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The recent Nielsen study says that as many as 46% of people who receive an SMS make a purchase afterward. According to our research, a direct response to a message sent to a naturally built database ranges from 15 to 40 percent. Consider relatively low implementation costs and you will get a direct marketing tool that has one of the highest return of investment rates. How to measure the exact effectiveness of SMS marketing?
“Half of the money spent on advertising is wasted, I don’t know which half though” – said Johna Wanamaker, the founder of one of the first department store chains. Are these words up-to-date in modern marketing reality? Surely not when it comes to SMS campaigns. A nowadays Wanamaker would have a variety of ways to measure the effectiveness of her actions.
Three ways of measuring the effectiveness
There are three main ways to verify the effectiveness of SMS campaigns that will help you compile the results from the campaigns. Each method is designed to help the measurement of different types of action. Therefore it is not only important to know them, but also to select the best-suited one.
1. When to use reports and reception analysis?
Delivery reports and reception analysis are great ways of measuring basic effectiveness in all two-way SMS campaigns (based on interaction with the recipient) and to measure the effectiveness in one-way SMS campaigns.
Reports after campaigns such as voting, surveys, questionnaires, contests, and lotteries are one of the basic effectiveness measuring instruments. What’s more, they’re exceptionally accurate and make it easy to count every penny.
In direct campaigns (e.g. vouchers or new product info) the reports may be the starting point to calculate the number of messages that were delivered to the recipients. The information included in the reports and obtained after the analysis of reception reports allows you to gather data about the campaign and the users. You will be able to determine:
- the actual number of recipients (based on the general number of delivered and undelivered messages);
- number of recipients who interacted with the sender (feedback);
- the most responsive target audience (based on age, gender, location, etc.) provided that respective categories were created beforehand.
2. When to use cash desk codes or online analysis?
In short: during campaigns that include sales of products or services in the retail store as their last stage. This way of measurement is used mainly in discount vouchers campaigns. It’s easy to use and provides accurate results.
The client is asked to present a voucher at the time of purchase. After counting used vouchers, all that needs to be done is to compare the results with the number of messages sent and to calculate the percentage of SMS recipients who were motivated to make a purchase by the ad.
What will you know after the cash desk code analysis?
This method allows you to precisely calculate not only the level of response to the campaign but also the average number of sales per one client.
If the vouchers weren’t sent directly by the brand but generated by the recipients themselves during the marketing campaign, the cash desk analysis also allows you to determine the ratio of a number of people who downloaded the voucher and those actually used it.
If this difference is significant, you should think why the users who downloaded the voucher did not come to the shop. Maybe the duration of the offer was too short or the call to action was not pointed out enough? In this case, the result of the campaign is also a way to eliminate future errors.
What will you know after online code analysis?
This method is as effective as cash deck code analysis. The only difference is the fact that it works online. It’s dedicated to online entrepreneurs. The customer uses a voucher after registering or making a purchase in a certain online store or website.
As in the previous method, after the campaign is finished, you have to summarise the number of new registrations made with the sent code, determine the number of online sales made by customers using the code and calculate the return on investment using the data.
3. When to use sales average analysis?
This method can be used in most types of campaigns, various other factors need to be considered though, e.g. introduction of the new product line, pre-Christmas period, season sale, other ATL and BTL campaigns.
What will you know after sales average analysis?
It allows you to determine how the campaign affected sales. However, the obtained data is not as explicit as in the previous two methods. Therefore it should be used as a support method. Effectiveness measurement is not used to calculate the effects of one campaign only.
The analysis of SMS campaign effectiveness is important for several reasons. It allows you to obtain precise results of the actions as soon as first delivery. The result monitoring process should not stop here. It is also the key to optimization and more precise targeting of audiences during future campaigns.
Mobile marketing effectiveness measurement based on reports, registrations, vouchers or page views boosts the effectiveness of further campaigns and allows the funds to be transferred where they generate the biggest ROI.
Andrzej Ogonowski (our Head partner of branding and PR) points out that nowadays entrepreneurs and marketing specialists who use SMS campaigns have bigger control over their budget and can spend the money more effectively. However, it requires a broader perspective:
There are more and more ways to precisely calculate the effectiveness of marketing actions performed. Still, the most important thing is to ask yourself – “How do I analyse the effectiveness of these methods?” and also “What purpose does a certain campaign serve?”
It’s not the important methods but the ability to look at the results from w wider perspective. Judging from my experience with the SMSAPI platform, I can say that the effectiveness measurements are performed to determine the most and least responsive target audiences. The results help future SMS marketing campaigns become more effective.Andrzej Ogonowski
Tracking traffic in Google Analytics
Another way of keeping track of campaign effectiveness is by using shortened links with UTM parameters. Read more about it or watch a quick how-to video guide!