Proof SMS Messaging Gets Results: ROI

There are many ways to measure effectiveness of a marketing campaign. In fact, this entire Results Series is based on the different approaches people use. So far, we’ve covered opt ins, traffic, and conversion rates. But one of the clearest proofs that your campaign is working is return on investment or ROI.

If you don’t get a return, then what you’re doing isn’t good in some, or all, respects. But never fear, ROI is here (sorry, I couldn’t resist!). SMS messaging has an almost unbelievable story to tell when it comes to ROI.

If you’ve been following this Results Series, you may already suspect you’re about to see some incredible numbers. So far conversion rates, increases in traffic, and opt-ins have been much higher than with most other forms of marketing. Combine that with how affordable SMS is and it makes for some amazing ROI. Here are samples of what I found:

• 6,600% from a woman’s clothing store
• 4,000% from an auto dealer
• 4,200% from a cooking school
• 1,400% from a fast food restaurant

Unbelievable, yes? Trust me, when I first saw the 6,600 percent ROI I thought it was an error. I carefully read the case study and did the maths myself. It was correct, as are the others in the list above.

For example, the last one list earned the fast food chain $14 for every $1 they spent (this case study was from America, obviously). The SMS offer they sent had a 19% redemption rate, and it resulted in the high ROI of 1400%.

The others listed above are all single campaign ROIs. That is, the response is based on sending one SMS message out (to many people of course), and the amount of return based on that message. Will every campaign get these kinds of numbers? It’s hard to say. I do think it can be said that high ROI can be expected nearly every time, assuming the business follows best practices. If they send out a poorly constructed offer, or they have the timing off then perhaps the response won’t be so good. But all things being equal, SMS offers some of the highest possible ROIs.

So why does SMS have these incredible ROI percentages? It all comes down to two things: cost and action.

It starts with the affordable cost of SMS messaging. It would cost just £35 to send 1,000 messages at current fastsms pricing. That’s just 3.5p per message. At these low costs, it doesn’t take much to break even. After that, everything becomes positive ROI. And if you need to send more messages, the cost goes down per message. Even sending a million messages is still surprisingly affordable.

The other factor, action, is reflected in the high conversion rates for SMS messages. Mobile coupon redemption is 10 times higher than email. Click through rates average in the double digits across all industries. Some examples from the last blog are 17-92% CTR!

These two combined create the possibility of huge ROI numbers. This is why many companies are investing more into SMS, or text message, marketing than other traditional channels. But I’ll write more about that in the blog on how SMS helps businesses grow. That topic will post in two weeks. Make sure you come back to read it, and also next week when I’ll share how SMS is helping businesses improve sales and customer service.