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SMS Marketing KPIs You Need to Keep Track On

Updated: Jun 12, 2023

A person tracking KPIs of an SMS campaign

SMS marketing is a great way to reach your customers and prospects directly. It is an effective channel for communicating with them and can be used to drive sales, generate leads, and more.

However, as with any marketing strategy, measuring success and continuously optimizing campaigns are essential to create maximum impact. This is where SMS marketing KPIs come in. By tracking key metrics such as click-through rates, conversion, and opt-out rates, businesses can gain valuable insights into their SMS campaigns and make data-driven decisions to improve their ROI.

In this blog, we will dive into the SMS marketing KPIs. Explore what they are, why they matter, and how they drive success in your SMS campaigns.

Understanding SMS Marketing KPIs

Businesses must determine the KPIs that will enable them to monitor the success of their SMS initiatives to run successful marketing campaigns. These KPIs are quantifiable metrics that can assist businesses in understanding consumer behavior, preferences, and responses to SMS marketing campaigns.

What are SMS Marketing KPIs?

SMS marketing KPIs are measurable values or metrics that help companies to understand their SMS campaigns' success rate, what are the customers' preferences, understanding consumer behavior, and their responses to SMS marketing initiatives.

By monitoring these metrics, companies can make data-driven decisions and optimize future SMS campaigns for better engagement and ROI.

Importance of SMS Marketing KPIs

Businesses must track SMS marketing metrics to determine the success of SMS marketing campaigns. Key performance indicators enable a firm to evaluate the effectiveness of its SMS campaigns and determine what is working and what is not.

So, to make the necessary adjustments to improve SMS engagement rates and drive revenue for the company. By tracking KPIs, businesses can ensure that their SMS campaigns deliver value to their customers and generate ROI for the business. 

For example, suppose an online retail store uses SMS marketing to promote sales of its products. By sending a text message with a coupon code to their subscribers, it can track how many subscribers redeemed the code and made a purchase. The conversion rate would then be calculated by dividing the number of purchases by the total number of SMS messages sent.

Key Performance Indicators for SMS Campaigns

The effectiveness of SMS campaigns can be evaluated through four KPIs. Here are the four key metrics to consider when measuring the success of an SMS campaign:

  1. SMS Click-Through Rate (CTR)

  2. SMS Conversion Rate

  3. SMS Opt-Out Rate

  4. Customer Retention Rate

01. SMS Click-Through Rate (CTR)

You can always attach a URL of a page in the SMS, which will redirect you to a particular page, so SMS Click-Through Rate measures the percentage of recipients who clicked on a link or call-to-action in the message.

A high number of clicks indicates that your message worked with the audience and they are engaging well with your brand and services. Low CTR suggests that the message did not work well with your audience and needs improvement. A good SMS Click-Through Rate typically falls into when you have a 10%-20% conversion. This means that out of the 1000 people who received your SMS, 100 to 200 people clicked on the link or (call-to-action) within the message. However, what constitutes a "good" CTR can vary depending on the industry, audience, and message type.

Here's an example of a real-time message that has the potential to achieve a good Click-Through Rate (CTR).

  • "Hey [Recipient Name], I just wanted to let you know that our flash sale is happening now! Get 30% off your purchase when you use the code FLASH30 at checkout. Hurry, this offers ends in 24 hours! Shop now at [insert URL]."

You can see this message is timely sent, personalized in the starting, and includes a clear call-to-action with a time-limited offer, and it also includes a discount code to incentivize recipients to act. Example of an SMS message that may result in a bad SMS Click-Through Rate (CTR):

  • "Sale alert! Get 10% off your purchase now. Visit [insert URL] to shop."

This message is short and to the point, but it lacks personalization and a clear call-to-action that would drive the recipient to click on the link and visit the page.

02. SMS Conversion Rate

After the recipients have already clicked on the URL link in the SMS, when they proceed further on the page and use the coupon code or navigate further, these recipients are known to be converted ones. SMS Conversion Rate is a metric to measure the percentage of recipients who performed the desired action after receiving an SMS message (such as purchasing or filling out a form). A high conversion rate indicates that the message was persuasive, relevant, and compelling to the target audience, which drove them to act.

Conversion rates can be improved by better personalization of messages, targeting the right customer base, and making them time-sensitive, which can help businesses to improve their conversion rate.

03. SMS Opt-Out Rate

It measures the percentage of recipients who have unsubscribed from the SMS messages. A high opt-out rate indicates that messages do not resonate with the audience or too many messages are being sent, which can lead to annoyance and frustration. Keeping this number as low as possible is important because it will help you improve the quality of your messaging and increase conversions. To lower your SMS opt-out rate, make sure that:

  • You send personalized messages based on a user's behavior or preferences (for example, if they have purchased from you before).

  • Your content is relevant to each recipient (e.g. if someone signs up for an email newsletter about fashion trends but receives a coupon for baby clothes instead).

04. Customer Retention Rate

Customer retention rate is a metric that measures the percentage of customers who continue to use your services or purchase your products after an initial interaction. For SMS campaigns, it refers to the percentage of subscribers who remain subscribed after receiving messages from your brand.

It is a critical KPI for businesses to track as it helps in measuring the long-term success of an SMS campaign. High customer retention rates are desirable for any business because they indicate that the customers are satisfied with the services or products and are more likely to return in the future. It is essential to maintain a healthy balance between promotional messages and valuable content that can help in building long-term relationships with customers.

In conclusion, tracking these four key performance indicators: SMS Click-Through Rate, SMS Conversion Rate, SMS Opt-Out Rate, and Customer Retention Rate, can help businesses to evaluate the effectiveness of their SMS campaigns, identify areas for improvement and make necessary adjustments to achieve better results.

Measuring the Effectiveness of SMS Marketing

Now that we have covered the key metrics to track, let's dive into how to measure the effectiveness of SMS marketing campaigns.

Setting SMART Goals for SMS Campaigns

Before launching an SMS campaign, it is essential to set specific, measurable, achievable, relevant, and time-bound (SMART) goals to measure the campaign's success accurately. Examples of SMART goals for SMS campaigns include increasing CTR by 10%, generating new leads, or increasing sales by 20% monthly.

Measuring SMS ROI

Calculating the revenue generated from the SMS campaign and comparing it to the cost of the campaign is Measuring SMS ROI. To calculate the ROI, subtract the campaign cost from the revenue generated and divide it by the campaign cost to get the ROI percentage. A positive ROI indicates that the SMS campaign generated more revenue than the cost.

Tracking SMS Engagement Metrics

Tracking SMS engagement metrics helps businesses understand their customer's behavior and preferences, which can be used to optimize future campaigns. Engagement metrics may include open rate, response rate, time spent on landing pages, and more.

Strategies for Improving SMS Marketing KPIs

To improve your SMS Marketing KPIs, ensuring that the content you send is relevant to your audience is very important. Otherwise, they may unsubscribe or mark your messages as spam. So here are some strategies for you to improve your SMS Marketing KPIs.

01. Utilize Segmentation

One effective strategy is to use segmentation, which involves dividing a large group into smaller subgroups and targeting each segment with specific messaging based on their interests and needs.

Sending the same message to everyone will not work, so you need to use the segmentation strategy. This will ensure that your messages reach the right customers. Segmentation can also help you personalize your messages, which can help improve engagement and conversion rates.

For example, if you sell shoes online but notice that most of your customers are women aged 25-35 who live in New York City, then create two separate lists based on those characteristics so that when it comes time to send out an offer or discount code via text message (SMS), only those who fall into both categories will receive it!

02. Optimizing SMS Marketing Campaigns for Success

To optimize your SMS campaigns, start by defining clear goals and objectives. This will help you tailor your messages to the right audience and create compelling calls to action that drive engagement. Segmenting your audience based on demographics, previous behaviors, and interests is also important. This will enable you to send relevant messages that resonate with your customers.

03. Personalizing SMS Messages for Maximum Impact

Personalization is the way to make your SMS marketing campaigns more impactful. Utilize customer data to add a personal touch to your messages by including their first names, preferences, and behaviors. This can significantly increase open and response rates. Personalizing your messages can increase customer retention rates as it makes them feel valued and connected to your brand. Additionally, incorporating location data can help you tailor messages based on the recipient's current location, making them timelier and more relevant. So, personalize your messages and give your SMS marketing campaigns a boost!

04. Testing and experimenting with SMS Marketing

When it comes to SMS marketing, experimentation is key to improving your KPIs. One effective way to experiment is by using A/B testing. For instance, you could test different message formats or call-to-actions (CTAs) to see which version generates better engagement and conversions.

Let us say you are a clothing retailer looking to boost sales via SMS marketing. You might send out two different text messages promoting the same sale but with different CTAs. One message might include a CTA to "Shop Now," while the other message includes a CTA to "Learn More." By tracking the engagement rates of each message, you can determine which CTA works better with your audience and use these findings in your future SMS campaigns.

Once you have implemented the strategies listed above to improve your SMS marketing KPIs, it is important to assess the performance of your campaigns regularly. Keep track of key metrics and adjust your strategies accordingly to drive better results.

By evaluating your metrics, you can determine what strategies are working and what needs to be changed for future campaigns. With the right approach, you can keep your customers coming back for more and ensure the success of your SMS marketing efforts. So, do not forget to track and optimize your campaigns to drive better engagement and retention!

Real-World Examples of SMS Marketing KPI Success

Case Study: Retail SMS Campaign with High Conversion Rates

A fashion retail store launched an SMS campaign to promote their new collection to subscribers. The campaign targeted users who had shown interest earlier in similar collections. The messages sent to them were personalized and included exclusive offers with a clear (call-to-action). The campaign resulted in a conversion rate of 20%, which was 5% higher than their previous campaigns.

Case Study: Healthcare SMS Campaign with Low Opt-Out Rates

A medical clinic implemented an SMS campaign to remind the patients about their upcoming appointments. Messages were sent out a day before the appointment, which included a link to confirm or reschedule the appointment. The campaign resulted in a low opt-out rate of 2% and an increase in confirmed appointments by 15%. The low opt-out rate was attributed to the valuable and time-sensitive content of the messages.

Case Study: Service Industry SMS Campaign with High Engagement

A home services company launched an SMS campaign to promote their seasonal offers to their subscribers. The campaign included interactive elements such as polls and surveys to engage the audience. The messages were also personalized and sent during the weekends when the audience was most likely to be free. The campaign resulted in high engagement rates, with an average click-through rate of 25% and a response rate of 15%. The high engagement rates were attributed to the interactive and personalized nature of the messages.

Frequently Asked Questions

01. What is a reasonable SMS click-through rate?

A reasonable SMS click-through rate (CTR) can vary depending on factors such as industry and campaign type. However, a benchmark to aim for is around 15-20%.

02. How can I improve my SMS conversion rate?

To improve your SMS conversion rate, you can decide who will be the targeted audience, consider personalizing your messages according to the customer, and make call-to-action (CTA) in SMS clear and compelling. Additionally, ensure that your landing pages are optimized for mobile, and your checkout process is smooth and user-friendly.

03. What should I do if my SMS opt-out rate is high?

If your SMS opt-out rate is high, it may be a sign that your messaging is not connecting well with the audience, or you are sending too many messages. Consider adjusting your messaging strategy and frequency and testing different approaches to find the best for your audience.

04. How can I choose the right SMS marketing analytics tools?

When choosing SMS marketing analytics tools, consider factors like ease of use, data visualization capabilities, and integration with other marketing tools. Look for platforms and tools that offer robust reporting and analysis features, allowing you to segment your audience and track key metrics over time.

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