With over 6 billion text messages sent and received every day just in the US, text message marketing is a powerful tool to be leveraged by businesses. Today, businesses face many options when it comes to the various methods available by which to engage, inform, and entertain their customers via SMS. However, SMS marketing can be costly for businesses, therefore it's crucial to measure text marketing ROI in order to adapt and improve for the future.
What is Text Message Marketing?
Text messaging marketing is the way by which businesses use SMS campaigns to raise awareness, provide information, and disseminate offers and discounts to their customers. This can be done via flash sales, appointment reminders, weekly hints and tips, sweepstakes, competitions and special offers.
Many huge brands all over the world are using SMS marketing as a valuable tool that rewards loyalty, whilst keeping their brand in the forefront of their customers minds. In today's world, there are more mobile phones on the planet than people. Because the majority of people own one or more smartphones, text messaging is a sure-fire way to reach people instantly and from anywhere in the world.
Like any marketing campaign, SMS marketing needs to be measured to see just how successful it is for your business. Are people opening your SMS? How many people are opting out of future messages when a campaign is sent out? How many people are actively engaging with a campaign? How is this directly affecting your overall sales? What needs to be changed before your company uses SMS marketing again?
All of these questions need to be considered when a business decides to add SMS marketing to their overall communications strategy.
What Is The Best Way To Calculate Text Marketing ROI?
To calculate the return on investment for your SMS campaign you'll need four things.
- A Text Marketing Software Platform
A text marketing software platform allows for bulk SMS messages to be sent to many individuals. Essentially, these gateways work by allowing a large amount of SMS messages to be sent out to multiple people at once. They often utilize computer programs so that businesses can create templates and new messages that can be sent out to pre-defined groups or individuals at the click of a button.
Many text marketing software providers offer bulk SMS marketing packages as it is a preferred method of communication for millennials and tech savvy individuals. SMS messages are trusted and efficient ways to deliver information directly to the people that matter to your business.
- A Website
As you'll want to track the efficiency of your SMS marketing campaign it's normally common practice to create a landing page specifically related to the SMS campaign that you are sending. Many SMS marketing campaigns have shortened URL's that lead the recipient directly to a web page that relates directly to the offer or information displayed on the text message.
If you decide not to create a specific landing page related to your SMS marketing campaign, you may add a page to your existing website, or direct customers to a web page that you own that already exists.
- An Analytics Package
This is the glue that will hold your SMS marketing campaign together when it comes to measuring your ROI. An analytics package such as Google Analytics will give you information pinpointing the amount of traffic that your website has received, how long the traffic is spending on your website, and where it came from.
You can create a custom URL for your SMS marketing campaign and track the efficiency of your campaign in direct relation to how much traffic the URL has received. If the URL leads to an offer, discount code, or product, you can use the analytics and sales data to determine the return on investment in comparison to the cost of your SMS campaign.
- A URL Shortening Tool
URL shortening tools can be found online for free and are incredibly useful when you need a short URL to add to an SMS marketing campaign. With SMS you are often constrained to a certain number of characters set by a service provider when creating and sending a text message. By shortening a URL to add to your SMS marketing campaign you are saving space and providing a link which can be tracked when measuring your ROI using your analytics package.
Text Marketing ROI Metrics to Consider
There are several metrics to consider when calculating text marketing ROI of any SMS marketing campaign.
Open Rates: How many people have actually opened the SMS that you have sent as part of your marketing campaign. This is a generally high number in SMS marketing, so if you are receiving low open rates, you're doing something wrong.
Response Rates: This is a relatively easy metric to measure as SMS responses are often sent back to the source. If you are receiving low response rates to your SMS marketing campaign you may want to take a look at your call to action and change it accordingly.
Offers Used: If you have delivered a specific discount code or link to a specific offer page of a website then you can easily measure your text marketing ROI by tracking this. How many people have made use of the offer? How many people have visited the web page that you have linked to? How do these numbers correlate? Use all this information to improve your future efforts when it comes to SMS marketing.
Call or Click Tracking: Although most SMS marketing campaigns won't ask customers to call a number, you can track the amount of calls received if you have decided to go down this road.
You can also use your website analytics to track the click though rates once people have gone from the text message through to your landing page, in order to monitor the efficiency of your conversion rate optimization strategy.