How to use SMS to drive sales
SMS marketing can be confusing - here's our guide, featuring advanced advice on how to target customers through their mobile device and drive sales.
Text messages have come a long way.
When text messages were first introduced in the late nineties, most phones were the size of bricks, emojis hadn’t been invented, and most people used their mobile phones for texting and calling – and nothing else.
Fast-forward to today and SMS is one of the most widely used data services in the world. An estimated 23 billion text messages are sent every day (that’s 270,000 every second), and 90 per cent of texts are opened within three minutes of being received.
Not surprisingly, text message marketing is increasingly seen as a powerful channel for businesses to communicate with their customers.
“Brands began experimenting with SMS messages a few years ago, but I think we started to hit an inflection point around the time of the COVID-19 outbreak,” says Josh Siegel, vice president of SMS at Klaviyo. During the 2021 Christmas sales period, the marketing automation platform experienced more than a 10-fold increase in the number of messages it sent on behalf of clients.
This new form of mobile marketing sees businesses send a variety of texts to its customers: welcome or opt-in messages; sales alerts; appointment reminders; birthday messages; product launches; abandoned cart reminders; and customer service follow-ups.
The potential to engage with customers via their mobile devices is high, given that texts have an estimated open rate of 98 per cent, compared to 20 per cent for email. According to research from Klaviyo, over one third of consumers choose SMS messages as their preferred channel to hear from brands. For younger consumers such as Gen Z or millennials, that number is even higher, at 50 per cent.
Over one third of consumers choose SMS messages as their preferred channel to hear from brands.
“SMS is going through that curve of wild adoption, but because it is a new marketing medium, many businesses don’t know the rules around using it and how to set themselves up for success,” says Siegel.
Follow this guide to nail your SMS strategy.
1. Get the basics right
To start, you’ll need to sign up to a marketing automation provider, such as Klaviyo, Attentive or SmartrMail. These platforms will allow you to send a bulk SMS – generally from an online SMS dashboard – and will manage your data and permissions.
Costs will vary, with many SMS marketing platforms offering tiered pricing, whereby you can send a specified number of messages for a monthly fee.
With SmartrMail, sending 1000 contacts one SMS of 160 characters costs roughly $50, says Nicolas Vibert, the company’s growth manager.
According to MarketHire, sending one SMS campaign per week to a list of 10,000 subscribers would cost around $600.
By comparison, sending your customers marketing emails via a basic automation platform can cost as little as a few dollars per month (with Mailerlite, you can get free plans for up to 1000 subscribers, while if you have 10,000 subscribers, sending unlimited emails costs around $70 per month.
Keep in mind, though, that the costs associated with executing an SMS marketing campaign are lower than that of an email marketing campaign – with no need to pay for a designer or long-form copywriter.
2. Secure customer consent
Before you start sending texts, customers need to agree to receive messages to their phone number. They must opt in.
In Australia, permissions are a legal grey area. To send an SMS message, you need ‘inferred permission’, which could simply mean that a customer has joined a loyalty program in store. “The definition of ‘inferred’ will vary according to who you ask,” says Vibert. “We err on the side of caution and recommend that permission to send an SMS is specific and explicit. v
In Australia, brands who do not comply with the rules around permission could be in breach of the Spam Act 2003, and may be prevented from sending further SMS advertising.
Permission can be collected during the checkout process or through a landing page or form that appears on your website. Consider giving the customer a compelling reason to join the SMS list, such as VIP membership or an exclusive offer.
"It's a bad customer experience to send SMS messages to customers who don’t want to receive them.”
3. Set your goal
Next, consider the motivation behind your SMS marketing strategy. With each text, are you seeking to welcome new customers, alert them to a promotion, invite them to an event, or re-engage with lapsed customers?
Remember, every text message is an opportunity to engage with your customer and work towards converting a sale. According to Anup Khera, vice president and general manager of international at SMS marketing provider Attentive, a recent customer survey found that 63 per cent of respondents who subscribed to a brand had made a purchase based on a text message exchange.
See some examples of different types of texts below.
The Welcome text:
The Sales Pitch:
The Lure-Back:
4. Keep it brief
As illustrated, briefer is better when it comes to SMS marketing.
One reason for this is cost – if you exceed the 160-character limit, you’ll pay for it. A message of 200 characters, for example, will incur the cost of two SMS messages; a message of 500 characters will be priced as three messages.
Short and snappy texts are also preferable from a user perspective. “Clear, brief messages tend to perform well," says Siegel. “People glance at their phones quickly, so you have to capture their attention and it has to make sense. If you push the call to action too far down, it can be lost.”
5. Experiment with images, videos and emojis
“Using a picture [in a text] can be effective, but be careful what you choose,” says Siegel. “Test to see what works for your audience. The research on the use of emojis is mixed… Some people don't like it – it depends on the context and the type of business.”
Adding emojis, images and videos to your messages will also incur extra costs. And with the current tech, a video can only be sent via a link, rather than embedded in the SMS message itself.
6. Get personal
Avoid a generic blast. The most common mistake made by merchants is overlooking the personalisation that an SMS marketing strategy requires.
“It’s really important to tailor the message, as opposed to [sending out] a blanket offer,” says Vibert. “Many merchants think that they can simply export a list of phone numbers that they accumulated over the years through their in-house booking system and just blast them with an SMS campaign every week. It will simply not be effective.”
Khera agrees, adding that there is no need to use guesswork in targeting different segments via SMS. “For marketers, text messages stand out as a channel that’s uniquely data-informed and measurable,” he says. “Its immediacy allows brands to segment and personalise messages in real time to [turn] browsers into buyers.”
A partner like Attentive, LoyPal, Klaviyo or SmartrMail can pull in multiple data sources to set up segments. For example, you could group together the customers who have purchased before and are interested in the same category – then send them a relevant offer.
“Leverage the data that you've got to tailor the message,” says Vibert. “Don’t just shoehorn email content into an SMS script. Even a little bit of personalisation will go a long way.”
“Clear, brief messages tend to perform well."
7. Ensure you meet content regulations
In the US and Canada, text message marketing content relating to SHAFT – sex, hate speech, alcohol, firearms and tobacco – is either entirely permitted, or requires an age-gate. See the CTIA Handbook for specific guidelines.
Content restrictions around topics such as alcohol vary across the globe. Wine merchants often fall foul of this because they simply do not realise they are contravening the rules, notes Vibert.
In Australia visit the Australia Communications and Media Authority (ACMA), and in the UK, see the Advertising Standards Authority (ASA).
8. Give customers the option to opt-out
Always ensure there is an option to unsubscribe at the end of your texts – across the world it’s mandatory to send an opt-out message upon sign-up. In subsequent texts, it’s widely considered best practice, and is a legal requirement in some jurisdictions. Check specific regulations with your SMS marketing provider.
“Aside from getting banned by the provider, [not giving customers the option to opt-out makes for] a bad customer experience,” says Julian Casson, co-founder of SmartrMail. “It's such a highly personalised channel. If you're invading people's space, it will be viewed very negatively.”
9. Set and forget with automation
Automated text messages can spur revenue growth by promoting flash sales and sending re-engagement messages and prompts following cart abandonment. It is preferable to run this in tandem with related email messages, but be mindful about a disjointed experience for the customer. SMS messaging can be particularly powerful for targeting customers who haven’t made a purchase for a long time (whereas an email is more likely to stay unread in the promotions folder).
However, it’s important to find the sweet spot in terms of frequency when setting up automated SMS campaigns; messaging too frequently will lower the open rate as customers begin to disengage.
“You probably don't want to send a SMS message more than once a week,” says Siegel. “If you push that further, you have to really understand the audience and be careful about your content strategy.”
"If you're invading people's space, it will be viewed very negatively.”
10. Allow for a two-way exchange
SMS was never meant to be a one-way channel. So, what happens if a customer writes back to your text, seeking more information on a product or deal? Your SMS provider platform will likely be equipped with basic features that let you text directly with customers. You could also consider implementing auto-reply keywords, which let customers receive more information by sending a one-word reply (for example, ‘Text DEAL for a discount code’ or ‘Text INSTA to check out our feed’.)
11. Think outside the box
While many merchants stick to sales promotions and order confirmations for SMS marketing, Australian online artwork retailer Bluethumb has utilised a more creative marketing strategy. Post-purchase, they send every buyer an SMS with a photo tile of the artwork they purchased, which can be shared on social media.
“With a couple of thumb clicks, the buyer can share it on their social sites: it’s quick and seamless and it plays to the strengths of SMS with a personalised message,” says Casson, who founded Bluethumb as well as SmartrMail. “The tiles are branded [with our logo], which drives awareness for Bluethumb. It’s been a game changer.”
What does the future hold for SMS marketing?
When Apple recently released the iOS 16 software update in the United States, it introduced a promotions tab for SMS, just like the promotions tab for emails.
As a result, are business SMSs more likely to be left unseen and unread? “It could make SMS marketing less effective,” notes Siegel. “However, that is not necessarily going to be the case. What we're seeing with email is that people are less likely to unsubscribe if the email stays in the promotions folder, because it isn’t annoying them every day. They can shop around in the promotion tab on their own accord.”
He adds that there is a lot of mileage for businesses who are doing SMS marketing right, and likens the current period of SMS marketing to the early days of online sponsored ads, which delivered huge sales for brands. He foresees SMS marketing campaigns becoming more sophisticated – with the possibility to even complete purchases via text – before saturation point is reached, and new mediums emerge.
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