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Key Performance Indicators in SMS Marketing

The vast majority of companies do not analyze conversions from SMS marketing – shows our last year report “SMS Communication in Poland”. Those who care about the effectiveness of the campaign, 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?

Since we’ve switched from SMS or phone calls to instant messaging via WhatsApp or Messenger, we do not hear the signal of an incoming SMS so often. Nevertheless, a text message on the phone still reminds us of something important and urgent. As a result, the Open Rate of the message 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 to get to know other possibilities of assessing the effectiveness of SMS marketing.

Delivered is just halfway to the success

A good customer database can be created for years, but during this time many people can change the phone number or lose interest in the offer. It is worth comparing the number of sent and delivered messages and checking the database on a regular basis. Checking if the number is active is possible thanks to the HLR (Home Location Register) function, which makes it easier to exclude invalid contacts and check the membership of the number to the appropriate GSM network. It is also worth knowing the recipients’ preferences in order to be able to personalize the shipping efficiently and at the same time not to burn the budget.

Key questions to be asked

  • Are there returning customers in my database?
  • Do I personalize messages by interests/preferences?
  • Are the buyers interested in purchasing my product again?

The easiest way to get to know your preferences is a short survey or collecting a database using the Newsletter SMS widget. Both methods allow to target future campaigns according to specific parameters (e.g. gender, age, shoe size), as well as tailoring content and offers to specific groups.

Use 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 the messages. Although it might seem not reasonable, it is actually worth signaling the possibility of unsubscribing from the newsletter. A personalized Opt-Out link attached to an SMS allows to unsubscribe from the database and thus exclude one from future campaigns. Removing uninterested, unhappy people works in favor of the effectiveness of the database, advertising budget, and brand image.

Example of Opt-Out SMS

How to measure converstion rate?

Once the message has been delivered, you shoud start to follow the response of the recipients. It is really important 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 to check 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 several percent. This means that the recipients not only read the messages but also willingly take the next step of customer journey.

Similarly to e-mail campaigns, also in the case of bulk SMS, the main determinant of their effectiveness is a conversion rate, i.e. an indicator that 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. It is also worth to add UTM parameters containing the medium type and campaign name in the link, and then shortening the link with a tool such as cut.li. These two actions help to measure the number of clicks but also shortens the message and influences the budget spent on the campaign.

In the case of retail stores, the task may seem a bit more difficult. It may be helpful to use the discount code or coupon link in the message, which can be generated online and shown while purchasing. It is important, however, that the code should be used only in the SMS campaign, thanks to which we will easily check its effectiveness.

Why KPI?

Key performance indicators or simply KPIs give a look at 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 the weaknesses of his creations. That is why you should measure and test your campaigns.