Key Performance Indicators of SMS Marketing

3 February, 2021
Reading time: 4 min 10 sec
Key performance indicators (KPI) of SMS marketing

The vast majority of companies do not analyze SMS marketing conversions – shows our report “SMS Communication in Poland”. Those who care about the campaigns’ effectiveness measure it using the CTR (Click-through rate) of the link in the message, average sales increase or the percentage of discount codes used. What factors should be considered to call a campaign successful? Read about KPI in SMS marketing.

Three major KPI in SMS marketing

Since we’ve switched from SMS or phone calls to instant messaging via WhatsApp or Messenger, we do not hear an incoming SMS signal so often. Nevertheless, a new text message notification still reminds us of something important and urgent.

As a result, the Open Rate of SMS messages is still high (up to 98%), and most people read text messages up to 5 minutes after receiving them. However, this is only half of the success, apart from the Open Rate, it is also worth getting to know other possibilities of assessing SMS marketing‘s effectiveness.

SMS KPI: delivery rate

A good and well-maintained customer database can serve for years, but many people can change the phone number or lose interest in the offer during this time. Thus, it’s worth comparing lists of sent and delivered messages. We recommended running such checks regularly to keep your database effective and to lower cost of conversion.

Key questions

  • Are there returning customers in my database?
  • Do I personalize messages by interests and/or preferences?
  • Are the buyers interested in purchasing my product again?
  • What would make them comeback?

Checking if the number is active is possible thanks to the HLR (Home Location Register) function, making it easier to exclude invalid contacts and check the registry of a number in the appropriate GSM network. Furthermore, it’s also worth knowing the recipients’ preferences. It’ll help to personalise the content of the SMS message.

The easiest way to get to know the preferences of your customers is by doing a short survey. You can also collect all data automatically during signup by using the Newsletter SMS widget. Both methods allow targeting future campaigns according to specific parameters, e.g., gender, age, shoe size, and tailoring content and offer to particular groups. Such SMS campaigns are simply more effective.

SMS KPI: opt-out rate

The Opt-Out rate is the number of people who unsubscribed divided by the number of all contacts. It allows you to easily define a group of recipients who are not interested in receiving your messages. Although it might seem not reasonable, it’s best to present them a way to unsubscribe from the newsletter.

A personalised Opt-Out link attached to an SMS allows the unsubscribe from the database and excludes future campaigns. Removing uninterested, unhappy people favours the effectiveness of the database, advertising budget, and brand image.

How to unsubscribe from SMS
Example of Opt-Out SMS

SMS KPI: conversion rate

Once the message has been delivered, you should start to monitor the response of the recipients. It is crucial to know how many messages were opened, but the in-depth knowledge can be given by the number of people who clicked the link inserted in the SMS. In other words – it’s worth checking CTR (Click-through Rate).

Our report from 2017 shows that about 40% of companies insert links in SMS messages, and the average CTR of the links is more than 17%. This means that the recipients read the messages and willingly take the next step on the customer journey.

Similarly to e-mail campaigns, the primary determinant of bulk SMS effectiveness is a conversion rate. This indicator shows how many recipients made the purchase and became customers after the campaign.

One way to estimate it is to track traffic intensity in e-commerce, e.g., in Google Analytics and compare it with the same time interval for previous days or with average traffic for that day of the week.

You can track the SMS campaign’s effectiveness by adding UTM parameters containing the medium type and campaign name in the link and then shortening it with a tool such as cut.li. These two actions help to measure the number of clicks but also shortens the message.

How to add UTM parameters to shortened links?

In the case of retail stores, the same can be achieved using a discount code or coupon in the message, which can be generated online and shown while purchasing. However, the code must be used only in the SMS campaign, so you will easily check its effectiveness.

Why KPI?

Key performance indicators or simply KPIs give a glance whether the direction chosen in the marketing strategy meets with a positive market reaction, whether the tools selected to achieve this goal are correct and the messages appropriate for customers.

Without the knowledge provided by the conversion rate, CTR or Opt-Out, the marketer would have to rely solely on intuition and could not seek or eliminate his actions’ weaknesses. That is why you should measure and test your campaigns.