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.
Incredible Numbers
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.
Why These Numbers Exist
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.
Related Articles
SMS Marketing in the Financial Sector
With the rapid increase in technological development that defines the 21st century, companies across all sectors are looking for ways to stand out from the crowd. In the modern, technological economy, a company’s ability to connect with its customers and provide top-quality user experience (UX) is fast becoming an essential component of any successful business. Customers now have the ability to thoroughly search the market to find a company that can provide them with the best possible deal. In a corporate environment that is more competitive than ever, what is the best way to truly stand out from the crowd? One of the fastest growing techniques is the use of SMS marketing.
Can SMS Messaging Help Banks Manage “Mobile Disruption”?
Around the world bank branches are disappearing. Just yesterday I received an email from Business Intelligence (BI) predicting the doom of US bank branches and cash machines. Their data is based on US economic and survey data, but others have done similar research in the UK and the world. And they all agree: the days of the local branch bank office are soon to be over.
5 Ideas for Awesome SMS Marketing Campaigns
5 Reasons SMS Marketing is Ideal for Retailers
How SMS Messaging Can Help Get Buyers Back
E-commerce businesses have a huge problem. Consumers fill up their shopping carts, then rudely abandon them before completing a purchase. Of course, they don't mean to be rude, they have their reasons for leaving a full cart behind. But what if it were possible to get some of those sales back?
5 steps to effective call deflection
Winter SMS Marketing Tips for Mechanics
How are companies sending all those SMS messages illegally?
Business SMS Marketing: Striking the Right Tone
Tone of voice is important in all business communications, from letters to direct mail campaigns. The way you speak to clients is all of a part of the image you create in their minds of your brand. As short as they are, this also applies to business text messaging. It may even be more important to get the language and tone right in your messages, particularly your SMS marketing, than in an emailed leaflet.
SMS and the Future of Sales and Marketing
Four years ago, reputable commentators in The Guardian were wondering if SMS - short message service or text messaging - had peaked in performance after a two-decade exponential rise. Here we look at the evidence which shows that SMS is not only going strong, but continuing to stand out as an essential marketing channel for many businesses.