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What Is SMS Marketing? An Insights-Oriented Guide

 

By Admiles Jul 22, 2024

 

SMS or Short Message Service marketing, is a marketing strategy involving the use of text messages as a medium for sending promotional messages, alerts, or updates directly to customers.

 

Due to the high open rates of SMS, the use of text for business marketing proves highly valuable with a conversion rate up to 30%, much higher than email marketing of 1.5%.

 

 

 

Understanding SMS Marketing As A Beginner

 

In today's fast-paced digital world, businesses are constantly seeking innovative ways to reach their customers. While email marketing, social media campaigns, and search engine optimization remain crucial, one often overlooked yet highly effective channel is SMS marketing. SMS, or Short Message Service marketing leverages the power of text messages to engage with customers directly on their mobile devices.

 

SMS marketing is a powerful tool for businesses looking to build strong bonds with its customer base. By understanding SMS marketing, implementing strategic practices, adhering to regulations, and staying ahead of future trends, marketers can harness the full potential of SMS marketing to drive engagement, sales, and customer loyalty.

 

Whether you are a small business or a large corporation, integrating SMS into your marketing strategy can provide a significant competitive edge in today's fast-paced digital landscape.

 

Although it sometimes feels “traditional,” SMS marketing is a digital marketing strategy focusing on the consumer network of 7.5 billion mobile phone users worldwide.

 

How many people see notification pops of emails and say “Oh an email, let me quickly read that” compared to an SMS? 

 

Exactly!

 

Most SMS are read almost immediately, evident in the widely reported “95-98%” open-rate of text messages. This powerful insight into how people treat “texts” above all other communication channels highlights a business opportunity to engage a highly responsible network of consumers. 

 

Following some fundamentals of digital marketing strategies like “optimization”, the effectiveness of SMS marketing depends on a number of strategic implementations including the proper use or optimization of all marketing text to fit the 160 characters limits of text messages.

 

Doing so whilst adhering to industry's best practices puts one's SMS campaigns on a high ride to success.

 

How Does SMS Marketing Work?

 

SMS marketing is an “opt-in” system of marketing that works by using text communications methods to reach and engage consenting consumers.

 

Whilst many businesses still take part in “cold texting” to acquire new customers they can engage over the long term, the practice of sending marketing texts to non-consenting individuals can be illegal depending on your jurisdiction and that of the consumers.

 

In addition to this, most consumers find all marketing efforts including text, email and calls from companies they have no prior communications with or they have consented to, to be annoying and most likely a scam.

 

As such, most highly converting SMS marketing campaigns stem from a list of “consenting contacts” acquired via omnichannel marketing practices. Here's a brief overview of how SMS marketing works:

 

1. Building a Subscriber List

 

● Businesses collect mobile phone numbers from customers through various sources like website opt-ins, in-store sign-ups, or online forms.

 

● As aforementioned, this is a crucial step to ensure compliance with local laws and avoid being viewed as a spammer and a scam by prospects.

 

2. Creating SMS Campaigns

 

● Businesses craft SMS campaigns using a marketing platform or software.

 

● Messages can include promotions, offers, updates, or reminders.

 

3. Sending SMS Messages

 

● Messages are sent to subscribers through marketing platforms that handle the distribution to large numbers of recipients simultaneously.

 

● Messages are typically limited to 160 characters (including spaces).

 

4. Tracking and Analysis

 

● Marketers track the performance of their campaigns by analyzing metrics like open rates, click-through rates, and conversion rates.

 

These 4 steps are the basics to which all SMS marketing practices are built. To scale up effectively and achieve higher ROI, businesses employ varying “market and insights-driven” strategies suitable for the targeted audience.

 

Benefits Of SMS Marketing

 

SMS marketing has a lot of benefits that cannot be summed up in a single sentence or paragraph, hence, we'll dive deeper to explore several areas of merits that comes with SMS marketing with real-world insights where applicable.

 

Here are the benefits of SMS marketing:

 

● Ubiquity Of Mobile Devices

 

When we look closely at the trend of marketing, there often is a correlation between the “size of the network” targeted and the “number of marketing campaigns” launched.

 

Marketers and businesses target the network with the most users all the time because more people means higher potential ROI on marketing practices.

 

With over 7.5 billion mobile phone users worldwide, the reach of SMS marketing is unparalleled. Virtually everyone carries a mobile phone, making SMS a direct line to customers.

 

● Immediate Reach

 

One of the most significant advantages of SMS marketing is its immediacy. Unlike emails that may sit unread in an inbox for days, sometimes months and other times forever, text messages are typically read within minutes of arrival. 

 

Given this insight, businesses use SMS marketing to promote time-sensitive information like flash sales, or urgent updates.

 

● High Open and Conversion Rates

 

As mentioned earlier, SMS messages have an exceptionally high open rate. This translates to higher conversion rates as well. When customers see your message almost immediately, they're more likely to act on it, whether that means redeeming a coupon, clicking a link, or making a purchase.

 

Evidently, companies like EU Natural have seen great conversion rates using SMS marketing as reported by Simpletexting when Amazon's top supplement brand registered a 563% ROI in 2019 on a black friday campaign.

 

“It’s a pretty high conversion rate from the text message over to our website. Pretty much everyone goes over to the website to claim their gift,” notes Vinay. “From there on we have a sales funnel where we engage with customers and get to know them even better.” 

 

● Personalization and Targeting

 

SMS marketing allows for a high degree of personalization. By segmenting your subscriber list based on demographics, purchase history, or behavior, you can send targeted messages that resonate with specific groups of customers. Personalized messages are more likely to engage recipients and drive action.

 

Ever received a message from a company calling you a VIP customer? Well, that right there is an example of a personalized and targeted message, tailored to you as a customer on the company's history of active buyers.

 

Prominent amongst retail companies, SMS marketing empowers these brands to maximally leverage their attentive and highly engaged customers. 

 

● Enhanced Customer Engagement

 

SMS marketing provides a direct line to your customers, enabling real-time interaction. This can enhance customer engagement by facilitating two-way communication. Customers can respond to messages, ask questions, or provide feedback, creating a more interactive and engaging experience.

 

A common element to “repeat purchase or patronage” is customer satisfaction. This element is most times attained through “consumer m-business” interactions. Companies can effectively scale up their consumer or user satisfaction rates via SMS marketing.

 

Airlines using SMS to send flight updates, check-in reminders, and gate change notifications to passengers serve as a great example of how SMS marketing plays a key role in consumer engagement and satisfaction. 

 

● Cost-Effectiveness

 

This may be hard to believe but SMS marketing is a cost-effective way to reach a large audience.

 

What most people do not understand about “cost” is that it is not merely a measure of doing or getting something, but the measure of that against the benefits of doing or getting the thing in mention. 

 

As such, judging by the conversion rates of SMS marketing, the association cost of running campaigns becomes a low price to pay.

 

Small businesses can run campaigns with $50 and earn over $1,000. Of a surety, the effectiveness of one's campaign isn't merely dependent on the channel but also the implemented strategies and the product or services being marketed. A one person conversion in some campaigns could mean $5,000 income while in others could be just $4.5, all notwithstanding, proving the effectiveness of SMS marketing. 

 

The Bottom Line

 

SMS marketing offers numerous benefits that make it an indispensable tool for modern businesses. With mobile device penetration at an all-time high, SMS provides a direct line to consumers. 

 

With lowered marketing cost and increased targeting solutions, SMS marketing, enabled by omnichannel marketing solutions like Sender, SMS marketing provides businesses of all scales with a platform to grow and maintain revenue flow. 

 

As technology evolves and customer expectations shift, staying ahead of trends and continuously optimizing your SMS marketing strategies will be key to maintaining a competitive edge. Whether you're a small business or a large enterprise, SMS marketing can

be a valuable addition to your marketing toolkit, delivering impressive ROI and helping you connect with your audience in meaningful ways.