The ROI of SMS

Text messaging or SMS, continues to mature in the enterprise to person (E2P) engagement space.  With demand on the rise and businesses becoming more aware of the need to take action, the conversations at CMO, CIO & CTO events have evolved from trying to understand the basics of mobile messaging to asking about best practices and ROI.

Best practices have been easier to come by since we’ve seen how some of the largest global brands are using SMS – companies like Amazon, Apple, Bank of America, Walmart, Google, Facebook, Kroger… it’s probably a shorter list to name a Fortune 500 company that’s not using SMS.

Measuring ROI has been a bigger challenge.  E2P engagement has only really taken off in the last two years so there isn’t much data yet and leading companies aren’t eager to share what they still feel is a competitive advantage.  My usual reply when asked about ROI is to remind executives that if their business isn’t using SMS, then they’re falling behind their competitors and not addressing the needs and preferences of their customers.  Additionally, SMS represents the most widely used form of written communication the human race has ever known!  This means anyone you want to interact with already has this capability in their pocket and for many it’s their preferred method of communication.  Clearly, it’s the channel of choice for Millennials.  But, fair enough, some hard numbers for validation are always appreciated.

I have collected some information below to help show the positive business outcome or ROI of SMS.

  • A large broadcasting and telecommunications company reduced inbound support calls by 20% by initiating a series of customer service SMS campaigns (service appointment reminders, bill due notices, service maintenance/outage alerts, etc.)
  • A large US retailer started an in store SMS mobile marketing campaign and in three months:
    • Grew their marketing database by more than 250,000
    • Generated $2.3M in sales from their campaign
  • A top retailer for educational and learning resources found their SMS campaigns had a 5 to 1 higher conversion rate compared to their email campaigns
  • NHS England instituted an outpatient communications program utilizing SMS to remind patients about upcoming appointments and they reduced their ‘did not attend’ rate by over 29%
  • Time Warner used text messages to boost late bill collections by 49%
  • Jack In The Box SMS coupon redemption rates were 3-5 times higher than their email coupons
  • Kiehl’s initiated an SMS marketing campaign and saw over 73% of their opted-in customers make a purchase as a result of receiving SMS product alerts, and 81% filled out a survey to provide the brand with valuable feedback.

I’ll continue to troll the companies that are leading the charge in SMS E2P engagement and will happy to share what I find.  In the meantime, here’s a good read from Mobile Marketer.

If you have results to share I’d love to hear from you!