Achieve successful conversion rates in SMS marketing

Studies show that SMS campaign conversion rates can be as high as 45 %. Learn how to increase your SMS conversion rate here.

In view of the upcoming DMEXCO trade fair, which will take place online for the first time in 2021 as DMEXCO @home on September 07 and 08 worldwide, dicomsys would like to introduce all interested parties the potential that can be gained from messaging campaigns when integrated into an omnichannel campaign.  As in previous years, our company will be taking part and is looking forward to targeted networking and an intensive exchange with the industry. This is where the entire community around digital marketing gathers. 

sms messaging Vorteile

Why you should give SMS marketing a chance

Successful marketing is demanding these days. Customer expectations are rising and the market is moving faster than ever before. There is always something new to try. Add to that the rising cost of customer acquisition (CAC; Customer Acquisition Cost).

It’s no wonder that digital advertising spending in Germany will reach $7.4 billion next year. 

Given the range of options, you’d think it’s never been easier to run great, revenue-generating marketing campaigns. The problem is that many companies are using the same digital marketing strategies, resulting in intense competition.

This is evident not only in rising CAC scores, but also in lower email marketing open rates, competition among paid media channels and people turning back to direct mail. If you want to increase your conversions, use other means. Instead, take advantage of SMS marketing’s extremely high click-through rates (CTR) and conversion rates. 

This article examines the conversion rates of SMS marketing campaigns based on third-party studies. It also looks at how you can build an SMS marketing strategy that maximizes conversions.

High click-through rate

Marketers note that click-through rates are over 35 %, which is far more than other channels. They also believe that an omnichannel campaign that incorporates SMS marketing performs better in terms of conversion.

There are no set rules for what constitutes a successful CTR. A successful CTR depends mainly on the goals that the particular company has set for itself. Every business will have their own requirements.

You may be satisfied with a single click that results in a single sale, as that sale covers your costs and meets your expectations for the SMS marketing campaign. Other clients may need a CTR of more than 1 % to generate enough leads that would subsequently lead to a decent increase in sales. It all depends on your business and the goals of your SMS campaign.

Research shows that SMS marketing has the highest hyperlink click-through rate (CTR) (6.16 %), compared to Email marketing (2.80 %), search engine advertising (1.98 %) and social media advertising (0.05 %) (source: Tatango and Signal). However, as with any marketing activity, the basis for success is a CTR that generates enough sales, conversions or leads.

What is the conversion rate for SMS marketing?

SMS have an average open rate of 98 %. So it’s surprising how little SMS is used by marketers. The high open rates, response rates that are 8 times higher than emails and click-through rates of over 35 % are impressive numbers.

A number of sources indicate that the average conversion rate for SMS marketing is 29 %. The average increase in conversions from SMS marketing is 156 %. The conversion rate for SMS is much higher than other digital marketing channels:

  • 3.26 % for email marketing
  • 3.17 % for Google Ads
  • 9.21 % for Facebook Ads 

The conversion rate of SMS marketing is 200 % higher than the next best marketing channel.

sms-marketing Kampagne

Opportunities for successful SMS campaigns

Customers want more customized offers. Limited sneakers, the latest personalized iPhone, a special edition of your product, etc. In order to satisfy customers directly with these requests and create a more personalized sales experience, you need a tool that opens this direct channel to your premium customers. “Time to consumer” plays a big role in such offers.

Reach your customers via SMS directly on their smartphone and send offers, discounts and promotions. Email newsletters often end up in the SPAM folder. In Germany, only 16 % of Email newsletters are actually opened. In contrast, the marketing SMS scores with the keywords “simple, fast and personal”. Nothing ensures a lot of attention and direct customer loyalty in such a short time and efficiently. Most newsletter subscribers do not want to read long Emails. They are happy to receive a short SMS in which you can integrate a link to your store, your social media channel or to a landing page to increase traffic there.

Keyword / Shortcode

Everybody knows the mechanics of keyword to shortcode from television of big brands like Coca-Cola, Ferrero or in gambling and voting. This solution works across all channels whether print, poster, TV or social media. Use it to support your social media campaigns, sweepstakes or couponing campaigns.

With a shortcode of five numbers, your brand is identifiable. Recognition is important in marketing and a shortcode is easy to enter. If you promote a shortcode within your campaign with posters, for example, you reach everyone who notices them and they can respond directly to your call. But this also works great in social media channels like Instagram or on TV. At the same time, you generate mobile numbers for your database. A marketing opt-in for further promotion to your customers provides direct access tailored to the target audience. In addition to print advertising or social media, placements on your products also offer great potential.

SMS couponing

Messaging is also optimal in couponing to generate reach. Your customers can easily have your coupons sent to them during such campaigns. SMS technology offers companies the convenience of not having to download additional software for your customers to participate in promotions. An SMS with an integrated shortlink activates the customer and provides a smart couponing experience with today’s wallet solutions.  

We are working here with the acardo group, one of the leading providers of mobile couponing in the retail sector on the German market. The company counts numerous major brands among its customers and is integrated into the checkout systems of many grocery stores and cinemas.

For example, if a person has loaded a coupon into their smartphone wallet via your promotion, the GPS function in the wallet will display the coupon directly on the smartphone’s home screen when the customer enters your store. This is a very smart feature that adds real value for the customer. The customer does not forget their coupon while shopping and for you, targeted sales increase. This functionality can be best exploited with high reach “keyword to shortcode” campaigns.

Below are statistics and factors that make SMS marketing the most useful and effective marketing channel.

Independent studies found that

34%

of consumers would prefer to receive vouchers and coupons directly on their smartphones. One of the channels to make this possible is SMS. 

With a click-through rate of

36%

it achieves significantly more attention for your coupons than any other channel.

6-8-times

higher “engagement rates” can SMS achieve than standard email marketing.

90

seconds is the typical response time for an SMS, compared to 2.5 days for an email.

150-times

a day a person looks at their smartphone

How to increase your SMS conversion rate

In a world where people spend an average of 3.7 hours a day on their cell phones and 8.9 billion SMS were still sent daily in Germany in 2018, your mobile marketing strategy should include SMS marketing. Here are two tips on how to convert more SMS recipients.

1. Include a clear call to action (CTA)

sms-messaging call to cation

Even though text messages are short, you need to quickly and clearly tell the recipient what to do. The call to action should be immediately apparent to the recipient. No elaborate puns or unnecessary words are needed here.

Most cell phones only display the first few words of a text message in the smartphone’s messaging app. This means that it’s important to convey what the text message is about in the very first sentence. Otherwise, you risk your customer deleting the message before they even read it.

2. Personalize your message

sms personalizised

As a marketer, you know that personalization is important. A study by Marketing Charts found that visitors who saw three pages of personalized content were twice as likely to convert as visitors who saw only two pages of personalized elements. 

While personalizing web content and landing pages can be a complicated undertaking, it’s not hard to send personalized copy. A lifestyle brand may choose to address customers by their first name, while a financial services company may want to use title and last name for a more professional look.

Finally, two arguments to choose an SMS campaign over an Email campaign:

Quality over quantity

SMS messages have to stick to a word limit and leave space only for the essentials, while Email messages tend to contain irrelevant information that might bore the customer. SMS campaigns can keep the customer coming back to purchase / return with about 4 text messages per month. With Email campaigns, there is no set limit and the more emails you send, the more likely a customer is to read them.

Costs

SMS campaigns are more expensive when you consider the cost per message, but you save the costs associated with creating Email campaigns. Email campaigns require creativity and design. They need to be compatible with all Email clients. With SMS messages that are only 160 characters long, you can reach your audience much more cost-effectively. And you don’t send such many of SMS messages, as you can get more attention with just one SMS than with 20 Emails. 

How we can help

If you’re struggling with low conversion rates on Emails and digital advertising channels, it’s time to give SMS marketing a try. 

dicomsys is a cloud-based messaging platform provider. As an enterprise messaging solution provider, we offer our B2B customers a carrier-grade messaging platform and thus access to mobile network operators worldwide. There are several ways to leverage the conversion rates of SMS. We will gladly consult you individually and competently. Make sure your text messages include a clear CTA and personalize your SMS to find out what works and what doesn’t. This way you can get the highest possible ROI for your SMS campaigns. Through our messaging platform, our customers’ SMS find their way to their recipients’ mobile devices in the fastest and most secure way. We help companies achieve efficiency through automation using intelligent messaging solutions and turn communication into measurable revenue.