campaign. This includes the cost of the text messaging service and any other tools you use as well as the cost of getting someone to write the campaign and then schedule it to be sent to the right contacts.
- Then work out how much you earned from the campaign. How many people who received the text, opened it, and clicked through to view the product completed the sale?
- From there, you subtract the cost of the campaign from the amount you earned and multiply it by 100 to turn it into a percentage. Easy.
It’s good practice to run this calculation regularly to ensure you are maintaining a worthwhile ROI. Also, it could highlight patterns in what campaigns convert best, enabling you to do more of what works. You might even find that certain campaigns work best for different segments of your subscriber list. The more you know about your target audience, the easier it will be to convert them.
What is a Good ROI for an SMS Marketing Campaign?
Most businesses want to at least be hitting the average ROI for text marketing, if not exceeding it. But working out what the average is can get complicated. It can vary on the size of your subscriber list, other text marketing metrics such as the open rate, CTR and conversion rate, and, of course, the price of the product. For example, a good conversion rate is around 25-45%. The size of a business subscriber list will determine how many sales that is. The price of the product will determine how much money is generated from the number of sales and then you have to see how that stacks up against the cost of running the campaign.
So, it can be useful to track all metrics relevant to SMS campaigns alongside the ROI because providing the full picture will allow you to identify where things have gone wrong (or right). When looking at all the metrics, you could see a drop in open rate so fewer people reading the message, or a failure to convert even a good percentage of people who clicked through to the landing page. Then you can optimize and achieve a higher ROI next time.
When it comes to choosing the right tool to help you effectively implement SMS marketing and maximize your results, choose Podium. Podium has everything you need to ace SMS marketing and maximize your ROI. Our text messaging service is natively linked to all our other tools including our customer contact CRM and omnichannel inbox. No customer or conversation will slip through the gaps.
We also have a payment service and review management service so you can collect payments and reviews with ease. Use text marketing to build your revenue and your reputation. The Podium platform comes with an AI assistant that helps you respond to customers with immediacy and maintain a high level of customer experience. Don’t miss out on technology that can streamline your processes and propel your business forward.
