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SMS Marketing Conversion Rates: How to Measure ROI
Table of Contents
Digital marketers, we know you’re always hearing about the latest way to connect with your audience. Maybe it’s a more effective social media targeting strategy. Maybe it’s an expensive new email marketing suite. Each new tool comes with one central question — is it really worth it?
SMS is the newest tool in the mobile marketing toolkit. For years, text messages were a purely personal communication channel. As brands dipped their toe into SMS marketing, they noticed that it’s a great way to get a consumer’s attention. Plus it helps meet the ever-growing need for ecommerce personalization, two-way conversations, and communication that feels human, not robotic.
Now brands are hooked. Nearly half (44%) use SMS marketing software to manage and execute campaigns. Meanwhile, 61% of marketers increased SMS marketing budgets in 2020.
The pandemic took SMS marketing into overdrive. In March, SMS marketing grew 8.5% compared to February. By April it had grown by 20%. Marketers turned to text messaging as real-time communication became increasingly important for confirming pick-ups, deliveries, and sharing up-to-the-minute information and deals.
By Black Friday/Cyber Monday, SMS was even more popular. Message send volume was around 3x higher than comparable days earlier in November and mobile traffic accounted for 47% of sales on Thanksgiving and only gained popularity in the days afterwards.
Still, it’s understandable if you’re wary about launching a text message marketing program. You probably have some basic questions about return on investment:
- What are average SMS conversion rates?
- How do I measure the success of my SMS marketing strategy?
- What types of messages work best?
We wanted answers too. We analyzed data from hundreds of Shopify stores using our SMS marketing platform. We also aggregated the most recent SMS marketing statistics from a variety of sources to offer a robust picture of the market.
Here’s what we found:
General SMS Marketing Stats
SMS Marketing is Taking Off…
...But Has Plenty of Room to Grow
SMS Open Rates Stats
Marketing only works if the consumer opens your message. Thankfully, text messaging is the best marketing tool to reach people quickly and easily.
What are Average SMS Open Rates?
That little notification for an unread text must really bother people. SMS open rates are nearly 100% and nearly three quarters of users leave zero text messages unread. That’s quite a difference from out-of-control email inboxes where people leave unread messages for literally years. In fact, 21% open rates are considered good in email marketing.
With open rates so high, it’s a safe assumption that if someone received your text, they read it too unless there was a delivery issue. Text messages are read almost instantaneously. In fact, most are read within 5 seconds and 90% are read within three minutes.
But be careful, open rates are often discounted as a measure of SMS marketing success. It’s nice that basically all recipients open your message but clickthrough rates, reply rates, and conversions are far more important.
SMS Reply Rates Stats
Not only do consumers open and read SMS messages frequently; they’re far more likely to respond. In fact, more than 50% of consumers respond to texts in under three minutes, and 78% respond in 10 minutes or less.
Those metrics simply demolish social and email. Consumers are 4.5x as likely to respond to texts vs. emails. Meanwhile, SMS messages have a 209% higher response rate than phone, email, or Facebook. Perhaps it's the speed and informality of texting that makes consumers more comfortable. Perhaps it’s because they know a live human from the brand is on the other end ready for a two-way chat. That informal, quick communication method is crucial to any brand’s strategy and leads to happier consumers.
SMS Conversion Rate Stats
Consumers are more comfortable shopping on mobile than ever before. Mobile commerce more than doubled from 2015-2019 and is projected to reach $284 billion, or 45% of total U.S. ecommerce, by the end of 2020.
Retail sites that are perfectly optimized for mobile provide clear product details and specs. Payment info is often stored on the device, and is easy to input via PayPal, Apple Pay, Shopify Pay, and other methods.
Plus, younger consumers frequently discover products on social media. In fact, 51% of 18-36-year-olds and 44% of 13-17-year-olds have searched for a product they first saw on social. They’re well practiced at searching Google for their desired product and converting through mobile — and don’t go searching for a laptop when it’s time to buy.
Measuring SMS Marketing Effectiveness
SMS marketing is measured in four categories:
- Clickthrough Rates (CTR): The rate that consumers click on your SMS message and move to your website.
- Conversion Rate: The percent that subscribers make a purchase on something you promote via SMS.
- Earning Per Message (EPM): The amount of money earned divided by the number of messages sent.
- UNSUB Rate: The percent that subscribers unsubscribe to messages. The lower the better. Under 3% is solid.
Can Text Messages Increase Conversion Rates?
Text messages increase conversion rates across all industries. SMS messages see conversion rates as high as 9.1% with clickthrough rates as high as 30.3%, and they can earn as much as $8.11 per message, according to our Benchmark Report.
- Common conversion rates vary from 1.1% to 9.1% depending on the campaign.
- Clickthrough rates vary between 7.5%-30.3%.
- Earning per message varies $0.69 to $8.11.
With open rates near 100% and clickthrough rates 10-15% higher than email, it’s no wonder why SMS marketing helps increase conversions. On a practical level, it’s just easy to click on a text then follow quick prompts to purchase.
- AOV can also rise with SMS marketing. Postscript found that during the 2020 Cyber Week, average order value (AOV) was $83, with shoppers spending the most on Thanksgiving.
Want to see examples of effective SMS marketing messages from leading brands?
Want SMS marketing templates you can use and personalize? We’ve got you covered with our ready-to-use SMS templates for ecommerce brands.
Abandoned Cart campaigns are the most effective
Abandoned cart messages remind consumers of products they were oh-so-close to purchasing. They went to the trouble of adding the item to a shopping cart but didn’t pull the trigger. Maybe they had second thoughts. Maybe they wanted to do a bit more research first. When marketers use SMS to offer a gentle nudge toward a product they abandoned, it’s highly effective because the purchase intent is so strong.
Across all industries, abandoned cart promotions generate:
- 16.2% clickthrough rates
- 9.1% conversion rates
- $8.11 per message
An SMS keyword is a word or phrase that a consumer uses to interact with a business. For example, a beauty brand may ask followers to text the word GLOW to a certain number to receive an exclusive product offer. Or a clothing brand may ask consumers to text HALFOFF to receive a discount. It’s a smart way for brands to entice people to opt-in to text message communications.
Across all industries, keyword promotions generate:
- 30.3% clickthrough rates
- 7.7% conversion rates
- $5.79 per message
Calculate your projected monthly ROI with our handy calculator.
It factors in ecommerce data and delivers projected results after one year.
SMS Marketing Performance By Industry
We crunched the numbers from apparel brands using Postscript and found these key takeaways:
- Abandoned cart messages perform particularly powerfully — with a 9.7% conversion rate, and 15.7% clickthrough rate, and $9.19 earned per message. That strong performance is countered by just a 1.9% unsubscribe rate.
- Keyword messages offer the highest clickthrough rate at a whopping 28.8%, but have the highest unsubscribe rate at 3.1%. Still, they’re worthwhile due to their 6.9% conversion rate and $5.83 earned per message.
- Loyalty offers have one of the higher CTR’s (14.8%), meaning that the right message increases conversion rate (2.9%) and EPM ($1.44). Try A/B testing different creatives and offers to see what resonates with shoppers.
Whether you’re selling must-have kitchen hacks or the coziest blankets known to humankind, here is what works versus what doesn’t.
- Abandoned cart messages perform best. They garner 9.6% conversion rates and 18.4% clickthrough rates, and earn $8.46 per message.
- Keyword messages have the highest clickthrough rate at 26.7%, with conversion rates of 7.3% and $6.70 per message earnings.
- Welcome series messages have a CTR of 11.6% and earn $3.04 per message, so they’re worthwhile too.
Beauty is growing exponentially, as hot direct-to-consumer upstarts team up with YouTube stars, Instagram influencers, and celebrities to grow brands with stunning speed. To keep up, try these SMS marketing tactics:
- Abandoned cart messages bring a remarkable 8.2% conversion rate and $6.29 earning per message. A/B test your messaging to make sure you’re sending the most irresistible messages to your consumer base.
- Keyword messages earn an incredible 30.9% clickthrough rate. When 7.3% of consumers convert, it’s a no-brainer. Incorporate a keyword across different channels like Instagram, product packaging, and email marketing.
- Loyalty offers let everyone be part of the club. With 11.6% clickthrough rates, they’re worth sending with a carefully curated campaign.
Food & Beverage
Coffee, snacks, meal-prep — people are buying everything direct-to-consumer these days. Here are the most popular tactics for the industry.
- Abandoned cart messages bring 8.5% conversion rates, 15.5% clickthrough rates and earn $5.92 per message.
- Keyword messages are also a solid choice given their 25.8% CTR in the industry and 7.2% conversion rates.
- Loyalty offers are great for consumables because people are likely to become repeat buyers. With 12.1% clickthrough rates, loyalty programs incentivize customers to keep purchasing.
Health & Wellness
Even before the global pandemic increased home exercise and self-care routines, the health-and-wellness business was booming — especially for those using SMS marketing.
- Abandoned cart messages are a strong performer in this category as well, yielding 9.5% conversion rates, 17% clickthrough rates and earning $5.53 per message.
- Keyword messages get a whopping 37.3% clickthrough rate, 10.6% conversion rate, and earn $5.97 per message.
- Loyalty offers are also worthwhile with 13.9% clickthrough rates. If you’re just getting started with SMS, try a loyalty offer before spending time on a multi-touch welcome series. Loyalty offers have the lowest unsub rate, high CTR, and are about the same in terms of conversion rate and EPM when stacked against a welcome series.
How Leading Marketers Run High-Converting Campaigns
Finding the right SMS marketing partner isn’t just about TCPA compliance and a central place to keep track of your campaigns. It’s about maximizing ROI. Postscript makes it easy to automate common message types like welcome series, abandoned carts, shipping notifications, and cross-sells. In combination with hyper-targeted customer segments using Shopify store data, businesses increase conversion rates, win back customers who may be shopping with competitors, and solve cart abandonment.
It all leads to higher ROI on your SMS marketing efforts.
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Author: Jared Shelly
Jared Shelly is the founder of Shelly Digital, a content marketing agency. He’s written for Philadelphia magazine, the Philadelphia Inquirer, and many other publications. His client content has appeared in Forbes, Quartz, and Inc.