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What is SMS marketing and what are its benefits?
SMS marketing has huge potential to drive brand engagement and ultimately revenue. Despite this many eCommerce players either don’t understand what SMS can do for them, or are failing to get the most out of their text-based strategies. Here we break down exactly what SMS marketing is, and how it can benefit a business.
We are all familiar with the concept of SMS. It’s an acronym that stands for Short Message Service and the first one was sent almost 28 years ago (it said “Merry Christmas” in case you were wondering). We now send 270,000 of them each second - that’s roughly 1.8 million since you started reading this article.
We also all know what marketing is, or at least we should do - it’s as old as language itself and we encounter between 6,000 to 10,000 examples of it every day.
SMS marketing (also known as text marketing), however, is comparatively less firmly entrenched in our collective consciousness. The vast majority of SMS messages we send and receive are social in nature - everyday conversations with our friends and family rather than businesses. The marketing ads we consume are predominantly delivered via the websites we visit and the social feeds we scroll down, not through a direct messaging channel.
What is SMS marketing?
SMS marketing isn’t some new fangled corporate buzzword. It’s pretty much what it says on the tin - a method by which brands can speak to their customers using text messages delivered to a mobile phone.
In practice it can take many forms. A basic SMS marketing strategy might involve a business offering promotional deals or new product information via text in order to drive traffic to their website.
Some vendors might take this a step further, and use SMS as a channel to develop and nurture community loyalty around their brand with the aim of converting long term. They do this by offering their customers genuine value for free via SMS, and by giving their audience a direct one-to-one interaction with the brand.
In its most advanced form SMS marketing ventures beyond traditional ‘marketing’ entirely and into the realm of conversion, payment, delivery and reorder cycles - all delivered through the same text-based channel. This is something most brands are a some way off being able to offer, but with 5 billion people currently using text messages on a regular basis, the opportunity to drive revenue and retention in this manner is undoubtedly huge.
What are the benefits of SMS marketing
SMS marketing holds several advantages which existing one-to-many digital marketing channels, such as online ads, email and even branded social media accounts cannot offer:
Convenience - Mobile phones are almost completely ubiquitous. Pretty much everyone owns one and they keep it with them all the time - 33% of young people even take theirs to bed with them at night. On average we check the devices in our pockets 96 times a day, or once every 10 minutes. That ubiquity of phone ownership makes SMS the most convenient way for brands to speak to their customer, or vice versa.
Speed - With convenience comes speed. A device that’s checked every 10 minutes is more likely to be used to rapidly read and reply to any incoming communications. The average response time to an SMS is 90 seconds, whilst 95% of them get opened by the recipient. When compared to emails which are opened at a rate of 20.9% and replied to after 2.5 days on average, SMS is a lightning fast way of reaching and receiving feedback from your buyers.
Cost effective - The barriers to entry for brands to leverage SMS are low. The technology has been around for a long time and the platforms used to deliver and manage your messaging are relatively inexpensive compared to running Google or Facebook ads, for example. In the US it costs brands a fraction of a cent to send one message. European rates are slightly higher - up to 5 cents per message - although prices get cheaper the more messages you send.
Permission based - To receive SMS messages from a business, customers must specifically opt-in to the service. Being sent direct messages to your phone is a more personal interaction than other opt-in marketing tactics like bulk email newslettering. Customers are, therefore, likely to be more discerning when choosing which brands to engage with brands via SMS. This means your text marketing list is likely to be highly concentrated, containing the customers who are most actively engaged with your brand and its values. SMS provides you with a powerful opportunity to engage with this important core group.
Conversational - SMS allows you to give your customers what they crave - one-to-one interaction with the brand they are buying from. Buying is no longer a one way transaction - 83% of users now contact businesses to find out more about their products or services before purchasing. People want to be treated as individuals, and SMS, whether through chatbots, a customer service team or a mixture of both, is a hugely effective means of delivering that experience. And consumers are already on board - 79% of them are willing to use messaging apps to get customer service. It’s up to brands to meet buyers on their terms.
Commercial - SMS marketing is about promoting your brand, nurturing an audience and providing adequate customer support. But you’re not doing it to be everybody’s best friend - ultimately you want to convert. The best SMS strategies do this within the text based channel itself, rather than adding friction by driving buyers to a cumbersome website requiring account log ins and card details before every purchase. Used in this way, SMS goes from being a marketing tactic to a direct revenue generator.
Retention - Every eCommerce vendor grapples with reducing churn, and with good reason. On average 43% of profits generated by eCom stores come from retained customers, with the best vendors winning 80% of their business via repeat purchases. With that in mind, SMS can be a crucial pillar of your retention strategy. Post purchase reorder prompts and follow up nurturing comms, which you know have a high chance of being read by a previous buyer who is interested enough to sign up to your SMS service, can be the difference between moving them onto second and third purchases or churning after one.
Trackable data - Only 42% of companies are able to track CLV accurately. Having your customer’s historical buying data linked to a specific mobile phone number allows you to know exactly who is buying what from you, how often, and for how much. SMS offers you as a vendor a deeper insight into your customers buying habits, and assigns a clear ROI to text-based marketing efforts.
SMS marketing has huge potential as a marketing and revenue generation strategy. It is based on a technology that is already heavily embedded in the lives of almost every one of us, and can offer the seamless, one-to-one experience that consumers are now demanding. Despite this, SMS adoption by most eCommerce brands is still in its infancy. Those that embrace it early are best placed to master its potential and reap the whole host of benefits SMS marketing offers.
Check out some great (and not so great) examples of how some early adopters have incorporated SMS into their marketing strategy here.
To find out what SMS can do for your brand, take a look at what we've been building: