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SMS Marketing – Is It Still Competitive and Worthy?

Marketing & SEO
Jacob Dillon 14 November, 2018
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If you have your own business in this day and age, you probably know that having a high-quality product or service you can offer to your potential customers is just as important as making sure that people know about it. In fact, it can be argued that marketing is even more important since nobody will buy anything from you if your business doesn’t register on their radar. Even if you run a brick-and-mortar business, being online and in front of your target audience is a must. Fortunately, there are plenty of marketing channels through which you can reach out to your customers, such as branding, PR, social media, email, as well as through different marketing practices like SEO, content marketing and SMS marketing. SMS marketing is often criticized for being too pushy, that`s why, in this post, we are going to analyze its pros and cons and see if it is worth trying.

SMS marketing main image

Let’s take email, for example. It is one of the oldest marketing practices, and despite the fact that every now and then someone will come out and declare it dead, it is still going incredibly strong. In fact, it sports the highest ROI rate of 440%, and it wipes the floor with all other online marketing channels in that aspect. For every dollar you invest in online marketing, you will see a $44 return.

Social media marketing is popular, as well, since everyone is on social media these days, especially the younger population. This makes matters a lot simpler for businesses and marketers because it’s easy to find out where your target audience hands out.

SMS Marketing Introduction

And then there is mobile marketing, which has absolutely skyrocketed, thanks to the emergence of smartphones. In fact, as much as 80% of internet users own a smartphone. Google has also been quick to support mobile as well since it has introduced mobile-first indexing, which forces businesses to adopt responsive design and focus on mobile users if they don’t want their search engine ranking to suffer. The best thing about mobile is that all of the channels mentioned above can easily be used via a smartphone.

All this mobile talk is pretty common, but what’s less talked about is SMS marketing, which has somehow taken a backseat when it comes to mobile marketing, even though has been around for almost 20 years. On top of that, as much as 5 billion people have a mobile phone connection. As popular as smartphones are, there are “only” about 2.5 billion smartphone users, and when you deduct the overlap between the two, there are still 2.5 billion mobile users which don’t have a smartphone. All of this means that SMS marketing should have a much wider reach than any other form of marketing, especially given our propensity to reach for our phones 150 times a day at the very least.

We have decided to dig deeper into the subject and see if SMS marketing is still a viable marketing strategy in 2018. Keep on reading.

Why SMS Marketing Is Still Relevant

Before we can begin to understand why SMS is still one of the most effective, and at the same time, one of the most underrated marketing channels, we need to take a look at its history, as well as some of the most relevant SMS marketing statistics. SMS has revolutionized the way we communicate since it was no longer required to actually call someone in order contact them. We could simply put together a short message, which was much cheaper and more effective.

The first mobile ad was created and shared in 2000, and it paved the way for companies to use this marketing channel which was cheap, reliable, and unlike most marketing channels and practices out there, totally unobtrusive. Things really took off in 2004, when the number of SMS messages became larger than the number of calls made.

We come across SMS marketing examples all the time, even if we don’t realize it. For example, you probably receive texts on a regular regarding discounts and offers from your favorite brands. And that’s just the tip of the iceberg because SMS is a crucial tool for service-based industries, such as transportation. For example, instead of calling a taxi, you would send a message, and you would get one back telling you when it will arrive. Also, every time you make a withdrawal from your bank account or if you receive payment, you will receive an SMS message.

With that in mind, let’s take a look at why SMS marketing is not only still relevant, but in many ways, superior to other marketing channels and practices.

1. SMS Has the Best Open Rate

sms marketing regulations and open rate

We aren’t talking about a small margin, either. SMS is superior to any other marketing channel when it comes to open rate. According to a report by Dynmark, the average open rate for text messages is a whopping 98%, which is one of the most impressive bits of SMS marketing statistics out there. It literally wipes the floor with email, whose average open rate is only 24.70%. But, that’s not the end of it, because around 90% of all text messages get read within 3 minutes after they have been received. And when you think about it, when was the last time you have received a message and then read it a few hours later? Probably never, because you will usually read it immediately.

And we’re not even going to go into an in-depth comparison between social media notifications and messages and SMS, because those usually reach between 2-3% of their intended audience. The truth is, an average user receives so many emails and social media messages and ads that they simply start ignoring them after a while. On the other hand, we are no strangers to receiving lots of messages on a daily basis and answering most of them. Let’s face it, if you have an unread SMS just waiting for you to open it, it’s going to bother you if you don’t.

According to Jonathan Adams, the head of marketing for EssayOnTime, the best thing about SMS is that your target audience members don’t have to open the message to read it. Every phone will show a snippet of the message, which in most cases provides more than enough information for the recipient. Simply put, your message will reach your audience, and they don’t even have to open it. By contrast, 47% of emails are opened based on their subject.

2. SMS Has a Better Reach

We have already pointed out that the number of mobile users is far greater than the number of users who own a smartphone. And it’s not just that. There are even more mobile users than there are people connected to the Internet. It’s pretty hard to beat the entire web when it comes to reaching, but SMS has managed to do it. Less than half of the world’s population, or 48%, have an active Internet connection, whereas 64% of people in the world own a mobile phone.

And it’s not just about reaching people where there isn’t an Internet connection to be had. For instance, senior citizens might not have accounts on social media, or they may not be using third-party messaging apps like Viber and WhatsApp. However, they are more likely to have a mobile phone, and that means you can reach out to them via SMS. Other marketing channels, such as social media and email, are dependent on an active internet connection, while SMS marketing isn’t. You can send a text message to anyone who has a mobile phone. Of course, you shouldn’t avoid using other channels apart from SMS just because it has the widest reach. It all depends on the niche you are in and your target audience, and you are going to need to do your own research for that.

3. There is Little Competition

sms marketing image

According to research done by the American Marketing Association in 2017, an average person is exposed to over 10,000 marketing messages each day, which is a staggering figure. But, even if we were to single out just one marketing channel, such as email, the competition is still fierce. For instance, your average office worker receives 121 emails per day. Also, 124.4 billion business and 111.1 billion consumer emails are sent and received in total every single day. Those numbers can easily discourage you, as there are just too many competitors fighting for the same customers as you are.

However, there are plenty of SMS marketing examples out there which demonstrate that SMS, provided that SMS marketing best practice is followed, is one the most underutilized marketing channels out there. When it comes to SMS, your target audience is already there, since everyone has a mobile phone, but you still have to do your research in order to figure out if your audience likes to receive information via SMS. Whatever the case, the numbers show that only 21% of companies and brands are using SMS to get in touch with their customers, which means there is a huge potential in SMS still waiting to be tapped into.

The easiest way to determine whether your customers would like to receive SMS notification from your business would be to conduct a survey and ask for their opinion. Don’t be surprised if they respond very positively to receiving SMS promotions and ads.

4. It Is Immediate

As we already know, 90% of SMS notifications are read within 3 minutes after they have been received. That is not the case with social media or email for example, where the vast majority of messages is either ignored or read at a later time. This poses a problem for businesses, especially those which are trying to benefit from offering good deals or limited-time offers for their customers.

For instance, companies which base all of their marketing around online channels and methods have to spend weeks or even months preparing for holidays such as Christmas, Black Friday, or Cyber Monday, and to send multiple messages in order to keep their customers in the loop. That is a pretty common process, but it can turn out to be completely useless if all those messages haven’t been read on time.

Effective SMS marketing examples which illustrate the advantage of SMS notifications are restaurants or retail stores. Restaurants can send an SMS the same day or even early in the evening to its customers which are still deciding where to have dinner. Also, retail stores can notify their customers about last-minute deals, or even let them know that there are only a few products left in stock. Provided that you have followed all the latest SMS marketing regulations and updates, SMS can be very effective.

5. SMS Is Highly Personalized

sms marketing best practice

Nowadays, customers are not just looking for high-quality products at a good price, but they are also looking for a brand that is going to speak to them on a more personal level and which is going to provide a custom experience for them. Even mobile and SMS marketing statistics reveal the same trend. Customers spend 39% more money with a particular brand if they have received a personalized mobile coupon from it. But, stats are just showing us what we already know: people like to feel as if you are reaching out to them personally. They like to feel as if they are not just another customer on your list.

The biggest problem with SMS was the fact that it looked pretty generic since it was mostly text, which meant that there wasn’t any room for any real personalization. Other marketing channels were much better in that aspect. But, with Rich SMS, which allows you to send any kind of content to your customers, that problem has been eliminated.

For example, you could send an SMS to your customers in which they can swipe left or right on your selection of products. Based on their decisions, you can send them personalized messages in the future which would only include product categories they are interested in. An even better example would be to send a custom SMS which shows all the products that particular customer has already sent to their shopping cart, but which they haven’t purchased yet. Or you can simply remind them about the items they’ve spent the most time browsing while on your website.

Given the immediate nature of SMS, you may be able to gather information about your customers much faster, and then use it to categorize them based on their choices.

6. SMS Has a Huge ROI

sms marketing statistics and ROI

When it comes to online marketing channels and their ROI, email is still the king. But, SMS can produce even better results, if you try to honor almost every SMS marketing best practice and time your messages perfectly. Let’s take a look at an example of SMS marketing which had resulted in a huge ROI for the company that has used it.

You are probably familiar with Silverstone, which is one of the most prestigious Formula One circuits out there. Its bosses have sent an SMS to each of the 45,000 customers that were in their database, and which have shown interest about the event in any way. They have done so right after BBC’s broadcast of the race in Monaco, so the timing was perfect. The message contained an invitation for customers to order a ticket for the Silverstone Grand Prix. The result?

Silverstone saw a return on their investment into 45,000 messages of 680%! It was just a simple and well-timed message which led to a mobile-friendly page that allowed users to order the tickets in just a couple of clicks. You can use the same winning combo for your own business, provided that your message is relevant to your users and that it falls in line with your existing marketing strategy.

7. SMS Messages Are Extremely Easy to Share

Spreading the word about something that we like or dislike is fairly easy nowadays. It doesn’t take much time for you to go online, open your email or social media platform of choice, and share valuable information with your friends and family. And we aren’t talking just about cat videos, although those can be pretty funny, but also about various products, deals, and offers. This, in essence, is word of mouth marketing, which can be pretty effective, since you are sending to or receiving messages from someone you know and who has your best interest in mind. It is not just some faceless corporation trying to take your money.

However, while email and especially social media are fast for spreading messages, they aren’t even in the same leagues as SMS. With SMS, you don’t have to log in to a platform or even open an app or a website. You simply forward it with a tap to someone in your contacts, and that’s pretty much it. It can’t get much easier than that, and unless they decide to completely change SMS marketing regulations, SMS will remain the fastest.

Another aspect of SMS which most customers appreciate is its privacy, which is covered by a whole slew or strict SMS marketing regulations. On social media, every single one of your friends and followers can see what you are sharing with others, which can sometimes discourage people from sharing posts about some products. Plus, it is very unlikely that something like that recent Facebook scandal is going to happen with SMS. You are free to share everything, without having to sacrifice any of your privacy.

8. SMS Effectiveness Can Be Tracked and Analyzed with Ease

Every effective marketing campaign needs to rely on analytics data in order to see which of the methods and actions are working, and which ones need to be eliminated. Without measuring those results and using them to tweak and improve your campaigns, your marketing strategy is nothing more than blind luck, since you don’t know why it’s working like a charm or taking a nosedive. It is exactly the same when it comes to SMS marketing.

SMS marketing best practice would be to monitor and analyze if your SMS campaigns are producing any measurable, and hopefully positive results. All the analytics data that you would track when running a campaign using other popular marketing channels are available here as well.

Which metrics should you pay attention to when it comes to SMS? First of all, there are redemption and click-through rates, which enable you to measure how many users have taken notice of your marketing message and purchased a product because of it. Also, you will need to keep an eye on your opt-out rate. Even though SMS is much less intrusive than other forms of marketing, not everyone likes to be contacted that way, so some users may opt out. If the opt-out rate is significant, your SMS campaign might be doing more harm than good.

There is also the response rate, in case you are sending messages which require your customers to respond. Judging by the speed at which they are responding, you can get a pretty good idea if they have liked your approach or not. And finally, there is your ROI, which should be your most important number, because you are trying to run a business. ROI is fairly easy to calculate, and it will tell you if you need to invest more into your SMS marketing, or if you need to scale it down

Summary

As you can see, SMS marketing is not only relevant, but it’s also majorly effective if you know what you are doing. When it comes to reaching, mobile still beats the Internet, which means that SMS as a channel will remain safe for the time being. In fact, because all the other channels, such as email and social media are getting too crowded, marketers will be forced to seek out alternative ways of promoting their companies, and SMS will most likely become their new favorite tool in their toolbox.

So, by the looks of things, SMS is set to become even more popular, since it is criminally underused at the moment, and thanks to Rich SMS, it has finally overcome that last obstacle of being bland and generic.

Tags: content sharing digital marketing marketing marketing strategies marketing tools online marketing
Author: Jacob Dillon
Jacob Dillon is a professional writer and distinctive journalist from Sydney. Being passionate about what he does, Jacob likes to discuss stirring events as well as express his opinion about technological advancements and evolution of society. Find Jacob on Twitter and Facebook.
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