Measuring SMS Marketing ROI With 6 Key Metrics

Measuring SMS Marketing ROI With 6 Key Metrics

Ever thought about how a simple text message could be a game-changer for your business? Amidst the whirlwind of digital marketing, SMS marketing is that often overlooked, direct, and personal companion ready to deliver your message right to your customer’s pocket.

But here’s the big question – is it worth your time and money? Enter ROI, or Return on Investment, our trusty yardstick of success. Getting to grips with your SMS marketing ROI isn’t just about tracking dollars—it’s about unearthing a treasure map for your business growth.

We’re diving deep into the SMS marketing ocean, unraveling the ROI enigma, and giving you practical, actionable tips to supercharge your returns.

1. Reply Rate: The Pulse of Engagement

Reply Rate is all about interaction. It tells you how many of your recipients respond to your text messages. Imagine it as a friendly chat you’re having with your customers. If they’re responding, they’re engaged. It’s a good sign that they’re interested in what you have to say.

What’s a Reasonable Reply Rate?

Reasonable Reply Rates can vary greatly depending on the industry and your text message’s specific call to action. However, as a ballpark figure, anything above a 10% reply rate is generally considered good. For every 100 messages you send out, at least 10 recipients are engaged enough to respond.

How to Improve Your Reply Rate

Engage with Questions: Customers are more likely to reply if there’s a question waiting for their response. For instance, if you run a bookstore, try: “Hey [Name], have you read the latest Stephen King novel yet?”

Personalize Your Messages: Use your customer’s name or reference their past purchases to make them feel seen and appreciated. For instance, “Hey [Name], we noticed you enjoyed ‘The Stand.’ You might like our new collection of horror novels.”

Time Your Messages Well: Discover when your audience is most active and receptive, and schedule your messages accordingly. No one wants a promotional message at 3 AM!

2. Delivery Rate: Reaching the Right Hands

The Delivery Rate of your SMS marketing campaign reflects how many of your messages successfully reach your customers. Imagine you’re sending out invitations to a special event at your store. If most of your invites never arrive, your turnout might be lower than you’d hope. The same applies to your text messages.

What’s a Good Delivery Rate?

You should aim for as close to 100% as possible. This might only sometimes be feasible due to invalid numbers or network issues, but a rate above 95% is considered healthy. This means almost all of your messages are reaching your intended audience.

How to Maximize Your Delivery Rate

Maintain a Healthy Contact List: Remove inactive or incorrect numbers regularly. This will ensure you’re using resources effectively on deliverable messages.

Choose a Reliable SMS Service Provider: Providers like OtterText can offer high delivery rates to ensure your messages reach their intended recipients.

3. Conversion Rate: From Messages to Sales

The Conversion Rate reflects the impact of your messages on your customers’ actions. Consider it as your words turning into profitable actions. For instance, you’re a restaurant owner sending messages about a new dish. Every time a customer orders that dish after receiving your SMS, that’s a successful conversion.

What’s a Reasonable Conversion Rate?

Performance can vary based on the industry and the offer presented. Retail sectors, for instance, can often expect SMS conversion rates of 1-3%. So, if you’re a boutique owner sending a message about a sale to 100 people, 1 to 3 purchases resulting from that message would be within expectations.

Enhancing Your Conversion Rate

Craft Persuasive CTAs: Make your call to action clear, urgent, and enticing. “Sign up now for a free trial” often works better than “Sign up for a trial.”

Simplify the Path to Action: If your CTA includes a link, ensure it leads straight to the action you want them to take, like a sign-up page or a product on sale.

4. Opt-out Rate: Keeping Your Audience Happy

The Opt-out Rate is a metric that indicates customer satisfaction with your messages. It’s like the audience’s feedback at a theater play. If people are leaving in the middle of the act, there’s something they’re not entirely happy with. In SMS marketing, keeping the opt-out rate low means your audience finds your messages valuable and wants to keep receiving them.

What’s a Reasonable Opt-out Rate?

A healthy Opt-out Rate should be as low as possible, with anything below 2% considered good. For every 1000 messages you send out, no more than 20 recipients choose to unsubscribe from your messaging service.

How to Reduce Your Opt-Out Rate

Respect Your Customer’s Inbox: Too many messages can irritate your customers and lead them to unsubscribe. Find a balance and stick to it.

Keep Messages Relevant: The more your messages align with your customers’ interests and needs, the less likely they are to opt-out. Segmenting your audience can be a great strategy here.

Make Opting-Out Easy: If opting out becomes a hassle, customers might mark your messages as spam, harming your sender’s reputation. Make sure the opt-out process is straightforward and simple.

5. List Growth Rate: Expanding Your Circle

Think of the List Growth Rate as your popularity gauge. It’s like watching the queue of people waiting to get into your new bakery grow longer day by day. If your subscriber list grows, your brand is gaining traction, and more people are interested in hearing from you.

What’s a Reasonable Growth Rate?

A reasonable growth rate is around 3-5% per month. This means your list of subscribers is consistently expanding, opening up new opportunities for engagement and conversions.

How to Grow Your List

Offer Exclusive Perks: Give people a reason to subscribe. Offering exclusive deals, discounts, or content to your subscribers can attract more sign-ups.

Promote Your SMS List: Use your website, social media platforms, and email newsletters to inform people about your SMS marketing and the benefits of subscribing.

Streamline the Sign-Up Process: Make it easy and fast to subscribe. A complicated sign-up process can deter potential subscribers.

6. Click-through Rate (CTR): Inviting Your Customers In

The Click-through Rate is the percentage of your audience interested in your messages and deciding to explore further. Picture it as a welcome sign at your store’s entrance. Every customer who walks through the door after seeing your sign is like a recipient clicking on the link in your text message.

What’s a Reasonable Click-through Rate (CTR)?

The Click-through Rate can also vary widely depending on the industry and the specific call to action. However, a CTR above 4% is generally considered strong in SMS marketing. For instance, if you’ve included a link to your new menu in a text message to 100 customers, at least 4 of them visiting your website from that link is a solid outcome.

How to Boost Your Click-Through Rate

Deliver Valuable Content: If the content on the other side of your link is useful, interesting, or exclusive, customers are likelier to click through.

Clear CTA: Guide your customers with clear instructions on what to do next. “Click here to check out our new summer collection!” can work wonders.


And that’s a wrap—the ultimate low-down to turbocharging your SMS marketing ROI. By understanding these crucial metrics and putting the shared strategies into play, you’re all set to tap into the untapped potential of this marketing dynamo. 

Why not take the next step in your SMS marketing journey right now? Try OtterText’s text messaging platform – it’s on us for 14 days

OtterText is tailored to empower you to measure your ROI and refine and improve your performance across different metrics. It’s equipped with features designed to help optimize your Reply Rate, maximize your Delivery Rate, improve your Conversion Rate, manage your Opt-out Rate, accelerate your List Growth Rate, and enhance your Click-through Rate.