How to measure the success of your SMS marketing campaign
It's impossible to create and execute successful SMS marketing campaigns without measuring key metrics.
SMS marketing involves sending promotional campaigns or transactional messages for marketing purposes using text messages.
About 85.6 percent of consumers are now opted in to receive texts from at least one business. Text message open rates remain as high as 98 percent, and about 45 percent of consumers reply to brand text messages they receive, compared to roughly 6 percent for email.
Clearly, SMS marketing offers you the opportunity to better connect with your potential and existing customers, and used well, it can boost your customer retention too. So, your metrics matter.
The following are seven ways to measure the success of your SMS marketing campaign. These metrics will help you track progress toward your goals and maximize your efforts.
| Metric | What it tells you |
|---|---|
| Interaction rate | How many recipients took action on your message |
| Conversion rate | How many recipients completed the specific goal action |
| Delivery rate | How many texts actually reached a phone |
| Unsubscribe rate | Whether your frequency or relevance is off |
| List growth rate | Whether your subscriber base is expanding |
| Customer acquisition cost | What you're spending to gain each new customer |
| Return on investment | Whether the campaign is worth the spend |
Interaction rate
The interaction rate for an SMS marketing campaign is the measurement of how many text recipients take action after receiving your message.
These actions include clicks, clicks-to-call, app opens and so on. And it's expressed as a percentage: Total clicks (or another action) divided by delivered text messages times 100. Current benchmarks put average SMS click-through rates somewhere in the 20 to 35 percent range, though this varies significantly by industry and message type.
If your interaction rate is high, it means that your SMS marketing campaign is relevant to your users. If not, there's room for improvement.
Conversion rate
The conversion rate of an SMS marketing campaign refers to the percentage of recipients who completed the desired action as a direct result of receiving your text message. This could include redeeming a specific coupon or recovering an abandoned online shopping cart.
You can calculate this by taking the number of conversions and dividing it by the total number of messages sent (and times that by 100).
Typically, you can expect higher conversion rates with SMS marketing than with email marketing, with SMS campaigns often converting in the 21 to 30 percent range. This is because SMS subscriber lists are usually highly engaged, considering that the act of providing your phone number to a business means that you're interested in that business's products or services.
The conversion rate is different from the interaction rate because you're measuring actual conversions versus any interaction or engagement because of your text message.
Delivery rate
Your SMS text message delivery rate refers to the number of messages that reached subscribers' phones divided by the total number of texts sent (times 100).
High deliverability rates indicate that your texts are successfully reaching their intended target. A low deliverability rate could mean a few different things, including:
- Invalid phone numbers
- Low SMS gateway network quality
- Spam filters or other carrier violations
Learn more about carrier violations and how to avoid them in your SMS marketing campaigns.
Tracking your delivery rate gives you a better understanding of the quality of your database. This also could show whether your messages are getting flagged and blocked by carriers.
Unsubscribe rate
You'll see the percentage of subscribers who unsubscribe during your SMS marketing campaign through your unsubscribe rate.
This is calculated with opt-outs during a campaign being divided by the number of subscribers at the beginning of the campaign period (times 100).
There are many possible reasons why subscribers would opt out of your SMS marketing contact list. It's possible that you never properly opted them in or are sending too many text messages. Frequency is one of the most commonly cited reasons subscribers give for opting out, so it's worth checking your unsubscribe rate against how often you're actually texting people. Or, your subscribers don't recognize your business phone number, feel that your texts are misleading or spammy or no longer find your text messages valuable.
If you're seeing a high unsubscribe rate, it's important to evaluate the possible reasons why and whether they're within your control. Personalizing and segmenting your messages, rather than blasting the same text to everyone, is one of the more reliable ways to keep this rate down.
List growth rate
Your list growth rate is based on how much your subscriber list has increased during the duration of an SMS marketing campaign.
You can calculate this by subtracting unsubscribers from new subscribers. Then, divide that number by the total number of subscribers during the time of the campaign (times 100).
In general, you do want to continually grow an engaged list of subscribers to extend your reach and stay top of mind, especially since there will always be unsubscribers.
Customer acquisition costs
Your customer acquisition cost is the amount you spend to gain a new customer. You can calculate this by dividing the total cost of your campaign by the number of customers you acquire (times 100).
If you're seeing high acquisition costs, you might be targeting the wrong audience, segmenting your lists incorrectly or not sending relevant messages to your text recipients.
Return on investment
You always want to measure the return on investment (ROI) in any marketing campaign, including for SMS marketing. SMS marketing remains one of the highest-ROI channels available, with estimates ranging from roughly $21 to $71 in revenue for every $1 spent, depending on industry and how automated your campaigns are.
To calculate, you'll want to subtract your total investment from total sales. Then, divide that number by your total investment (times 100). When calculating, you can select a regular interval for calculations during ongoing campaigns. This can be monthly or annually or at another interval.
Use this metric to compare against your campaigns on other marketing channels. This will help you to better understand where your budget should be spent.
In conclusion
Your SMS marketing campaigns can deliver results for your business. However, you must track these important metrics along the way to best optimize your campaigns and pivot when necessary.
Check out our eight tips to maximize your brand's SMS marketing strategy.