3 SMS Marketing Metrics That You Need to Know
Congratulations! You’ve got huge list of people on your SMS marketing list. Now you’re sending out offers and you think it’s going well. But is it? How can you know for sure?
All you really need is a few good metrics that help you understand if your offers and messages are performing well. In this blog, I’ll cover three of the basic ones every SMS marketer should be using.
No matter how good your offers or messages are, people will opt out. And that’s ok. Well, I should say it’s expected. But how can you know if too many people are opting out?
The best way to start answering that question is to calculate your opt-out rate. It’s defined by the number of people who opted out divided by the number of people on the list. Be sure you use the original number for the list, not the reduced number after opt-outs.
For example, you have 100 people on your list. After sending out a message, 3 people opt out. Your opt-out rate is 3 divided by 100 which equals 3%. If you divided 3 by 97 (the new number of people on the list after the opt-outs) you get a rate of 3.1%. It’s a small difference in this example, but if your list has thousands or millions of people on it, that .1% equates to a large number of people. And you’d falsely believe more people left than actually did when you look at the percentages.
This metric should be calculated after every message you send. In time, you’ll generate enough data to know what your “average” opt out rate is for your business. It also helps you quickly identify if something went wrong.
A sudden increase in the opt-out rate after a message probably means something went awry with that message. Was there a typo? Was it sent out at a bad time of day? Was it unclear, frustrating or even offensive to people on the list? Take the time to find out so whatever happened isn’t repeated.
If you choose, you can also run averages over time so you have monthly, quarterly or even annual percentages to use for comparison. This could give you insight into whether you have seasonal variations for example. You can also correlate the rate to details like day or time the messages were sent. By doing this you can identify the best times for your offers.
What should you aim for in opt-out rates? Well, you want them to be low obviously. But there isn’t any solid data to give a blanket answer. The recommendations I’ve seen around the web consolidate around 3%. But I’ve seen marketers say they strive for less than 2%. You’ll have to determine what an acceptable rate is for your business.
You have people on your list, you know your opt-out rates, but are people taking the action you want them to? Or are the messages just accumulating in their inbox?
Ideally, the messages you send are intended to drive sales, attendance, donations – whatever your business needs. You can measure whether the message content is working by calculating the percentage of people who took action on it. “Action rates” isn’t really a metric on its own though. I’m using it as a catch-all term for click through rates, redemption rates, signup rates, donation rates, visit rates – whatever action you we asking people to do.
Here’s an example for click through rate. It’s defined just as it is for other forms of digital advertising: The number of people who clicked the link in your message divided by the number of messages sent.
However, in SMS marketing, links aren’t the only action people can take. If you send a coupon code to be redeemed in-store rather than online, you can do the calculation the same way, but use the number of redemptions instead of clicks.
Of course, you could also send coupons with links to mobile websites. In that case, you could calculate both the click through rate and the redemption rate for that one message. Whatever your call to action is, be sure you’re able to calculate how many people followed through.
When you send out SMS messages, can you be certain they are all delivered without issue? Not necessarily. The number of messages delivered, divided by the number of messages sent is the delivery rate, and it should be nearly 100%.
But there will always be some people that disconnected or changed their mobile number for some reason. Those messages will go undelivered. Usually, this isn’t too much of an issue though.
But you still want to keep an eye on your delivery rates for two reasons.
- If you’ve outsourced your marketing to a third party, or purchased a third-party list.
If there are a lot of undelivered messages, you might have a bad list – or you’ve made a poor choice in your outsourcing. While it is possible to do SMS marketing using a third party, the responsibility is still on you when it comes to the rules and regulations regarding direct marketing. So, if your delivery rate is not very close to 100% you will want to investigate why that is.
Beyond the fact that people can’t take action on messages they don’t receive (i.e. you’re throwing money away), you could be putting your brand at risk if the lists you’re using aren’t compliant with ICO regulations.
- Your SMS provider isn’t using Tier 1 routes, or is using a combination of Tier 1 and other routes.
There are a lot of SMS providers promising low cost messaging. After spending over 15 years in the industry, we can tell you that prices can only go so low using Tier 1 routes. These are the ones maintained by the carriers and organisations for official use on their networks. There is a cost to using them, especially international routes.
So, any provider that says they can do it much cheaper than anyone else isn’t using those routes. They are often just sending the messages over the internet, or re-routing through various countries in order to avoid the fees legitimate providers, like fastsms, must pay. When messages are sent this way, there is no guaranteed delivery. And oftentimes, the providers can’t even give you a message status because they don’t know what it is.
The “cost” for using these other providers is most often a much lower delivery rate, or the inability to provide a delivery rate at all (unless they make it up). If you can’t get a straight answer, or the number you get is much below 100%, you may want to rethink who you want to use for an SMS service provider.
SMS marketing is many things. One of the most important and useful things is how easy it is to measure how effective it is. Keep an eye on the metrics listed above and you’ll be able to know for certain how it’s working for your business.
Yet another company (Quigley and Carter Limited) have been fined by the ICO for not having permission to send SMS messages. In this case, they had outsourced their marketing to a third party who then sent messages on their behalf. So is staying compliant with the regulations regarding SMS messaging so difficult? It doesn’t have to be.
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