95% of text messages are read and responded to within three minutes, making SMS one of the quickest and most reliable means for reaching customers. That powerful statistic says a lot about the potential benefits and mutual trust between sender and receiver capabilities through text messaging. Open rates are only a fraction of what determines an SMS campaign’s success. Comprehensively assess SMS performance by measuring your SMS campaign analytics, calculating the return on investment (ROI), and understanding the unique value trade-off for your brand.
Marketers who track the ROI of their campaigns are more than 1.6 times more likely to receive higher budgets for their marketing efforts. Keeping message analytics ready will give you the power to pivot when needed without sacrificing goals. SMS’s flexibility allows a campaign’s various components to be adjusted if ROIs are not being met.
In part two of this series on SMS analytics, learn how to determine your SMS campaign’s ROI and what trade-off values your brand might benefit from utilizing.
How To Determine The ROI Of SMS Campaigns
1. Opt-Out Rate
The opt-out rate of your message will show you how many subscribers have removed themselves from your list after a campaign. Calculate your opt-out rate by dividing the number of unsubscribers by the number of text messages sent during your campaign window. Multiply by 100, and you have the opt-out rate.
No matter how well-written or targeted your content is, every campaign is subject to opt-outs. It’s vital to keep an eye on the opt-out rates for each SMS campaign to determine what is working in your strategy. A higher opt-out rate could be due to an error in the content, sending messages too frequently, or not providing promotions and offers relevant to subscriber interests. The opt-out rate is also helpful for determining future SMS content and strategy.
2. Growth Rate
A healthy SMS list keeps growing. Monitoring the growth rate of your SMS efforts is a strong ROI that shows if a brand’s reach is expanding or falling.
Calculate the growth rate by deducting the number of previous subscribers from the current subscriber list. Then divide by the number of prior subscribers.
Monitoring the growth rate of subscribers is vital to determine if you are reaching the campaign’s target audience. A low growth rate is an area of concern, and future campaigns should focus on increasing the reach.
3. Click-Through Rate
Including a SmartURL™ link in the SMS message encourages subscribers to go beyond passively reading to engaging with your message. Links allow you to pack in more information than the character limit, promote deals on your site, encourage online bill payment, share digital statements and documents, etc. To determine if the link in your message was effective, you will need to find the click-through rate (CTR).
The CTR measures the percentage of subscribers who took a link clicking action from your SMS message. The higher the CTR, the higher the ROI. To find the CTR, take the number of clicks and divide it by the number of delivered messages. Multiply by 100, and you have the CTR percentage.
SBT’s SmartURL™ tool and dashboard is a powerful way to track the engagement of your SMS campaign. Create, customize and track shortened URLs directly in the SBT software. Read more about the advantages to using SmartURL™.
4. Conversion Rate
The conversion rate is the percentage of subscribers that take valuable action from the text messages. An SMS call to action could be making a purchase, paying a bill, replying to the message, visiting a website, etc. Calculate the conversion rate by dividing the number of subscribers who took action by the number of campaign recipients.
The conversion rate can give insight into what customers are looking for and help with future text message efforts. Each conversion is considered a gain, and a higher rate indicates the success of your message: tweak or phase-out campaigns with low conversion rates to build a more robust SMS strategy.
5. Cost Per (Redeeming) Subscriber
Knowing the cost per redeeming subscriber, how much your brand is spending per subscriber, for each text message can give powerful insight into your SMS campaign. Are you spending more on leads than your campaign is earning? Are you barely making more on your campaigns than cost per lead? Finding your price per redeeming subscriber will answer these questions and more. Once you know the cost, you can adjust your campaign accordingly or switch gears altogether.
To determine the cost per redeeming subscriber, divide the cost of each message sent by the conversion rate.
ROIs are essential in determining SMS content, strategy, and budgets. They are a tangible way to track progress and set goals. However, ROIs are not the only measurements to consider when deciding if an SMS campaign was worth the time, effort, and money.
SMS has the power to lower costs and save time, making the expense of sending text messages a value trade-off. Finding ways to cut costs with SMS will be unique to your business, but here are two areas you could begin implementing almost immediately.
1. Customer Service
Empowering a customer service or call center team with Two-Way Texting has countless benefits. Reduce overloaded phone lines and wait times by directing customers to initiate their requests via text message. Agents can assist multiple clients at once, and clients can go about their day without being held on hold for a prolonged period. Simple requests, like password resets and common questions, can even be automated. 83% of millennials prefer to reach out for assistance via SMS over a phone line, making text message vital for customer service teams.
Check out our best practices guide for customer service Two-Way Texting to learn more ways for empowering your team while saving time and money.
2. Traditional Marketing
Move traditional marketing outreach to SMS and cut high costs. Unlike traditional print media, SMS lets you track engagement, deliver on your schedule, confirm message delivery, and follow up in real-time. MMS allows you to send the same compelling graphics that would have been sent in print form, elevating the text message experience for your customers. Postage and print costs take up a sizable portion of marketing budgets with little way to track their returns.
The day isn’t over once you hit send on your SMS campaign. Putting in the time to track and monitor each text message’s performance will lead to stronger and more reliable SMS campaign analytics. The team at Solutions by Text can help you find your brand’s SMS ROIs and unique trade-off values.