In short. Yes. Yes. It is worth it. As customers become harder than ever to reach, SMS marketing is making a comeback. Brands love the 98% open rates, customers love the convenience. In this guide, we break down best practices and how to get started.
What Is SMS Marketing?
SMS marketing refers to the use of text messages to promote a business’s products and services, as well as build customer loyalty. This digital marketing strategy is often referred to as mass texting. It works similarly to email marketing but has been shown to be significantly more effective.
SMS marketing has come a long way since the early 2000’s. It’s no one-trick pony. Businesses use it to:
- Boost sales: Send promotions, discounts, and limited-time offers to grow revenue
- Build relationships: Provide customer service and support with 2-way conversations
- Engage your audience: Quickly share important updates and new content
- Generate excitement: Host text-to-win sweepstakes or text-to-vote polls
- Collect leads: Allow potential customers to sign-up for texts or send in one-off questions
- Nurture leads: Follow-up with leads and keep them engaged with the occasional text
Wait, texts can do all of these? Yes.
Does SMS Marketing Really Work?
Yes. On average, 98% of all text messages are read. And 90% of those messages are read within just three minutes.
With digital marketing channels like social media, you could have the greatest marketing messaging in the world—but the algorithms only show your content to a fraction of your followers. And with email, you can spend a lot of time on design and copy that ends up in a spam folder or is just plain ignored.
That’s why texts are the ultimate marketing medium. They’re easy to send, and almost always read by your audience.
Benefits of SMS Marketing
In our 2020 SMS marketing report, we surveyed hundreds of U.S. consumers, business owners, and marketers. According to the data, 60% of businesses reported that they plan to increase their text marketing budget over the next year.
Here’s why:
Case study after case study backs up the effectiveness of SMS.
From higher customer satisfaction to increased conversion rates, businesses that use mass text messaging are reaping the benefits.
Measuring the Results of Text Message Marketing
A common misconception is that marketing via SMS can’t be measured. The truth is, just like email, you can easily see if it’s driving ROI.
Common SMS marketing benchmarks include:
Click-through rate (CTR)The average email open rate is just over 21%. The CTR is under 3%. With texts, 98% of messages are opened and links receive an average CTR of 17%.
Conversion rate
This is how many people took an action—such as making a purchase—after clicking your link. You can use Google Analytics and UTM parameters to determine the conversion rate of your texts, for free. The average SMS conversion rate is about 45%. Much higher than other marketing tactics.
Why is it so high?
Well, consider the fact that people who sign up for your texts are your most engaged fans. They want to hear from you. This is the last group of people who you’d want to miss out on by relying on email alone.
On top of this, people spend close to three hours a day on their phones–making it less likely they’ll miss your message.
List growth
Without a list of phone numbers, you have no one to message. Steady, consistent list growth is a good indicator of success. Later in the guide, we cover how to grow your list.
Unsubscribe rate
Churn happens. People will inevitably reply STOP to your message. Once they do, they will no longer receive messages. Unsubscribe rates vary by industry, but as a rule of thumb, it should be less than 3% per campaign.
ROI
The big kahuna. This lets you answer whether SMS is making you money or not. Just take a look at the purchases made or influenced by SMS, subtract how much you spent sending the messages, then divide by the total amount spent on SMS marketing.
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