Do you track your SMS marketing ROI?
If youโre just sending text messages to some people without analyzing the performance of your SMS marketing campaign, youโre wasting your time and money.
In this blog post, weโre going to explain why you need to measure your performance when running an SMS marketing campaign and how to increase the ROI of your campaigns.
What Is ROI & How Do You Calculate SMS Marketing ROI?
First, letโs define what SMS marketing ROI is.
Return on Investment (ROI) is a measure of profitability for each business effort, and marketing is no exception.
ROI tells you how much return youโre getting from your investment and this way, you understand if youโre performing well.
The SMS marketing ROI has a simple formula:
ROI = (Total Revenue Generated โ Cost of SMS Campaign)โ/(Cost of SMS Campaign)*100
Using this formula, you can evaluate how effectively your SMS campaigns generate revenue compared to the costs.
Of course, sometimes you might face difficulties when calculating the ROI of SMS marketing.
The reason is that tracking the revenue sources is easy and you need advanced analytics tools to track the performance of your campaigns to understand the result of each one.
10 Ways to Maximize the ROI of SMS Marketing Campaigns
Now, letโs review 10 top tips for increasing the ROI of your text message campaigns.
1. Personalize Messages for Higher Engagement
Although your goal is to sell a product/service, you should appear too promotional. In fact, you have to personalize your message and make recipients feel like youโre one of their friends, not just a seller.
There are several ways to personalize your messages. Here are some examples:
- Use the recipientโs first name to create a friendly, engaging tone.
- Send personalized offers based on each personโs data.
- Recommend products based on past purchases.
- Follow-up messages to see if the customer is satisfied.
Take a look at the following SMS template to see how a personalized message is:
Message
Personalization is a crucial factor in higher engagement rates and customer trust.
Thanks to advanced data analytics tools, you can now easily customize text messages according to each customerโs data.
2. Make Messages Interactive
Nowadays, people like to be heard so you should send just some texts. One good way to make people engage with your messages is to use interactive items like:
- Polls
- Quizzes
- Clickable links
These elements make your customersโ experience more enjoyable. You can also use these items to encourage recipients to take immediate action.
Of course, when your subscribers see you asking their opinions using polls and other methods, they feel theyโre part of your brand story. This loyalty leads to higher SMS marketing ROI.
Here is an example of using interactive messages to get higher SMS marketing ROI:
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3. Incorporate Rich Media Content
Thanks to advancements in smartphones, you can now include rich media, such as:
- Images
- GIFs
- Videos
- Emojis
Rich media makes your SMS more attractive and therefore, your recipients will likely engage with it.
This is especially effective when it comes to youngsters and teenagers because they like visually appealing experiences.
This drives higher click-through rates, leading to higher ROI for your SMS marketing campaign.
Here is a template of a rich-media SMS:
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You just need to fill this message with your business details including link to an image.
4. Implement Two-Way SMS Marketing
One-sided messaging is outdated. You have to give your customers a say and two-way SMS is the best method to do that.
Tools like WP SMS allow customers to reply and this creates a conversation rather than a monologue advertisement.
Here are what customers can do using this feature:
- Canceling the WooCommerce Order
- Getting the information from the order
- Reordering in WooCommerce
- Opt-In to SMS Newsletter
- Cancel Subscription (Opt-Out) in SMS Newsletter
When you offer such services, youโll gain the trust of your recipients and this will lead to increasing the SMS campaign ROI.
5. Use AI to Reach Higher Efficiency
Artificial Intelligence (AI) is transforming all aspects of our lives and businesses. SMS marketing can benefit from AI and reach higher ROI.
Here are some examples of using AI-powered techs in SMS marketing:
- Abandoned Cart Reminder: You can use AI to prioritize the abandoned cart reminders and automate the process. Here is an example:
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- Personalized Product Recommendations: How do you suggest new products to previous customers? AI can do that in the best way. here is an SMS template of this kind:
Message
- Location-Based Promotions: Sending automated messages based on location is another use of AI.
Overall, AI can greatly help with laser-targeting and automation in SMS marketing. Using AI, you can analyze customer behavior patterns. This also allows your brand to send messages with relevant content at optimal times.
As a result, you can reduce the cost of your campaigns, which means a higher SMS marketing ROI.
6. Segment Your Audience Effectively
We talked about personalization, now letโs learn about segmentation and the way it can increase your SMS marketing ROI.
You need to segment customers into various groups based on factors such as behavior, demographics, or purchasing habits.
This way, you can send ads to the more relevant group and get higher engagement rates and ROI.
Segmentation helps you send targeted messages, like reminders for abandoned cart items, loyalty rewards, or event notifications.
For example, if you have a fashion store, you can segment your audience based on gender. Take a look at the following SMS samples to learn how:
Example 1: Women
If you have a segment for women, you can offer specific clothes to them and increase your chances of selling your products.
Message
Example 2: Men
Similarly, you can offer clothes relevant to men and attract them to your store:
Message
7. Use Automation for Timely and Relevant Campaigns
One of the greatest opportunities to reach out to customers is events like birthdays, purchase anniversaries, or reminders of abandoned carts.
Of course, even small businesses canโt manage to send all of these messages manually. Thanks to advanced SMS tools like WP SMS, you can use automation to ensure that your SMS campaigns are sent at the right time.
Automation tools can save you time and energy and reduce your costs, which means a higher SMS marketing ROI.
Example 1: Appointment Reminder
Reminders are among the best uses of automation tools and have a great impact on your campaignโs efficiency:
Message
Example 2: Birthday Reward
Birthday messages are also another application of automation and can gain the trust of your customers and strengthen your partnership with them:
Message
8. Integrate SMS with Other Marketing Channels
Although SMS is an effective means of marketing, you canโt solely rely on it to reach the best result.
For maximum impact, you should combine SMS marketing with other channels like social media, website, and email to make an omnichannel strategy.
For example, when you install WP SMS on your WordPress website, you can easily integrate your marketing into your websiteโs strategies. These two can help each other, leading to a more efficient campaign.
Take a look at the following example of a combined marketing strategy:
- SMS:
Message
- Email:
Message
- Social Media:
Message
- Website: Now, you have to feature a winter collection banner on your websiteโs homepage. Also, itโs good to link to product pages to direct visitors where they can make the purchase. Finally, add an option to sign up for SMS and email and encourage them by offering exclusive seasonal discounts.
9. Offer Exclusive Promotions and Discounts
Customers love VIP offers. SMS is an ideal channel to create such a sense. For example, when you send special offers to a customer, he/she thinks that theyโre special and part of your story.
So theyโre highly likely to accept your offer and become more loyal to your brand. As a result, sending discounts or promo codes through SMS encourages customers to take immediate action. Of course, this will lead to higher ROI for your SMS marketing campaigns.
Here is an example of a VIP SMS:
Message
10. Use A/B Testing to Optimize Messages
A/B testing (also known as split testing) helps you determine the best format for your text messages.
You can consider variables like the wording, timing, or type of offer to see what version brings higher SMS marketing ROI.
Here is an example of an SMS A/B test:
- Version A (Urgency)
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- Version B (No Urgency)
Message
In this test, you can see if adding urgency (a short time frame) to the SMS message results in more conversions.
Using regular testing and optimization, you can easily reach success in your campaigns.
Final Thoughts
SMS marketing is one of the easiest and most effective means of reaching out to potential customers and boosting sales.
Of course, the competition is so fierce that you canโt send some text messages and stay for more customers in your store.
You need to constantly track your performance, analyze your weaknesses and strengths, and optimize your campaigns.
One of the most important matters in this regard is the SMS marketing ROI.
You must know how much youโre earning for each dollar spent.
Then, you have to work on details to reduce the costs and increase the earnings. We reviewed several ways to do that.
FAQs
What is SMS marketing ROI?
ROI is the return on investment your company receives. So the SMS marketing ROI is what you earn from all of your text message marketing activities.
How profitable is SMS marketing?
SMS marketing is an effective marketing channel. You can expect a conversion rate of 40% and a CTR of between 15-25%.
What is the average SMS ROI?
It depends on many factors, including the industry, location, and the audience. You can expect about $5 for every $1 spent on SMS, which is a great result.