SMS marketing is perceived to have a high return on investment as it is economical, simple to implement, and is a direct communication medium. However, to determine its success, you must have some quantifiable measuring means or metrics.
Therefore, just like any other marketing strategy, you must have in place proper metrics to gauge and evaluate the effectiveness of your SMS campaign. This may help you get buy-in for future SMS campaigns and give you valuable insights to improve the existing campaigns. This article offers a list of six pertinent SMS metrics that you can use to measure the success of your SMS campaign.
1. Customer response rate
One of the most important factors you must consider to measure the success of the SMS campaign is the response rate. The higher the response rate or customer opt-in rate, the more conversions and sales will be.
This particular metric will show how many people acted after receiving the SMS from your business, for instance subscribing to your SMS marketing list. To measure the response rate, you can calculate the percentage of individuals who opted-in to a text message, went to your website landing page to check out your products, made a query to customer support and asked for more information, or made a purchase. This will tell you how many people read your messages and are interested in learning more about your products or offers.
2. Growth in the subscriber list
One of the primary determinants of the effectiveness of SMS text marketing is the growth in your subscriber list in a particular period. It is a strong indicator of how successful your customer acquisition and customer retention efforts via SMS marketing are. The more the number of subscribers, the higher the rate of brand loyalty, leading to higher revenues.
This metric will not only help in assessing the success of your current SMS campaign but will also help you assess the impact of your overall SMS marketing strategy, including sign-up incentives, promotions, discounts, etc.
3. Customer conversion rate
The third metric you can consider to measure the SMS campaign success is the conversion rate, i.e., the rate at which the customers complete the action provided in the SMS, including clicking through the link, redeeming a coupon offered in the SMS, or signing up for a particular service.
A higher conversion rate will naturally indicate that the SMS campaign has been effective. To calculate the conversion rate, you can calculate the percentage of the total conversion from the total number of sent messages.
4. Customer opt-out /attrition rate
In terms of SMS marketing, the customer attrition rate represents the number of subscribers opting out or unsubscribing during a certain time period, i.e., a week or a month. While it is quite normal to lose a few subscribers now and then, if the rate is high and the people opting out belong to your target market, it indicates a problem.
To calculate the attrition rate, you can determine the percentage of opt-outs during a percentage from the total number of subscribers at the beginning of that period. If the rate is high, consider how to modify your SMS campaign to retain your subscribers, for instance, changing the timing or frequency of messaging or the message itself.
5. Cost of acquisition per subscriber
Calculating the acquisition cost per subscriber can help you gauge the effectiveness of SMS marketing compared to other mediums. It may prompt the marketing team to prioritize it if it proves to be more cost-effective and may help you secure more funds for future SMS campaigns. To calculate the acquisition cost per subscriber, simply divide the cost of each SMS delivered by the conversion rate.
6. SMS campaign return on investment
Last but certainly not least, you must calculate the campaign return on investment to assess how successful the SMS campaign is. The return on investment is a reliable indicator that businesses rely on to assess and compare various marketing tactics and tools to define future strategies and marketing budget allocation. The return on investment can be determined by dividing the money gained via new subscribers and the money spent by the initial investment in the SMS campaign. If the value is positive, it means your campaign was a success. However, the higher the ROI, the higher the campaign’s success rate.
Final Thoughts
Employing metrics to determine the success of the SMS campaign not only helps you evaluate its success and identify key improvement areas but also helps create buy-in for this marketing medium, particularly if the management is apprehensive about investing in SMS marketing.
It is recommended to track your SMS metrics weekly or at least once in two weeks, particularly when a new campaign is launched. This will help you identify problem areas and enable timely action for rectification and improvement to derive better results from the SMS campaign.