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SMS Marketing: a Grossly Underrated Marketing Tactic

Text message or SMS marketing delivers insanely higher ROIs and ridiculously higher sales than any other digital or conventional media. No convinced? Take a moment to let these figures sink in:

An ROI of 500% and 680%…no kidding!

A cross-media study conducted in 2013 found the ROIs of TV, radio, online, newspapers, and magazine ads to be between 60% (for TV) and 130% (for magazines). You’ll be lucky to achieve an ROI of 200% on Google Adwords. Email Marketing can still yield excellent ROI so I wrote a post recently outlining some ways to take advantage of emails as a marketing medium.

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And a 73% conversion rate for SMS… I mean, come on! Everyone knows the AdWords conversion rate has remained around 2-5% since forever. So, why isn’t SMS marketing as popular as it should be, with these kinds of results? There are so many benefits to SMS marketing; you should be taking it seriously. Obviously, your website still has a huge part to play in converting, so there are many variables but this method of marketing should be taken very seriously.

Why SMS is an Ugly Duckling

Big brands don’t seem to like SMS as a marketing media. It’s probably because SMS marketing is still new (although SMS as a technology is relatively old as modern tech goes) and the marketing teams at big brands aren’t sure how to plan, measure or integrate it with other media that they’re more used to. The burgeoning social media and online marketing are still new to the brand managers and agencies, and maybe mobile is just a step too far. Otherwise, there’s no logical reason for professional marketers’ step-motherly attitude towards SMS marketing.

There are people who understand how effective mobile and SMS marketing is. In his Forbes column, Steve Olenski quotes James Citron, the CEO of a video text messaging company as follows.

“We live in a mobile-first society,” he says, “but many marketers have yet to embrace this reality.”

It all makes sense to me, especially since I read that SMS text messages have a read rate of 97% within 15 minutes. Yet, mainstream marketers have by-and-large failed to take advantage of SMS marketing. That leaves the field wide open for small and medium businesses. You can conveniently use SMS to reach your customers directly, immediately, and personally, on media that’s uncluttered, trackable, simple, and cost-effective. But how exactly can you use SMS for maximum impact?

How to Kick Start SMS Marketing

If you are a small or local business, SMS marketing can work like magic for you. But you have to put some work into it and do it the right way. These are the steps you should take:

  • Understand local laws and regulations for SMS marketing and ensure compliance.
  • Build a database to record, monitor, and control your SMS marketing subscriber lists. Customers are obviously the best place to start.
  • Plan your SMS campaign in detail and create the content (text, images, video, links, deals, etc.).
  • Start sending messages and monitor the results very carefully.

SMS Marketing and the Law

Most developed countries have legislation in place to regulate SMS and most other forms of direct marketing. The intention is to protect mobile users from being badgered or harassed by irresponsible businesses and individuals. In the UK, SMS marketing is covered under the marketing and advertising law. In the US, it falls under the CAN_SPAM act of 2003 and the Telephone Consumer Protection Act of 1991.

The relevant provision of the law prohibits businesses from sending marketing text messages to customers without acquiring their explicit permission. This means your recipient must have subscribed to receiving your marketing offers through text messages, and you must have a record of their subscription and permission.

The messages should also clearly state who you are, what you are selling, the offer, and the terms and conditions of the offer. Every SMS that you send must give your subscriber the option to opt out, for instance by sending a ‘STOP’ text to your short-code, a 5 or 6 digit identity number assigned to commercial SMS senders and mobile callers.

If you are going to do SMS marketing through one of the many text marketing agencies, you should ask them if they have the permission from the people they’ll be reaching with your messages. And if you are buying a list of phone numbers from a supplier, make sure that you can use it for marketing.

Beware, businesses and individuals that violate the law can face penalties. Manchester based Tetrus Telecom was fined £440,000 by the ICO (Information Commissioner’s Office, UK) for spamming millions of non-subscribers with text messages.

Setting Up a Database of Subscribers

Don’t worry; a database can be something as simple as an Excel sheet, with your subscribers’ mobile number, email address, and maybe their social media profiles. The emails and social media profiles are optional and will be used for OTT (over the top) messages or push notifications, which we’ll discuss in a little while.

The data in this database is the most important step in SMS marketing. Get it wrong and your conversion rates will be much lower than you would want. Working with a data agency to buy data may not give you the kind of loyal customers and control over your subscribers that you will get if you build your own opt-in lists. There’s no harm in doing both, but be aware of the complications if the recipients are not your own customers.

Collecting SMS Subscriptions

There are two ways to build a database of mobile subscribers, through your website and your conventional marketing channels. You can collect online subscriptions through a form on your website, which gets served to your mobile visitors. And if you are a local business, there’s no harm in informing your visitors about your SMS marketing program through a flyer or poster, requesting them to sign a consent form at the counter or to register through your website.

The longer route to this is to have a mobile app, which people can install, and you can use to push your text, image, and video messages to them. You could even use an app, but this would generally require more budget and development to build and manage.

Either way, you have to be clear and upfront about your SMS marketing program when you’re gathering subscriptions. Describe what the messaging is going to be about, e.g. your products and offers, and how many SMS per week your subscribers can expect to receive. Include links to your terms and conditions and privacy policy pages, and a statement about how to opt out of the program.

SMS Marketing tips

Plan Your SMS Campaign

Your plan should include the goals of your campaign, the content, the timings, and frequency of messages, and the people you are going to target. Most importantly, the plan should detail how you are going to tie in the SMS campaign with the rest of your marketing and business functions. SMS campaigns can fail to deliver results if you run them in isolation, without supporting media such as billboards, in-store posters, Twitter hash-tags, print flyers, online ad, or other media that you regularly use.

When drafting the content of your messages, remember that a standard SMS is 160 characters long. The messages should be clear and should offer something of value. Essentially, SMS is a form of ‘interruption marketing,’ so your recipients will only stay subscribed if your messages offer them something exclusive and valuable. It’s customary for businesses to offer discounts, coupons, and special deals via SMS marketing. In fact, discounts and deals are often the reason why people subscribe to your messages in the first place.

Finally, the message must contain a clear and concise call to action. If you’re going to handle your SMS marketing on your own, you’re going to need a short-code for your company. This short-code will be used to receive replies from your subscribers and track your campaigns. It will also be used to automate SMS marketing if you’re going to use a web-based service like Twilio, which I’ll discuss later.

Start Sending Messages

With your mobile subscription lists in order and your SMS content and sequence in hand, now would be the time to start sending SMS. Luckily, you don’t have to go out of your mind feeding all the numbers into your mobile phone, or bruise your thumbs pressing that send button a million times. There are plenty of tools and services available, which make it possible to send out millions of messages a week without breaking a sweat (or breaking the bank).

Firetext: Self-served and managed online SMS sending software; costs you 4p per SMS (up to 160 characters)

TextMarketer: Web-based bulk SMS platform; pay as you go; starting at 1.85p per SMS

TextLocal: Similar to Firetext, with prices starting at 2.4p per text

BulkSMS: Covers over 800 networks in more than 200 countries; process start at around 4.3p; requires a desktop software to be installed

Some of these services also allow you to receive replies to your messages online. You can use the short code of the service provider along with a keyword to receive the responses from your customers.

Web to SMS Apps

The above services work just fine for most businesses, but there are ways to send free SMS, even make free voice and video calls, to any mobile user anywhere in the world. Yes, free. But you’ll need a developer for that.

Twilio, a San Francisco based cloud communication company, allows software developers to make and receive phone calls and send and receive messages using its free web service APIs. It’s an all-in-one mobile marketing platform with some powerful APIs, using which developers can build mobile communication apps. Twilio integrates with major CRM software and offers granular level tracking features. However, it’s only suitable for you if you have an IT department or are going to hire Twilio developers.

A few low-end web-to-SMS tools are also available, such as the WordPress SMS plugin, which claims to embed SMS functionality into your WordPress website. You could try it and see if it works for your subscribers. For MailChimp users, you can try TXTImpact, which allows you to import mobile numbers from your MailChimp lists and send SMS right from your MailChimp account.

Rise of OTT Messaging

Modern day mobile marketing tools are diffusing the boundaries between SMS and OTT messaging, the type of messaging that does not involve a mobile carrier. Instead, the messages are sent using web services and APIs. Despite its effectiveness, SMS marketing is gradually being replaced by over-the-top (OTT) messaging.

Cloud-based services such as Zapier are merging popular communication apps such as Gmail, Dropbox, Slack, Evernote, Twitter, Mailchimp, and countless others with messaging apps such as Beepsend or Skype. Amazon Web Services (AWS) now offers Simple Notification Service (SNS), a comprehensive messaging app development platform for those who learned their math well at school.

In the very near future, marketers who ignore mobile and SMS could find themselves and their brands facing the consequences of ignoring reality. Yes, SMS or text message marketing may be a little geeky, it may be an unknown to us, it may not be the favorite marketing method among big brands, but it’s extremely effective.

10 replies on “SMS Marketing: a Grossly Underrated Marketing Tactic”

Thanks, for the comment, Isabel.

I have seen some good results for small companies too. It all depends on how well you organise your data and whether you can consider a proportion of your customers brand advocates. I have one particular client who is a very small business (sub £150k a year revenue) and generates a large percentage of their repeat orders through SMS marketing. If you do it right and have everything set up well, it can still work efficiently.

You’ve made some excellent points about SMS marketing, but I would add that rules differ from country to country and you can’t expect the same conversion in every country in which you are going to try this. It all depends on the type of people in a certain country and how confident they are with responding on a certain SMS.

I think the hard part is (legally) getting a list of numbers and sending them a sms. You need to be a confidential data operator to get someones phone number and use it, according to the law on a certain country.

One of the more beneficial posts I read lately on not so known subject, SMS marketing.
I learned few things from it and I do see the potential here..
Thank You Matt, it’s a great post.

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