Why SMS May Be Your Best Growth Marketing Opportunity

The Ultimate Guide to SMS Marketing

I was getting a lot of fundraising and voting reminder texts from politicians. I get appointment reminder texts from doctors’ offices. Some companies, like SiriusXM and Delta Air Lines , use text messaging for their online customer support. Zappos texts me shipping updates. Google sends texts for user authentication. Random numbers text me spam. But I can’t remember the last time a brand sent me an enticing marketing or sales message — even though I’ve shared my phone number countless times, downloading content, requesting free demos, and as part of the checkout process.

Intuition would tell us, then, that marketing and sales texts aren’t effective; obviously, every company would send them if they were, right? Wrong. In fact, text messages are read more often and responded to more quickly than any other form of marketing communication. And that's not all.

In This Guide:

I. 17 Key SMS Marketing Statistics

II. A Brief History of SMS Marketing

III. What is SMS Marketing? What is MMS Marketing?

IV. The Top 10 Types of Marketing Texts

V. The Top 10 SMS Marketing Best Practices

VI. The Top 10 SMS Marketing Platforms

VII. 10 Steps to Creating a Successful SMS Marketing Strategy

I. 17 Key SMS Marketing Statistics for 2023 and 2024

1. 9 out of 10 people read the texts they receive within the first 3 minutes
2. The open rate for text messages is 98%, compared to 20% for email
3. The response rate for text is 45%, compared to 6% for email
4. It takes people approximately 90 seconds to respond to a text message, compared to 90 minutes for email
5. 9 out of 10 consumers say they want brands to communicate with them via text
6. 89% of consumers say they prefer texting with businesses over any other mode of communication
7. 63% of consumers say they would switch to a company that offered text messaging as a communication channel — and 63% would recommend their friends switch, too
8. 88% of consumers want their order confirmations, updates and reminders sent as texts
9. 78% of consumers say they’d like to have a text conversation with a brand
10. 75% of consumers say they prefer texts to ads
11. Texting leads after initial contact increases conversion rates by nearly 113%
12. Sales prospects who receive texts convert at a 40% higher rate than those who don’t
13. SMS marketing click-through rates are nearly 600% higher than those for email
14. SMS marketing conversion rates are nearly 900% higher than those for email, as well as, for instance, 140% higher than those for Facebook ads and 467% higher than for Google ads
15. 97% of companies that have launched SMS marketing campaigns say those initiatives have helped them communicate with consumers more efficiently
16. 86% of companies that use text messaging say texts engage customers more than email
17. Retailers that use SMS marketing to their fullest advantage, with targeted messaging, personalization, time-sensitive promotions and strong CTAs can increase their conversion rate to 23%

Plus:

• Consumers are more likely to have push notifications turned on for text than email
• Even with the percentage of brands leveraging SMS marketing skyrocketing 56% year over year, sending your leads and customers text messages still represents a valuable growth marketing opportunity — and MMS marketing is even more powerful

[Side Note: Email isn't dead. Spam is.]

II. A Brief History of SMS Marketing

Today, texting is a regular part of everyday life. It didn’t exist when I was born. In fact, it took another 11-plus years for 22-year-old British engineer Neil Papworth to send the first SMS text. On December 3, 1992, Papworth used his computer to text his friend, Vodafone Director Richard Jarvis, “Merry Christmas.” Jarvis, of course, couldn’t reply because his phone book-sized mobile phone didn’t have a QWERTY keyboard.?

The year before, Congress had already enacted the Telephone Consumer Protection Act (TCPA) to protect consumers from receiving unsolicited calls or messages; under the TCPA, all marketing calls, faxes and text messages are subject to government regulation, and businesses must obtain consent and provide disclosures to be in compliance. This, of course, didn’t dissuade some marketers from fully embracing the practice.?

Here’s what’s happened since.

1992: The first mobile phones that can send and receive SMS text messages go to market (the first text messages are free and can only be sent between people on the same mobile network); Unicode is adopted as the international standard

1993: Nokia presents a new SMS feature, an audio beep indicating a new incoming message

1994: IBM releases Simon, a mobile phone with touchscreen that many consider the first smartphone

1997: Nokia introduces the Nokia 9000i Communicator, the first mobile phone with a QWERTY keyboard (the iconic T-Mobile Sidekick wouldn’t come out for another five years); J-Phone (now SoftBank) releases the SkyWalker DP-211SW mobile phone with the world’s first known emoji set, including one of the most iconic emoji characters in the Unicode Standard, the ‘pile of poo’ emoji

1999: Mobile phone providers start selling smaller phones, and mobile service providers begin offering more affordable phone contracts; texts can now be sent between people using different carriers; Japanese mobile phone operator NTT DoCoMo introduces its integrated mobile internet service ‘i-mode,’ with 176 emojis created by Shigetaka Kurita — sparking the global emoji phenomenon\

2001: Linguist David Crystal coins the term ‘textspeak’ (e.g., LOL, SMH, etc.), calling text messaging “one of the most innovative linguistic phenomena of modern times;” many disagree, but the popularity of texting skyrockets

2002: 250-billion text messages are sent worldwide?

2003: Five- and six-digit short codes for use with text marketing are introduced; and major brands like Nike and General Motors launch the first enterprise-level SMS marketing campaigns

2006: Google begins to convert Japanese emojis to Unicode private-use codes

2007: Apple releases the first iPhone in the US, setting the standard for modern smartphone design; Blackberry’s BBM drives the rise in text messaging, as users engage in encrypted conversations; unlimited mobile data plans are introduced; and, for the first time, the average number of texts sent per month exceeds the number of phone calls made

2009: The first Unicode characters explicitly intended as emojiS are added to Unicode 5.2; Google releases ‘Extra emoji,’ an add-on providing access to more than 1,200 emojis (Google’s press release still refers to emojis as emoticons)

2010: The verb ‘text’ is added to the dictionary; the emoji is finally standardized by Unicode (6.0), allowing brands like Google, Microsoft, Facebook and Twitter to start creating their own universal emojis

2011: Apple introduces an instant messaging service exclusively for macOS, iOS, iPadOS, and watchOS, including an emoji keyboard; 35% of consumers own smartphones

2016-2019: Mobile shopping sessions grow 70%

2020: Omnisend customers (for instance) send 378% more SMS messages than in the previous year; SMS conversion rates also increase 102% year-over-year

2021: 94% of consumers use mobile to shop online; Data Bridge Market Research predicts the SMS marketing market will reach US$38442.44 million by 2030

2022: 55% of businesses use text messaging to communicate with consumers, representing a 27% year-over-increase in SMS marketing adoption

2023: 93% of US consumers opt in to receive texts from a brand, for an average year-over-year increase of 13% per year since 2020

III. Texting Your Customers: What is SMS Marketing? What is MMS Marketing? (SMS vs. MMS)

Short Message Service or SMS marketing refers to the strategy of using text messaging to deliver marketing (and sales and CX) communications to subscribers and/or customers. Multimedia Messaging Service or MMS marketing refers to the strategy of using text messaging with ‘media’ to deliver your communications; as T-Mobile explains it, “Whenever you send a text with an attached file, like a picture, video, emoji… you’re sending an MMS.”

There are many benefits to MMS marketing, or including non-text/rich media elements in your text marketing:

• Whereas you’re limited to 160 characters with an SMS text (or 306 characters with ‘extended messaging’), you can include up to 1,600 characters per MMS message
• Whereas you’re nearly entirely limited to Unicode text with SMS marketing (and images appear as links), you can send images, videos, gifs and even audio that appear embedded in MMS messages
• MMS messages provide a 52% higher CTR
• MMS messages are 800% more likely than SMS messages to be shared on social media or forwarded to friends and family

Unfortunately, there’s always a catch — and MMS marketing is more costly than SMS marketing. (Ask SMS marketing platform providers about their fees.)

IV. The Top 10 Types of Marketing Texts

Like email marketing, the only limit to what you can do with your texts is the extent of your imagination. You can send texts as soon as someone signs up. You can send texts when a user abandons the cart, or opens an email but doesn’t click. You can send texts to provide updates. You can send texts with coupons, gifs and videos. You can even send a series of texts (an SMS drip campaign) to nurture new leads into paying customers and brand ambassadors. Here are some of the most common examples of SMS marketing texts, common because they work:

1. The Welcome Message. It’s one thing to welcome a new subscriber or customer by email; it’s another thing entirely to send a personalized text, which consumers are 450% more likely to open.
2. The Opt-In/Disclosure Message. Yes, text message marketing is legal — but not if you don’t adhere to the requirements established by the TCPA. So, follow up your welcome message with a text that includes a description of the program in which they enrolled; the approximate number of messages they should expect to receive in a defined period; a link to the full terms and conditions of the privacy policy; and instructions on how to opt out from receiving messages (STOP), as well as how they can get help information (HELP)
3. Alerts. Since 98% of consumers open all their texts, SMS is an ideal solution for alerting subscribers and customers about final offers, limited inventory and account issues.
4. Order and Shipping Updates and Confirmations. If you’ve ever ordered online, you know that what often follows is a somewhat tense period of uncertainty — until the order confirmation and shipping confirmation come through. Since we check our phones every 10 minutes, there’s no better method of communicating this important information than text.
5. Time-Sensitive and Limited-Edition Drops. There’s no more immediate or urgent channel than text (90% of consumers respond to texts within three minutes!), so text is the optimal medium for announcing new, time-sensitive and limited-edition releases.
6. Exclusive Offers. One of the most effective ways to generate new leads (in addition to offering gated value-add content) is to promote membership-only discounts and freebies — and, with a 98% open rate, SMS marketing is the best way to send coupons and exclusive links.
7. Special Occasions. Today’s sophisticated consumers expect much more than sales pitches from their favorite brands, and one of the most fun ways to personalize your messaging is to ask new subscribers/customers for important dates (like birthdays) so you can deliver truly personalized, even intimate experiences direct to their phone.
8. Triggered Texts. We all understand the effectiveness of sending automated, personalized emails triggered by user/subscriber actions (like abandoning cart) — and, with text marketing conversion rates exceeding email rates by nearly 900%, there’s no reason not to incorporate triggered texts into your sales funnel.
9. Drip Campaigns. I’m a strong proponent of email drip campaigns because, when done correctly, they can guide your contact from initial curiosity all the way to brand ambassador. Of course, with SMS marketing’s higher open and click-through rates, there’s no reason you shouldn’t experiment with text-based drip campaigns as well. Chances are, they’ll perform better.
10. Customer Service Messages. As I repeat ad nauseam, customer support does not stand alone. To achieve customer success and build long-lasting customer relationships, you need to provide an empathic, authentic, consistent and transparent customer experience throughout the customer lifecycle, from reach and acquisition to conversion, retention and loyalty — and text is the easiest way to communicate with those seeking pre- and post-sale customer and tech support.

V. The Top 10 SMS Marketing Best Practices

Whether you’re sending text-based messages or texts with rich media, there are certain rules that weren’t made to be broken:

1. Never send a text to anyone who has not opted in
2. Always include options for opting out
3. Always identify yourself — there’s no guarantee your subscribers have added you to their contacts
4. Always personalize your messages — and use a customer data platform (CDP) or digital experience platform (DXP) to segment your audiences
5. Always use proper grammar — as enticing as it is to use ‘textspeak’ in your marketing messages, don’t (emojis are OK!)
6. Always send your texts at the right times — with area codes, it’s easier to optimize message timing; A/B test to confirm
7. Always keep it short — in addition to being limited by character count, text messages should also adhere to standard content marketing best practices, and unnecessary words, flowering language and fluff fail to achieve desired results
8. Always include a call to action (CTA)
9. Always incorporate your MMS/SMS marketing into your 360-degree omnichannel digital marketing strategy, leveraging this channel at optimal times and for the most appropriate customers
10. Always use an SMS marketing platform or other AI-powered marketing, sales and/or CX tool to optimize and deliver your messages

VI. The Top 10 SMS Marketing Platforms

Following are the best SMS apps. Some do text only. Some do a lot more. Your homework is to review each text messaging service and request a demo from the ones that look best.

1. Attentive
2. Birdeye
3. EZ Texting
4. ProTexting
5. Sinch SimpleTexting
6. SlickText
7. Textedly
8. Textmagic
9. Text Request
10. Twilio

Then, during your demo, ask the text marketing app vendors these 10 questions:

1. How are your prices determined?
2. Are there any on-site services included?
3. Is your SMS software ‘satisfaction guaranteed?’
4. Is your SMS software customizable to my business?
5. Is your SMS software scalable with my business?
6. Does your SMS software offer additional capabilities — like customer data unification and segmentation, and/or email marketing — or integrate with my other tools (e.g., my CDP or email automation software)?
7. What type(s) of technical support do you offer?
8. What is the average turnaround time for bug fixes?
9. How often are updates released? And when and how are users alerted?
10. What is the installation process? How long does it take? What are the most common hurdles and disruptions?

VII. 10 Steps to Creating a Successful SMS Marketing Strategy

Before you sign up with an SMS platform and start shooting off texts, you need to develop an SMS marketing strategy. This should come as no surprise: as part of your 360-degree omnichannel digital marketing strategy, you need a content marketing strategy, an email marketing strategy, a social media marketing strategy, a digital advertising strategy, and so on. To ensure your texts arrive at the right time, only on the right devices, with only the most effective content, start here.

Step 1. Define your SMS marketing-specific brand voice, value proposition and intent

Start by asking yourselves:

• Will we speak differently via text than we do, for instance, on social media or on our website?
• Will we speak differently depending on the segmented audience receiving the message?
• What are the benefits we’ll be offering those who provide their phone numbers and opt in to receive messages?
• What do we hope to achieve through our SMS marketing strategy? Is it better brand awareness? Streamlined user authentication? More sales??

Then, be sure you can also answer the following:

• Why and how were we created?
• What are our core values?
• What is our value proposition?
• What value do we provide consumers beyond our product/service offerings?
• What makes us special or unique?
• What is our brand personality and voice?
• What is our brand aesthetic or style?

Step 2. Define your audience(s)

• Use your zero-, first- and third-party data to learn as much as you can about your brand ambassadors, existing and past customers, subscribers, leads, website users and social media followers
• Use any feedback your marketing, sales and CX pros may have logged to identify gaps and opportunities
• Use surveys, focus groups and on-site interactive elements learn more about what customers, prospects and the general public think of your brand, your products/services, and your content and messaging
• Develop user personas, including personal background, professional background, user environment, preferred content types, preferred devices, preferred communication methods, attitudes, interests, motivations, needs, goals and pain points, buying motivation(s), and buying scenarios
• Map out the customer journey, identifying all the different paths a social media user might take toward making a purchase; the thoughts, feelings and actions of your prospects and customers at each stage of the customer lifecycle; and how you’ve been using social media to recruit, retain, upsell and/or partner with customers
• Use a CDP and/or DXP to organize and manage all your customers and prospects, segment audiences based on your user personas, and improve the empathy and personalization exhibited in all the experiences you provide

Step 3. Establish your SMS marketing goals

To ensure clear direction for your SMS marketing strategy:

• Define goals that are specific, measurable, achievable, relevant, and time-based (SMART)
• Start with your overall business goals, proceed to your long-term strategic marketing goals and conclude with your audience- and campaign-specific goals
• Identify the digital marketing, sales and customer success KPIs against which you’ll measure the effectiveness of your content marketing strategy and campaigns

Then, outline your expectations for each of the five stages of the customer journey:

1. Reach (Stage 1). Before a consumer has any personal connection to your brand, they may identify a problem, pain point or need that can be addressed by a product or service you provide or discover your brand, product or service through social media, digital ads or search. During this first stage, the consumer is comparing products and brands, conducting research and reading customer reviews. This is your opportunity to reach them with your content. And if the consumer requests more information, you can now contact them directly (e.g., via text).
2. Acquisition (Stage 2). Once the consumer visits your website or sends you an email or social media direct message, they’ve entered the acquisition stage. As the name suggests, this is your opportunity to acquire a new customer. But first you must convert the user to a lead.?If the prospect reaches out by email, text, social media message or chatbot, you’ll need to respond with answers to their questions and solutions to their problems; inquire about their needs and pain points so you can further personalize their experiences; offer the products or services that would best serve them; and educate them on the uses of your products and services. If, on the other hand, the prospect has already made it to your website, they should be able to easily access interactive, personalized, value-add experiences and content that can help them better understand and relate to your brand — and, ideally, make an informed purchase decision.?Of course, to convert website users to leads, you’ll need to offer incentives for signups and/or ‘gate’ some of your most valuable content.?When the prospect's contact info is provided, they convert to a lead, directly accessible via text (or email).
3. Conversion (Stage 3). This is where the value of SMS marketing cannot be debated; although every customer makes purchase decisions on their own time and, occasionally, no nurturing is necessary at all, for most consumers a drip campaign of value-add content and (subtle) sales messaging — delivered via text and/or email — is required for a conversion (sale). No matter how long it takes, or what tactics are deployed, once the lead has made a purchase they have been converted into a customer. The buyer’s journey ends here, at the bottom of the funnel, but the customer lifecycle is really just beginning.
4. Retention (Stage 4). The number-one way to retain customers is to focus on the customer, and not the sale. When customers feel heard, respected and appreciated, they’re more likely to remain loyal to your brand. Here, your SMS marketing takes on a new personality. Once you’ve converted a lead into a purchase, your goal is to cross-sell, upsell and, most importantly, develop loyalty in the hopes of creating a high-value customer, brand ambassador and/or influencer. Of course, you also have the opportunity to turn them off completely, so be sure to continually engage without being pushy.
5. Loyalty (Stage 5). You can't create brand loyalty out of nowhere; it must be nurtured and instilled throughout the customer lifecycle. If you’ve provided consistent, authentic, interactive, personalized and empathic experiences from initial awareness through retention, you have the opportunity to exponentially amplify your reach — and boost your ROI — by empowering brand loyalists to promote you via social media, forums, online reviews and word of mouth. And one of the best ways to foster loyalty is through exclusive offers and other perks, delivered via text (or email).

Step 4. Conduct a competitive analysis

To determine where your competitors are winning and losing in their SMS marketing and other lead generation and conversion optimization efforts:

• Use your SEO tool, apps like Glassdoor and LinkedIn, and the various social media platforms to identify your key competitors
• Focus on your top five competitors, sign up for their SMS (and email) marketing emails, and audit the content, experiences and messaging delivered by each brand as well as the users and influencers who develop content on the brand's behalf
• Benchmark your SMS marketing performance against industry standards
• Perform a SWOT analysis, determining your strengths, weaknesses, opportunities and threats across brand, product/service, marketing, sales and customer support
• Identify gaps in your existing SMS marketing strategy
• Strategize methods for addressing any gaps, weaknesses, threats or opportunities

Step 5. Audit past conversion, retention and loyalty marketing campaigns and content

Once you’ve clarified who you’re targeting and what you hope to achieve with your SMS marketing, look back at what you’ve already created — and how it performed — to identify trends and determine what can and should be repurposed.?

• Which types of content have and have not worked?
• Which types of campaigns have and have not worked?
• Which distribution dates and times have and have not worked?
• Is our content up to date and optimized for engagement and conversion?
• Does our content meet the requirements for the intended stage of the customer lifecycle?
• Does our content have a clear target audience?
• Does our content include an appropriate CTA?
• Is there any existing content that can be repurposed for our SMS marketing efforts?
• Is there any existing content that can be used to inspire new SMS marketing strategies or tactics?

Step 6. Outline your SMS marketing content development and distribution roles, responsibilities, processes and procedures

Before you begin planning and then creating custom SMS marketing content, you need to secure buy-in from all parties on how your content will be produced, disseminated, tested, monitored, analyzed and optimized. Specifically:

• Who are our SMS marketing strategists?
• Who are our SMS marketing content creators?
• Who are our partner content creators, including social media influencers, other brands and customers who provide user-generated content?
• Who are our SMS marketing content reviewers?
• Who are our SMS marketing campaign managers?
• Who are our SMS marketing performance analysts?
• How are our SMS marketing campaigns developed?
• How are our content themes and subjects determined?
• What types of content do we create? What unique step(s) does each type require?
• How are our deadlines determined?
• At what cadence is our content released?
• What type of project management style do we use?
• What project management software and/or other martech will we leverage for our SMS marketing planning, scheduling, implementation, testing, analysis, reporting and optimization?

Step 7. Get inspired!

Before moving onto planning and creation, get inspired. Use proven user-centered design thinking techniques — like moodboards, mockups, storyboards and wireframes — to collect and brainstorm off the concepts, designs, media uses and storytelling techniques of your competitors and the brands experiencing the greatest success using SMS marketing.

Step 8. Develop your editorial plan and content calendar

Finally, you can flesh out your SMS marketing ideas. In addition to leveraging all the inspiration from Step 7:

• Interview internal stakeholders on trends, topics and techniques they think most appeal to your audiences
• Look back at your audit and identify consistencies across all best-performing campaigns
• Ask your high-value customers and brand ambassadors what inspired them to subscribe, request a demo, make a purchase, make additional purchases, and/or promote your brand
• Ask your past followers and customers what it is about your brand, products/services, values or messaging that inspired them to unfollow you or stop spending

Then, use your (already purchased) project management software to:

• Add all steps, projects and deadlines related to your SMS marketing efforts to your master calendar — and be sure to consider the thin line between active, engaging messaging and aggressive, overcommunication
• Create a timeline for each SMS marketing campaign, project and assignment
• Assign all roles from development to approval and from distribution to monitoring, analysis, iteration and optimization

Step 9. Implement a beta, split test everything, iterate, optimize and prepare for launch

The truth is: You can always split-test something else. And you can always optimize further. But before you get started, be sure you’re set up to measure performance against the most critical KPIs. With these metrics, you can run your beta, conduct a variety of tests, continually monitor and adjust, and even optimize your strategy before launch.

To determine the effectiveness of your lead generation and conversion efforts, measure:

1. New leads generated. When it comes to leads, there are a variety of essential metrics, including total number of leads, leads per source, and cost per lead. New leads generated refers to the amount of new leads added to your CDP or CRM during a given time period or as the result of a specific campaign. This information can be used to measure the effectiveness of the campaign or your overall SMS marketing efforts, and is of utmost importance because leads are what the sales team uses to convert website visitors from interested consumers to paying customers.
2. Lead conversion rate. The lead conversion rate, or website traffic/lead ratio, tells you the percentage of website visitors who convert to leads as a result of your on-site lead generation mechanisms (such as a demo request, a content download or a newsletter signup form). This metric is important because it provides details on the overall quality of your website traffic, as well as which sources are producing the most leads.
3. Lead-to-sale conversion rate. Also known as sales conversion rate and lead-to-customer conversion rate, the lead-to-sales conversion rate refers to the percentage of your leads that convert (e.g., as a result of your SMS drip campaign or sales conversations) to customers. To determine your sales conversion rate, divide the number of leads converted by the total lead volume and then multiply it by 100%.

To determine the effectiveness of your customer retention and loyalty efforts, measure:

1. Churn rate and MRR (monthly recurring revenue) churn. The churn rate is the rate at which your customers stop subscribing or shopping with your brand over a specific time period. Low churn rate, obviously, reveals customer satisfaction; high churn rates mean there’s something wrong with the product or service, your marketing of that product or service, or the amount of effort required to subscribe to or purchase that product or service. To calculate your churn rate: set your analysis period (e.g., a month, a quarter, six months, or a year); subtract the number of customers you had at the beginning of the time period from the number you had at the end; and divide this figure by the number of customers you had at the beginning. For instance, if you had 100 customers on day one and 75 on day 30, your churn rate is -25% ((75/100) x 100 = -.25 = -25%). Your MRR churn, meanwhile, tells you the amount of monthly recurring revenue gained or lost as a result of your customer churn.
2. Customer effort score (CES). As it sounds, CES measures the amount of effort your customers have to expend to execute specific actions, like completing an online form, finding a product or resolving a technical issue. To determine your average customer effort score, you’ll again need to create a survey; this time it should ask customers to rate the level of effort required to complete an activity or series of activities. The results will tell you whether you really designed for UX, and what you should change to improve the user experience.?
3. Customer sentiment. While many organizations strive to ascertain customer sentiment using traditional CX KPIs, customer sentiment encompasses more than a customer’s level of satisfaction or likelihood of promoting the brand; customer sentiment is complicated, qualitative and ephemeral — measuring how the customer feels about you.?Customer sentiment analysis refers to the examination of customer sentiment as expressed by customers (or users) across platforms and devices throughout the customer journey; this can include data collected via voice-of-the-customer programs, self-service portals, customer surveys, customer reviews and even social media posts, blog post comments or email replies. Customer sentiment score refers to the value applied to customer sentiment, expressed numerically in a range typically between 0 and 5, 0 and 10 or 0 and 100. To measure customer sentiment at your company, you could develop your own manual scoring system; or, you could invest in AI.?These AI-powered tools employ machine learning to generate sentiment scores from algorithms that scan customer interactions, tracking phrases, words and behaviors with pre-assigned values, and then integrating measurements to gauge whether customers have positive, negative or neutral views; they also provide actionable insights based on when, where and why customer sentiments develop.
4. Customer satisfaction score (CSAT). The CSAT demonstrates each customer’s level of satisfaction; analyzed in totality, your customer satisfaction scores can tell you whether you’re truly offering customer-centric experiences — and, if not, what needs to be changed. Usually measured on a five-point scale, from very dissatisfied to very satisfied, you can use the CSAT to gather feedback during any stage of the customer lifecycle. All you have to do is establish criteria for your scoring, establish the metric that equates to a positive score, and include customer survey forms in your digital marketing and CX communications. Then, to determine your organization-level percentage score, multiply your pre-established positive score by 100. For instance, if you have 50 positive scores from a total of 100, your CSAT is 50% ((50/100) x 100 = 50%).
5. Customer health score. The customer health score is used to determine whether or not a customer will remain loyal over time. In contrast to most other customer experience metrics, the customer health score requires strategic legwork and is developed from a collection of the other CX KPIs most important to your unique business. Among the most commonly included metrics are:?product/service usage period; product type (free/paid, license level, etc.); number of interactions with the support team; money spent with your brand; social media posts about your brand; referrals to your brand; and willingness to answer customer experience surveys. Based on the metrics that make the most sense for you, develop a grading system for your customers; then, for easier segmentation and personalization, divide them into four categories: high-value; healthy; unhealthy; and at-risk.
6. Net promoter score (NPS). Often coupled with CSAT, NPS measures the likelihood a customer will recommend you to others — and, ideally, become an influencer for your brand. To determine your NPS, develop a survey with a single question or multiple questions geared toward promoting and sharing, on a scale from 0 to 10, from “not likely at all” to “very likely.” Customers who provide (average) scores between 0 and 6 are considered detractors; passive customers typically score between 7 and 8; and your promoters will give you a 9 or 10. Then, to calculate your NPS, simply subtract the percentage of detractors from the percentage of promoters. And for more detailed, nuanced, qualitative feedback, ask an open-ended question, as well. All of this information can be automatically added to your customer profiles in your CDP or DXP.
7. Customer lifetime value (CLV). The CLV is a forecasting of the net profit an organization can expect to earn from a customer over the entire period of their relationship. When measured and ranked by customer, the CLV can help you segment — and better personalize the experiences for — your highest-value customers. When combined and contrasted with total expenditures, you can determine the overall effectiveness of your digital marketing, sales and CX efforts. To determine your average CLV: calculate your average purchase value; multiply your average purchase value by how often a purchase is made; and then multiply this figure by your average customer lifespan. For example, if your average purchase is $100, made twice a year for 3 years, your CLV is $600 ($100 x 3 x 2 = $600). To use this measurement to improve your marketing to high-value customers, create a list of the customers with a CLV exceeding your average.

Finally, to measure the cost-effectiveness and ROI of your SMS marketing strategy, use the following:

1. Cost per lead. As with anything in business, SMS marketing needs to be measured in terms of ROI; when measured alongside cost per acquisition (or customer acquisition cost), customer lifetime value and return on marketing investment, the cost per lead metric can provide valuable information on the cost-effectiveness of your marketing efforts.
2. Cost per acquisition. Like the cost per lead metric, which indicates how much you spend to generate a new lead, cost per acquisition, or customer acquisition cost, measures the cost of converting that lead into a customer.?
3. Customer retention cost. Investing in new customers is between 500% and 2500% more expensive than retaining existing ones. Of course, retaining customers costs money too. And to ensure your marketing and CX strategies are producing positive ROI, you need to measure the cost of your customer retention efforts. To calculate your customer retention cost, or CRC, add all of the expenses incurred in keeping (and obtaining!) customers and divide that figure by the number of customers in your database. If your CRC is higher than your MRR, or monthly recurring revenue, it’s time to make some changes.
4. Earned growth rate. NPS was invented by Fred Reichheld, who introduced “the one number you need to grow” in Harvard Business Review in 2003. “Since then, NPS has spread rapidly around the world” and is now used by two thirds of the Fortune 1000. Unfortunately, this has proved problematic, with “self-reported scores and misinterpretations of the NPS framework… sow[ing] confusion and diminish[ing] its credibility.” So, Reichheld and team developed a new “complementary metric that drew on accounting results, not on surveys," to quantify actual customer value. Earned growth rate, the researchers realized, would be “far more resistant to gaming, coaching, pleading, and the response biases that plague the results of non-anonymized surveys.” It would also “reinforce the effectiveness” of the original KPI, NPS, by providing “clear, data-driven” connections across and among customer success, repeat and expanded purchases, word-of-mouth recommendations, positive company culture and business results. Earned growth comprises two elements: NRR, or net revenue retention; and ENC, or earned new customers. Earned growth rate measures revenue growth generated by returning customers and their referrals, while the earned growth ratio measures the ratio of earned growth to total growth. To determine your earned growth rate, begin by calculating your NRR as follows: organize your revenue by customer; tally current year revenues from existing customers (who were also customers the year before); divide this amount by the previous year’s total revenues; and express this figure as a percentage. Next, to “ascertain why new customers have come on board,” isolate the percentage of new customers earned through referrals (your ENC) from new customers gained via other methods. (Since “few firms” could quantify their ENC, Reichheld and team “pioneered a solution,” simply by adding a “relatively painless step” to the customer onboarding process: asking them the “primary reason” they gave you their business.) Finally, sort your customers into two categories, “earned” (e.g., from a referral) and “bought” (e.g., a Super Bowl ad or sponsored social media post); use a set of expected customer responses, along with an open-ended “other” response, to gather additional information to help you fine-tune the categories and options over time; and determine your earned growth rate by adding your NRR and ENC together?and then subtracting 100%. (Of course, if you want to compare your results to those of your competitors, you’ll need them to follow the same earned growth rate framework.)
5. Return on marketing investment. As it sounds, your return on investment from marketing is a measure of how much revenue you’ve generated from a specific campaign — during a specific time period, or overall. To determine your marketing ROI, subtract your marketing costs by your sales growth, multiply by 100, and divide by your marketing investment.
6. Monthly recurring revenue and expansion MRR. Also a sales metric and ideal for SaaS and subscription-based businesses, your MRR tells you how much your customers are spending with you each and every month. Expansion MRR identifies how much your customers are spending outside of recurring subscriptions or payments. To measure your total monthly recurring revenue, multiply your number of monthly customers by their average monthly spend; for expansion MRR, add all additional revenue and multiply that figure by your total number of customers.

Step 10. Implement, monitor, analyze, report and optimize

Your beta was your limited test run. Launch your campaign(s), and don't lose focus.

• Monitor performance
• Survey leads, customers and lost opportunities
• Develop data visualizations and present your performance analysis to leadership
• Continually test, iterate and optimize
• Ensure ongoing communication and collaboration across marketing, sales and CX

Need Help Developing, Implementing or Fine-Tuning Your SMS Marketing Strategy?

Email [email protected] or message me on LinkedIn to discuss how I can help you meet your SMS marketing needs and goals.

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