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The Value of Adding SMS as a Marketing Channel

What’s in This Article

Nowadays, having an email program is non-negotiable for any brand, regardless of its size. On the other hand, only 39% of businesses use SMS (Short Messaging Service) marketing. Many marketers are interested in SMS (maybe that’s why you’re here), but launching this new communication channel can feel risky considering less than half of other companies have done so. Adding a new channel also requires effort obviously, but in this article, we’ll discuss why the juice is worth the squeeze.

Realizing Value: What Sets SMS Apart

So what’s so special about SMS marketing? After all, text messages are just a combination of words and images like any other message type. Next, we’ll go in-depth on a few of SMS’s differentiators.

Improving Engagement Metrics

As mentioned above, every single brand out there is fighting for attention within the consumer’s email inbox and most brands are sending out multiple emails per week (sometimes multiple per day). On average, only 19% of emails are lucky enough to even be opened, let alone drive the desired result of routing the consumer back to the website with an average CTR of 2.44%.

Meanwhile, 95% of text messages are read within the first three minutes of receipt! Conversion rates are also impressive. What’s more, according to G2, text messages have an average open rate of 98% and 33% of SMS recipients react to CTAs in SMS marketing messages, and 47% of them end up making a purchase.

Adding a Communication Channel

All that being said, the purpose of adding SMS is of course not to replace your email program, but to add an to the overall customer experience. Customers have unique preferences and may want to interact with marketing channels differently. If customers are subscribed to both SMS and email, for example, they’ll be exposed to your marketing content very regularly but in a way that’s individualized.

Email can be better suited for more lengthy, informative, and frequent communications. SMS, however, can be a perfect fit for shorter, more time-sensitive, messaging such as flash sales or low-stock alerts. And, if you want to ensure that customers see a specific, maybe more urgent message, SMS can make that happen. It’s worth repeating: 95% of text messages are read within the first three minutes of receipt.

Coordinating a Cross-Channel Strategy

We just covered when to use email and when to use SMS, but when both channels are used cohesively, rather than independently, it can create a very well-polished customer experience. Below are some examples of simple, intermediate, and advanced strategies to consider:

  • Simple: Setting frequency caps to ensure both channels don’t fatigue the customer
  • Intermediate: Collecting event data to segment customers based on the channel they engage with most
  • Advanced: Experimenting with multi-step journeys (like a welcome series, for example) and combining data from both channels to find the optimal channel mix, message timing, etc.

Iterable customer, Madison Reed, for example, wanted to revamp their reactivation journey that would trigger after a missed order. Through much experimentation, they found optimal results when an email was sent first, then direct mail, and finally an SMS nudge.

SMS Marketing is a Two-Way Street

The final differentiator for SMS is the ability to collect customer feedback effectively and quickly. A common example is the option to respond with a single number or letter that allows the brand to gather zero-party preferences. While much more complex, some organizations even have full two-way conversations with customers via SMS for functions like customer service. Whatever the use case, those high open and engagement rates come in handy yet again and unlock an extremely swift form of zero-party data collection.

Link shortening and click tracking are also important features to be aware of when it comes to collecting zero-party data from your customers. These features in tandem allow you to automatically shorten URLs contained in SMS messages and collect additional engagement metrics around how users are engaging with your SMS campaigns. Visibility into these metrics will then allow you to make data-driven adjustments to your SMS and cross-channel marketing strategy.

SMS at Every Lifecycle Stage

First, let’s get to the good stuff and list out the potential revenue streams and business outcomes that would motivate a marketer to introduce SMS as a new channel. Here we break the customer lifecycle up into four primary stages: onboard, grow, retain, and winback.

  Business Outcomes Example SMS Campaigns
Onboard
  • New customer conversion
  • Product adoption & stickiness
  • 1st / 2nd purchase promos
  • Two-way conversations to understand customer preferences
Grow
  • Purchase frequency
  • Engagement & loyalty
  • Referrals & reviews
  • Flash sales / new product launches 
  • Hold easy-to-enter contests
Retain
  • Retention
  • LTV
  • Customer satisfaction
  • Exclusive promo codes for loyalty members/SMS subscribers
  • Transactional or reminder messages
Winback
  • Reactivation of idle customers
  • Birthday or other milestone messages
  • Low stock alerts on browsed items

Onboard

For your newest SMS subscribers, the goals of this stage are to drive the initial purchase and also set the foundation for a high customer lifetime value (LTV). Immediately demonstrating the value of being an SMS subscriber will increase the likelihood of customers staying subscribed long-term. Offering a first purchase incentive—”sign up for SMS to receive 20% off,” for example—is probably the most common onboarding campaign, but also consider asking a multiple choice question to better tailor future messages.

Grow

Communicating via an additional channel can inherently increase customer engagement and share of voice, but for many companies, a more tangible goal in this stage is driving purchase frequency. By now you may be able to increase engagement by incorporating customer preferences such as preferred send time or relevant products. Some campaign types to consider are flash sales, new product launches, or holding easy-to-enter contests.

Retain

Your most loyal and long-standing customers deserve a little bit of special treatment. Maintaining long-term customer satisfaction is key to a high LTV and ensuring your SMS subscribers stay subscribed. While simple, transactional and reminder texts can be a high-value add for customers. (Sending out exclusive promo codes for loyalty members or SMS subscribers doesn’t hurt either.)

Winback

SMS can be an effective tool for recapturing a customer’s attention, especially if they’ve stopped engaging with other channels. The goal here is to reactivate your idle customer base with your most attention-grabbing campaign type. Examples include low-stock alerts on browsed items or birthday/milestone messages.

The Value of SMS

Despite all of the points stated above, SMS still remains a largely untapped resource.
There is an opportunity to differentiate your marketing strategy with a channel that has a proven track record and countless substantiating data points. SMS undeniably stands out based on open, click-through, and conversion rates. Communicating via a new channel will inherently increase engagement with those customers, but creating a cohesive cross-channel strategy will take it to the next level.

The unique ability of SMS to gather feedback can then help you continuously iterate on your strategy to create and incorporate each customer’s preferences. There are so many ways to get creative when adding SMS and unlock value throughout the entire customer lifecycle.

To learn more about adding SMS to your cross-channel marketing strategy, reach out to your CSM or schedule an Iterable demo today.

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