SMS Marketing ROI

by | Apr 4, 2022

How Do I Measure ROI from SMS Marketing?

Depending on your marketing goals, there are a number of useful ways to measure the ROI of your SMS efforts. Companies usually use SMS in their businesses in 3 ways:

1. Sending out a mass text to a group of subscribers with a coupon, promotion or other way of revenue generation

2. Engaging with customers/clients through text

3. Using SMS for support purposes, to allow customers to chat with a support representative through text message.

All of these different ways can be thought to produce a financial return to the business using them.

Profit

The basic way to measure SMS marketing ROI is to compare the amount of money you spend for the SMS service to the amount of money you make from the campaign.

Profit is measured by subtracting costs from your revenue.

For example: Jenny’s online store has a list of 450 subscribers. She sends out a coupon campaign once a month to all 450 contacts using Texting.io. According to the Texting.io pricing, sending 450 SMS per month puts Jenny in the Basic tier and costs her $25.

If her campaign makes her $100 in profit, her ROI is 400%, or 4 times the amount invested.

If her campaign makes $200 in profit, her ROI is 800%.

Engagement

For companies that use SMS as a way to drive engagement, ROI can also be measured in terms of new subscribers to an autoresponder.

Example: Sheila is a real estate agent using text messages to be more engaging with potential buyers. She posts her Texting.io phone number online as well as on promotional material and creates an autoresponder in Texting.io for the keyword “Info.” Now, whenever someone texts “Info” to her Texting.io phone number, her autoresponder sends them a welcome message, and a link to the listings on her website with 3D online tours.

The autoresponder also adds each new signup to the corresponding list, allowing you to contact them later.

Businesses that are looking to increase engagement would count the added Subscribers as ROI.

So, if a business spends X on promotional material (flyers, online ads, direct mail, etc.), their return would be measured by the number of new subscribers they get.

The cost per subscriber would be measured by: Number of new subscribers divided by the total cost.

Communication

For companies that use SMS for customer support, ROI can be measured in a few different ways.

They key to good customer support is timeliness, professionalism and accessability. Implementing SMS into your communication channels can help save time, increase customer engagement, as well as ensure that your message is being delivered.

Texting.io allows you to add unlimited sub-users to your account and set permissions for each user. This lets managers oversee support staff, and segment account responsibilities for more advanced use cases.

What Kind of ROI Can I Expect from SMS?

I know what you’re thinking. This is all well and good, but how much money can texting truly make me?

Historically, the average monthly ROI of polled Texting.io users who use SMS marketing for revenue generation* is 500%.

It is important to note that this was polled from our own users and was conducted on an opt-in basis.

*Marketing offers, promotions, coupons, etc.

What are some Other Important Metrics?

One KPI that you should keep in mind (even though it’s not necessarily a measure of ROI) is your opt-out rate. This is the number of recipients that unsubscribe (text back Stop) compared to the number of recipients in total.

If your unsubscribe rate is too high, that might be an indicator that your offers are not resonating with your subscribers. You should try changing up your offers, or perhaps not sending your texts as frequently. The key is to remain top of mind without being intrusive. What this means is different for each business.

Conclusion

In conclusion, the ROI of SMS marketing can differ depending on which use case you are looking at. If you’re interested primarily in the revenue generating capabilities, a 500% ROI is the standard for well researched and optimized SMS campaigns.

For all use cases, SMS is a powerful communications channel that brings in profit, increases customer engagement and customer lifetime value.

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