SMS is celebrated as one of the most valuable and cost-effective tools for marketers to reach customers and prospects, especially since it has such high read and engagement rates. But how do you know you are getting the most out of your SMS marketing campaign?
You might have the makings of a great SMS marketing campaign, but you can only know it’s working if you measure it. By taking the time to study the right metrics, you can quickly see what’s working and change the things that aren't. And as you fine-tune your SMS campaign, you can enjoy a higher return on investment and, most importantly, better customer engagement.
Before you delve into the stats of your SMS campaign, it pays to revisit your objectives. After all, how can you know if it’s successful if you don’t know what success looks like? Perhaps you wanted to increase the number of subscribers, boost visits to your website or increase take-up of a particular discount or offer within a set campaign period.
Luckily, gauging your SMS marketing campaign’s performance isn't difficult – it comes down to four simple measurements. Whether you use one or all of them comes down to your goals:
1. Growth rate
Think of this as the snowball effect. This is the number of people who subscribe to your SMS marketing as a result of the campaigns you are sending – the “growth rate”. The easy way to work out your growth rate is to subtract the number of previous subscribers from the number of current subscribers. Then take the result and divide it by the number of previous subscribers.
2. Churn rate
It’s inevitable that when you send an SMS campaign to thousands of people, a certain number will decide to “opt out”. The percentage of subscribers you lose through your SMS campaign is the “churn rate” or “opt-out rate”. Simply take the number of subscribers that opt out and divide it by the total number of subscribers.
There will always be some people who opt out because they simply no longer require your brand’s services or products. But a high churn rate can indicate a number of problems in your campaign, such as poor audience targeting or irrelevant message content. By working out your churn rate for each campaign, you can see which messages are working and which aren't.
3. Redemption rate
The success of your SMS marketing campaign hinges on the number of subscribers who do what you want them to do – whether it’s to take up the offer, make an appointment, or visit your e-commerce site. By measuring the redemption rate, you can better understand which offers are engaging people and enticing them to act. If the message required action, you will have certain mechanisms in place to track the take-up, for example, a specific URL which allows you to measure how many recipients visited the website or a reply code to trigger a discount SMS for in-store/web use. Work out your redemption rate by dividing the number of subscribers that act by the total number of subscribers.
4. Cost per redeeming subscriber
How much are your subscribers costing you? Tracking how much you spend for each active redemption subscriber in your campaign will help you work out your return on investment per campaign. How does the redemption cost in one campaign compare to another? To work it out, take the cost of each delivered SMS message and divide it by the redemption rate (above).
How does your SMS marketing campaign measure up? Find out how to fine-tune its effectiveness and supercharge your ROI with more tips on SMS marketing. If you would like any advice on, or other ideas on how to leverage the power of SMS in your retail environment, contact Salmat’s MessageNet today.
Some of Australia’s largest retailers rely on us for their critical SMS communications, giving us the experience and insight to know what does and doesn't work – insight we are eager and happy to pass onto you.