SMS Marketing Explained

What is SMS?

SMS (Short Message Service) also known as text messaging, is a service for sending short messages of up to 160 characters to mobile devices.

SMS messages are sent through a phone’s native messaging app and, unlike push notifications, can reach any user who has opted in to receive them. Push notifications, on the other hand, require previous installation of an app and previous opt-in from users.

Virtually every mobile phone today has support for SMS text messages, but not every mobile phone supports push notifications.

What is MMS?

MMS, or Multimedia Messaging Service, include GIFs or photos in text messages to drive higher mobile engagement. Adding visuals can make text messages more appealing to customers. In fact, industry average click-through rates for MMS are 15%+ higher than standard text messages. Learn more about the difference between MMS and SMS.

What is SMS Marketing?

SMS marketing is a strategy that uses SMS messages to communicate with consumers and promote products or services. This powerful approach takes advantage of the widespread use of mobile phones to reach customers directly and effectively. SMS messages are short and concise, offering valuable information or encouraging immediate action.

Why SMS Marketing?

SMS messages are a great way to quickly communicate information to customers. Billions of people across the globe use SMS, and it is trusted as an effective marketing channel. Here’s why it’s become an essential part of modern marketing strategies.

• High Open Rates: The success of SMS marketing is undeniable with consumers on their phones for a good portion of the day. SMS messages don’t get caught in spam filters, forgotten in an inbox or lost somewhere in the mail. In fact, studies have shown that 98% of SMS messages are opened, and 90% are read within three minutes. These studies also show that 68% of consumers say they check their messages regularly throughout the day.
• Cost-Effective: SMS marketing is often more affordable than traditional advertising methods and, as a result, offers a high return on investment for businesses.
• Suitable for Many Businesses: SMS text marketing services can be tailored to suit any business model or customer base, no matter the size of your company.
• Loyalty-Building: Regular, personalized messages help create a strong connection between brands and consumers, which can encourage repeat business and brand advocacy.
• Channel Integration: SMS marketing integrates seamlessly with email, social media and other marketing methods to support a cohesive multi-channel strategy. For example, you could announce a sale on social media and use SMS to remind recipients to take a look.
• Revenue-Driving: With high engagement rates and the ability to send time-sensitive offers, SMS marketing can directly impact sales and boost your revenue.
• High Response Rates: In addition to high open rates, SMS messages also typically generate high response rates. Because these messages are more personal, people are more likely to respond. Whether it’s replying to a survey, claiming a discount code or making a purchase, customers are more likely to engage with SMS prompts than other marketing channels.

Customer Convenience

SMS marketing’s high engagement rates are, in part, due to its convenience:

1. No App Download Required: There are no App Stores to scroll through to download an SMS messaging service. SMS is native to all mobile devices.
2. Accessibility: With lock screen or badge notifications, SMS messages are typically seen immediately, and customers know where and how to act on them.
3. Real-Time: Text messages can be scheduled and delivered in real-time, which is critical  for customers who seek updates or vital information, like flight or order details.
4. Right Time: SMS enables timely communication. You can identify when SMS marketing works best for your brand so you can deliver your messages when they’re most relevant and convenient for your customers.

SMS messaging is most effective when it’s concise and useful. For example:

• Alerts that an order was received or a package was delivered.
• Notifications for activities on a credit card or balance alerts.
• Flight check-in, change and connection information — including the delivery of a mobile wallet boarding pass.

SMS messaging can also be used for:

• Promotional Messages: Amplify sales, reminders or links to purchase items left in a shopping cart to encourage immediate action.
• Channel Acquisition: Deliver loyalty cards, coupons or app download links.
• Authentication: Provide seamless authentication and sign-in to accounts.
• Reviews: Prompt customers to share their experiences after a purchase or company interaction.
• Service Updates: Keep customers informed about changes to their accounts, subscriptions or upcoming appointments.

SMS Compliance

Implementing a successful SMS advertising campaign involves more than just creating captivating messages. It’s crucial to understand and follow the legal requirements that govern SMS communications. Compliance isn’t just about avoiding legal fees; it’s about building trust with your audience and maintaining a positive brand reputation. Here are some SMS marketing best practices to consider.

TCPA and Other Compliance Considerations

Before implementing a successful SMS marketing strategy, you must understand SMS laws. In the US, for example, SMS is regulated under the Telephone Consumer Protection Act of 1991, or TCPA, created to protect consumer privacy. Whereas in Europe, SMS marketing falls under the General Data Protection Regulation (GDPR) and the ePrivacy Directive.

Other countries have specific laws that regulate SMS as well.

If you want to take your SMS marketing strategy abroad, read up on how to implement a successful international SMS strategy.

Opt-In / Opt-Out Management

The TCPA requires companies to present potential customers with an express opt-in so they aren’t spammed with unwanted SMS messages at all hours of the day. Companies must receive consent before engaging in SMS messaging, or they will face significant fines.

Opt-in and opt-out records and reporting make it easy to manage compliance with applicable SMS regulations. Brands can work with an SMS text marketing service vendor like Airship to maintain an opt-in and opt-out database that:

• Is segregated from campaign content
• Tracks both opt-in and opt-out dates and deactivated numbers, and maintains this information for four years 
• Supports data subject rights under GDPR

Brands should always consult with their legal/compliance departments to choose the best way to secure the consent necessary to send SMS and MMS messages.

For opt-ins, Airship technology supports:

• Double opt-in via mobile phone opt-in
• Double opt-in for non-mobile phone opt-in
• Brand-managed opt-in via an API
• Opt-in owned by a brand and uploaded to a provider via CSV

For opt-outs, Airship technology supports:

• A mobile device-originated opt-out request: When a consumer texts the brand with a keyword like STOP.
• An opt-out via website or app: If a consumer changes their preferences in a Preference Center — or in some other way via the brand’s website or app.
• A carrier deactivation handling: Mobile network operators (like AT&T, Verizon, etc.) provide a list of deactivated phone numbers on a daily basis. These numbers should be automatically uninstalled (and removed from the database entirely), so brands don’t inadvertently message the wrong person if that number gets reassigned.

It is a best practice not to send messages to numbers that have opt-out dates associated with them. If a consumer opts out but then decides to opt in again, the “double opt-in” or “brand-managed opt-in” methods described above will register a new opt-in date.

How Does SMS Messaging Work?

Brands register a short code or long code to get started with SMS.

A short code is a phone number that’s only five to six digits long. Short codes are best suited for marketing messages and can be customized for a particular brand.

A long code is also a phone number, it’s ten digits long. One benefit of utilizing a long code is a shorter time to market for brands.

Some brands use shared short codes, which is not considered a best practice. Read more about why shared short codes can be problematic for brands and customers.

To understand the nuts and bolts, brands need an interface for writing, targeting and sending messages. Automated messages can also be set up to be sent via an API. Brands can build this infrastructure in-house or hire a vendor, such as Airship, to provide this service.

SMS Vendors

Some brands are able to conduct an SMS marketing campaign in-house. For brands that don’t have the capability or manpower to do so, there are many companies out there eager to help.

SMS platform vendors vary in the features they offer. Some vendors only offer text messaging, and their features range from basic to robust. The best SMS marketing service vendors, like Airship, offer full-featured, integrated SMS messaging — either standalone or as part of a multichannel customer engagement strategy.

Learn more about what it means to partner with a Tier 1 SMS vendor.

Full-featured platform vendors can provide capabilities such as:

• Message creation and preview
• Campaign management
• Scheduling & deployment
• Link shortening and tracking
• APIs
• Reporting
• Opt-in/Opt-out database and management
• Unique keyword responses
• Personalization, including merge fields and Dynamic Content
• Automation

Vendors with platforms that integrate SMS can also offer an automated channel selection that helps brands use SMS only when it is the best choice. This includes automated options for using it only as a “fall back” channel to less expensive channels like push notifications.

Content Is Key

Full implementation of an SMS campaign can take up to twelve weeks, so it’s best to plan ahead — and plan well.

Before jumping into a new text messaging campaign, brands should think about the kind of content they want to present to capture and retain new customers. Here are some important factors to consider when creating SMS content:

• Message Type: Decide whether your text message is transactional or promotional.
• Audience: Identify key customer groups and categorize them according to characteristics or traits to determine how many SMS variants are needed.
• Personalization: Add unique values through merge fields via CSV upload or with dynamic content.
• Timing: Determine whether to send messages immediately or schedule them for later.
• A/B Testing: Uan use A/B testing to measure each campaign’s success and tailor future SMS messages.
• Copy: SMS has a character limit, so every word counts. Make sure your message is straightforward, easy to understand and includes necessary information like the company name, the offer or promotion, opt-in conditions and a strong CTA.
• Frequency: Don’t overwhelm your audience with too many messages. Find the right balance between staying top of mind and avoiding message fatigue.
• Brand Positioning: Always make it clear who the message is from. Include your company’s name at the start of the message so your recipients immediately recognize the sender.

User Activation

Once a campaign is up and running, users can then opt in to receive SMS notifications using keywords:

• Users typically text a keyword to join an SMS marketing program. The most common keyword brands use is “JOIN”.
• When users receive SMS messages, they can interact with it by clicking links or texting keywords back to the brand to trigger automated messaging. For example, a user could text the word “BALANCE” to their bank to get their current balance or “SALE” to a retail store to get the latest coupon.
• SMS messaging can even be triggered by location or time of day. These prompts spark action around simple decisions like what to do over the weekend or what to eat for lunch  and, in turn, lead to the most ambitious brands securing new customers or creating loyalty around unique, limited events or coupons.

SMS Marketing Strategies

SMS messages provide a direct path of communication to users who are native to their mobile phones. Brands must be vigilant in providing value to users through this channel. Otherwise, it’s very easy for users to opt out.

Messaging tactics should be measured and tested. Strategies such as maximizing opt-in rates and ensuring new users are properly onboarded are a few routes to success. Other strategies include:

• Only sending SMS messages that make sense for each user
• Using SMS messaging as a coordinated part of an overall customer experience strategy — i.e., using push notifications, email and in-app messaging as complementary channels. Take a look at these 6 ways to drive app user engagement leveraging SMS and email. 

Typical use cases:

• Onboarding: Delivering transactional emails with CTAs to opt in to SMS for promotional messages. This allows for frictionless logins with account authentication via SMS.
• Welcome Series: Welcoming new SMS opt-ins with promotions and sales.
• Cross-channel: Using SMS to drive the acquisition of new customers to a mobile app with a click to download a link.
• Win Back: Using in-app messaging and email to deliver special promotions to customers via SMS opt-in.
• Transactional: Delivering mobile wallet coupons via SMS for easy downloading.
• Loyalty: Continuing engagement by delivering mobile wallet loyalty cards via SMS.
• Cross-Sell & Upsell: Driving SMS opt-ins via email receipts and upgrades or purchases of similar products.
• Repurchase: Updating customers via SMS of sales and promotions of their favorite products to drive repurchases.
• Text to Win Contests: Engaging customers with interactive SMS campaigns where they can participate in contests by texting a specific keyword.
• Exclusive Offers: Providing SMS subscribers with discounts or early access to new products to create a sense of exclusivity.
• Text Payments: Facilitating secure transactions through SMS, allowing customers to make purchases or donations directly via text message.

An effective SMS text marketing service vendor, like Airship, can help you implement these strategies and ensure your messages are timely, relevant and compliant with regulations. You can read more about SMS marketing benefits and strategies.

Tracking SMS Campaign Results

Measuring the success of your SMS marketing campaigns is crucial for improving your strategy and maximizing ROI. To effectively track your SMS campaign results, focus on KPIs that provide meaningful insight into your campaign’s performance.

One of the primary metrics to monitor is the delivery rate, which shows the percentage of messages successfully sent to your customers. The open rate is equally important, as it shows you how many recipients actually opened your message. While SMS typically has high open rates compared to other marketing channels, tracking the metric can help you understand how engaging your message is.

Click-through rate is an important KPI for SMS messages that include links. This metric shows how many recipients took action by clicking on the link you sent. A high click-through rate suggests your content is captivating and relevant to your audience.

Tracking the unsubscribe rate is also vital for maintaining a healthy subscriber list. A spike in unsubscribers might mean you need to adjust your messaging frequency or content.

Perhaps the most crucial metric you can track is the revenue your SMS campaigns generate. Tracking revenue directly links your SMS marketing efforts to business outcomes, whether through sales from SMS-exclusive promotions or other conversion actions.

Frequently Asked Questions

Is it Illegal to Use SMS Marketing?

SMS marketing is not illegal when done correctly. However, it must comply with regulations such as the TCPA in the United States and similar laws in other countries. To follow these laws, you need explicit consent. Subscribers must choose to opt in to receive your text messages. You also need to provide a simple way to opt out. Typically, subscribers can reply with “STOP” or “UNSUBSCRIBE” to remove themselves from your list. Make sure to include opt-out instructions in your initial text message.

Does SMS Marketing Work?

Yes, SMS marketing can be highly effective. It has impressive open rates of over 95% and quicker response times than many other marketing channels. SMS messages are direct, personal and easily accessible to customers, making them great for time-sensitive offers, reminders and important updates. Remember to keep your messages relevant and have a good sending cadence so you don’t overwhelm your recipients.

How Much Do SMS Messages Cost?

SMS marketing pricing will largely depend on the SMS text marketing service vendor you choose and the number of messages sent. Typically, prices range from $0.01 to $0.05 per message for bulk services. There may also be additional costs, such as setup fees or advanced features like automation and analytics. Learn more about Airship’s SMS marketing services and request a demo here.

What Are The Risks of SMS Marketing?

1. Compliance Issues: Failure to follow regulations like TPCA can lead to expensive fines.
2. Message Fatigue: Sending too many messages or irrelevant content can damage your brand reputation and cause recipients to opt out.
3. Privacy Concerns: Mishandling customer data or experiencing a data breach can ruin trust and potentially lead to legal problems.
4. Delivery Problems: Technical issues or using unreliable SMS text marketing services can prevent messages from reaching your audience.
5. Limited Characters: The 160-character limit can make it difficult to convey your message, which can lead to miscommunication or incomplete messaging. 

To mitigate these risks, it’s important to work with a reputable SMS marketing service vendor, follow regulations, respect customer preferences and continue to monitor and improve your campaigns.

For More About SMS Marketing, Check Out These Resources:

• 8 MMS Marketing Best Practices
• What You Need to Know to Create a Global SMS Strategy
• 10 Tips for Successful Text Campaigns
• Get the Timing Just Right with Automation For SMS and Email
  

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Want to learn more about how SMS marketing can help you connect with customers at each stage of the customer lifecycle?

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