As technology continues to grow and evolve, brands face an increasingly long list of potential marketing channels to help them connect with their customers. However, not all consumer touchpoints are created equally. More and more brands are turning their focus to SMS marketing, cultivating deeper customer relationships through text messages and messaging apps. This omnichannel approach can even be more effective than email marketing, social media, and paid advertising when done right. What is SMS marketing, and how does it work?

What is SMS marketing?

SMS (short message service) marketing is the process of sending text messages to a brand’s contacts to keep them up-to-date on new products and services, exclusive sales and offers, and special events. Brands might also use SMS marketing to send quizzes and surveys to capture more information about their customers’ interests and needs. Additionally, they can leverage MMS (multimedia message service) marketing to include static images, animated GIFs, and more characters. Similar to most email marketing efforts, SMS marketing requires customers to opt-in beforehand. Users typically submit their phone number on a registration form or send a specific keyword to a shortcode, then confirm their subscription, to start receiving a brand’s text messages.

Brands can also use SMS marketing to drive customer engagement and sales through shopper promotions. For example, in Good Humor’s Ice Cream SMS program, consumers purchased $20 worth of qualifying Good Humor products to receive a $5 digital reward and a sweepstakes entry for the chance to win free ice cream. Participants texted a photo of their receipt and a city-specific promotional keyword (e.g. ‘GOODHUMORLOVESNYC’) to the shortcode 47056 in order to earn rewards.

SMS marketing vs. SMS customer service

SMS marketing is often used as a catch-all term to describe any text messages sent by a brand. However, some types of messages are more support-oriented than marketing-oriented. For example, customers might receive messages confirming the details of their online order or reminding them about their upcoming reservation. Brands may even offer text-to-order services, where shoppers make purchases via text message instead of on a website or an app. Brands should strongly consider going beyond chatbots and automated texts to provide consumers more personalized experiences and additional value through targeted messaging.

SMS marketing vs. email marketing

In both SMS and email marketing, brands encourage customers to subscribe so they can send content and offers directly to their inbox or messaging app. Marketers then track open and click rates to continuously measure their performance and refine their strategies. The main difference is the amount of user interaction: people typically check their inbox a few times a day at most, while over 65% of Americans check their phones every 9 minutes, or about 96 times per day. This leaves a significant impact on open and click rates - SMS open rates can be as high as 98%, compared to just 22% for emails. While marketers shouldn’t sacrifice email marketing for SMS marketing, they need to look at how text messages can support their strategies for driving sales, engagement, and ROI.

Benefits of SMS marketing

Reduces costs and boosts ROI

SMS marketing services are typically offered through a credits system, rather than a set rate. This helps brands keep their costs low, as they only need to pay for additional credits once they’ve run out. Whether marketers want to maintain a consistent messaging schedule or send short bursts for specific promotions, they won’t need to spend more than what’s necessary. SMS marketing is also proven to result in impressive ROI due to its high engagement rates. According to Attentive, one of the biggest companies in the text marketing space, retailers make an average of $55 for every $1 spent.

Offers fast delivery and high engagement rates

In today’s world of high-speed internet, smart devices, and automation, customers are constantly seeking instant gratification, or the desire to have their needs fulfilled immediately without delay. Brands use SMS marketing to satisfy that desire by sending messages to their phones, which is typically more direct than asking their customers to visit their website, check their inbox, or follow them on social media. Not only are the majority of consumers opening their messages, as mentioned previously, but they’re responding, too - as much as 45% of people have replied to a brand’s texts. Currently, about 64% of shoppers want brands to text them more often, proving widespread consumer interest in SMS marketing.

Drives omnichannel efforts and personalization strategies

Consumers also want seamless omnichannel experiences, whether they’re browsing a website, an app, or a store aisle. SMS marketing helps brands create interconnected buyer’s journeys through data-driven personalization and customized calls-to-action. Instead of navigating a cluttered inbox or an endless social feed, customers receive one-to-one messages tailored to their individual paths to purchase. For example, subscribers who abandoned their shopping cart may receive a unique discount code to drive initial purchases. Shoppers who recently made their first purchase might receive a message about a sale for a complementary product. Lastly, consumers who regularly engage with a brand’s texts might get an early access invitation to join their new loyalty program. Targeted messaging cultivates long-term engagement, better customer engagement, and stronger brand loyalty.

Captures first-party data and user insights

Like many other marketing strategies, SMS marketing is a great way to continuously capture consumer data, then turn that data into actionable insights. In addition to getting the basics like their name, phone number, and location (from their area code), brands can apply progressive profiling practices to gradually collect more data about their text subscribers over time and offer something of value in return. For example, they can ask consumers for their birthday in order to send a birthday greeting and a unique discount code. They can ask consumers to answer a poll to get more information about their interests and send personalized recommendations. They can also use existing first-party data to customize their messages further, such as sending satisfaction surveys to customers who have received their purchase or “thank you” messages to shoppers who left reviews on their website. Data helps marketers develop effective value exchange strategies for improving sales, ROI, and customer loyalty.

Challenges of SMS marketing

Risks brand oversaturation and reputation

With SMS marketing’s high open and response rates, brands may be tempted to focus all of their efforts on text messaging. However, marketers need to be careful about what they’re sending and how often they’re sending it. In today’s privacy-driven marketing world, customers are cautious about fraudulent communication, and may mistake a brand’s texts for spam. They might also unsubscribe from a brand’s texts due to the low quality or high frequency of their messages. Marketers should look at best practices for send times and frequencies to avoid negatively affecting their subscriber list and brand reputation.

Risks content imbalance and miscommunication

As text messages are significantly shorter than emails, website copy, and social captions, brands need to be as succinct as possible. However, marketers also need to strike the right balance between being clear and being concise. They shouldn’t maximize their character limit with every message, but they also shouldn’t use excessive abbreviations or slang, either. Otherwise, they risk frustrating and confusing their customers. For example, brands can ask consumers to reply with “Y” or “N” to answer questions, but should avoid using shortened terms like “CON.”, which can mean either “CONFIRM” or “CONTINUE”.

SMS marketing best practices

Include identifiers and opt-out instructions

To minimize confusion and reduce friction, brands should open with an opt-in and include their name and opt-out instructions in every message, as customers may not have them saved in their contacts. This helps them maintain a quality list of active and engaged SMS subscribers with an ongoing interest in their marketing communications. Brands should also consider offering opt-down options as well, such as allowing customers to receive less messages or to only receive messages about certain products, content, or offers.

Determine best send times and frequencies

Brands need to prioritize quality over quantity when developing their SMS marketing campaigns. For example, instead of sending multiple messages about the same promotion, they should consider sending one announcement and one or two reminders at most. They also need to take people’s time zones and schedules into consideration to avoid waking up their customers with brand messages in the early morning or the middle of the night. General best practices suggest sending messages either in the mid-morning or mid-afternoon so brands aren’t interrupting people’s pre-work morning routines or post-work personal time.

Create value and incorporate personalization

Every text message should provide customers something of value, whether it’s information about an upcoming sale, a limited-time offer for a specific product, or a delivery confirmation for their online purchase. If brands don’t include some sort of value exchange in every message, they risk annoying their customers with unwanted texts. They should also look for ways to incorporate personalization, such as using their contacts’ names to make their texts sound more casual and conversational than sales-focused. Marketers can also send messages based on specific dates and occasions, such as a “happy birthday” text or a reminder to book their next appointment.

Collect and leverage user first-party data

Brands can take their personalization strategies one step further by capturing and leveraging their customers’ zero-party and first-party data. Data and user insights helps them segment their consumers by shared interests and values, then send targeted messages that boost engagement, ROI, and customer loyalty. For example, marketers can ask customers to answer a short series of questions via text message, such as what their favorite products are or what service features they’d like to see, then notify them when the product is on sale or when the feature becomes available. They can identify which products are commonly purchased together, then encourage consumers who have bought one of the items to buy the other by offering an exclusive discount. Lastly, they can curate user segments based on their levels of engagement, then nurture them onto the next stage of their path to purchase, such as sending loyalty program invitations to repeat customers in exchange for reward points or a free gift.

Foster customer engagement and ROI with data-driven SMS marketing strategies

SMS marketing is quick, cost-effective, and beneficial for both companies and consumers. As people spend more and more time on their smart devices, mobile marketing is key to standing out and staying ahead of the competition. Brands should invest time and resources into crafting a data-driven SMS strategy that offers value, personalization, and frictionless experiences that integrate seamlessly with their other marketing efforts.

With 3 tier logic’s PLATFORM³, connected to all carriers in the United States, brands can communicate with their customers through loyalty programs, contests, and gift with purchase promotions. Modules like Dynamic Messaging, SMS Shortcode Phone Number, and Data Capture & Analytics provide marketers with the tools and information they need to develop effective SMS marketing campaigns and accelerate their business’s growth. To learn more, book a demo with our team today.

How SMS Marketing Boosts Consumer Engagement and ROI