Measuring SMS Marketing ROI: Metrics That Truly Matter

Measuring SMS Marketing ROI: Metrics That Truly Matter

5 minutes, 35 seconds Read

SMS marketing offers a singular opportunity to connect with customers directly and personally in today’s world which is becoming more and more mobile-centric. It’s not surprising that forward-thinking brands are utilising the power of text messages given their astounding 98% open rate, which is significantly higher than email’s average of only 20%, according to Mobile Marketing Watch. The most successful but least understood marketing tool is SMS.

How can this be changed to fully utilise SMS marketing for your online store? The solution is found in a calculated strategy. Your SMS marketing return on investment (ROI) can be significantly increased with a carefully thought-out strategy. This article will help you navigate the process of mastering SMS marketing, from recognising its potential to investigating workable solutions and taking inspiration from actual achievements.

What is ROI in SMS Marketing?

The ROI for SMS gateway is the amount of money you make using this strategy. In essence, it’s how much you earn compared to what you initially invested.

What do key performance indicators (KPIs) for SMS mean

KPIs are a set of objectives and metrics that assist you in assessing the success of your programme.

Three categories typically characterise SMS KPIs: 

  1. How many new subscribers are you adding to your list? How many of your subscribers are still with you, and how many are leaving? What sources are most responsible for opt-ins?
  2. How is SMS helping your bottom line? Revenue growth. What is the return on investment (ROI) or return on ad spend (ROAS) for your programme?  
  3. Engaging messages: What kinds of triggered messages and campaigns are your subscribers responding to? Are your messages getting through to them? Are specific message formats or send times causing a higher rate of opt-outs? 

In the end, SMS KPIs assist you in making better choices regarding how to allocate your time and resources. Analysing your data will allow you to identify opportunities for optimisation, quantify the effect SMS has on your brand, and choose which initiatives to fund. 

Measurement Obstacles for SMS Marketing ROI

Although determining the return on investment (ROI) for SMS marketing is essential to understanding its efficacy, it does present a unique set of difficulties. Let’s examine a few of them:

  1. Market Attribution: One of the most challenging parts of calculating the ROI of SMS marketing is attribution. It can be challenging to follow a customer’s journey from receiving an SMS to making a purchase, unlike some other digital marketing channels. This challenge results from the fact that customers frequently visit your website separately or go to a physical store, if you have one, before making a purchase.
  2. Cost tracking: Depending on how your SMS campaigns are set up, keeping track of costs precisely can be difficult. This is especially true if you are sending out various SMS message types, each with a different cost. You must take into account the cost of sending the messages as well as any costs associated with additional content or offers when calculating your ROI.
  3. Lack of Analytics Tools: While there are tools for analysing the performance of channels like social media or email marketing, there aren’t as many or as well-developed analytics tools for SMS marketing. Data collection and analysis may be more challenging as a result of the lack of robust tools.
  4. Time Factor: It’s critical to gauge ROI over the proper time frame. The recipient of a text message might decide not to respond right away. Choosing how long to wait before evaluating the efficacy of an SMS can be difficult and may change depending on the nature of your business and the particular campaign.
  5. Determining Success: It can be challenging to determine what constitutes a successful SMS marketing campaign. Are you trying to increase brand engagement, website traffic, or sales? For each, a different set of metrics will be needed to determine success and ROI.

Indicators of a successful SMS marketing ROI

Of course, a high ROI is the desired outcome, but how can you tell if you’re on the right track? To find out, you’ll need to investigate some important metrics.

  • Rate of message delivery

This has to do with how often your messages are sent correctly—in SimpleTexting, this is referred to as your “success rate.” A high delivery rate gives your texts their best chance to perform because your customers can’t react to things they’ve never seen.

We at Guni advise aiming for a delivery rate of more than 90% as a best practice.

  • CTR, or Click-Through Rate

How many people clicked any links you included in your texts is indicated by your CTR. In essence, it’s a great way to track whether recipients of your texts are responding to them and acting on your calls to action.

More of your customers will move towards a sale if your CTR is high, which will increase your ROI.

  • Open Rates

High open rates from text marketing are typical; they can reach as high as 98%. This indicates that your text campaign’s target audience read the message and received it.

Because this interaction is essential to generating profitable customer activity, open rates are a leading indicator of SMS marketing ROI. Open rates are a good indicator if you only consider one.

  • Rate of Conversion

Your conversion rate is the proportion of subscribers who completed the action you asked them to complete versus the number of subscribers who initially received the message (typically, that’s customers who complete a purchase, but it can vary).

A high conversion rate indicates that customers are taking advantage of your offers or requests, seeing the value in your brand and that your messaging is on target.

How frequently should your SMS metrics be analysed? 

When launching a new campaign or triggered message, we advise checking SMS metrics once a week to inform campaign planning and rolling edits. For your tried-and-true initiatives, we advise monthly analysis of your numbers. Finally, you ought to conduct a quarterly business review (QBR) to assess your performance on the yearly targets set for your team. 

SMS Pro Tip: Constantly A/B test the messages and journeys of your SMS campaigns to find the messaging that connects with your audience the most, spot areas for improvement, and open up new engagement.

Final Words

Strategic SMS marketing can mean the difference between becoming invisible and standing out from the competition. You can maximise the effectiveness of this potent marketing channel by knowing your target market, creating compelling messages, carefully monitoring ROI, and constantly improving your strategy. 

With the knowledge and tactics we’ve covered in this post, you’re well-equipped to harness the power of SMS and take your e-commerce business to new heights. The road to maximising your SMS marketing ROI is one of constant learning and adaptation.


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