How SMS Marketing Works

Boomer Elmsdale

How SMS Marketing Works

Everyone has a cell phone these days, and many people don’t leave their homes without it. So if a company wants to reach someone, direct access to their cell phone is one of the best ways to do so. Messages sent from marketers reach a person instantaneously. They communicate sales, information about new products, new services and more. It’s more effective than phone calls, which are still part of marketing campaigns everywhere, because you don’t have to get someone to listen in order to make your pitch. Instead, it’s all laid out in front of the customer for them to see.

What is SMS Marketing?

SMS marketing refers to short message service marketing, or text messages sent to cellular phones. In general, these messages are permission-based, meaning a person opted in to receive messages from a company by using a short access code to prompt messaging. At any time they can opt-out, which makes messaging practices important, but it also means the audience that does exist is engaged. They have expressed an interest in the company already so they don’t have to be sold on that.

There are many ways to acquire new customers for SMS marketing. Sometimes it’s as simple as customers clicking a box on their enrollment form. Cell phone companies often use text messages to communicate bill payments and statement dates to customers, which is a convenience factor for many. They then can use the same form of communication to inform existing customers of new products and services.

Perhaps one of the most popular forms of customer acquisition for SMS marketing today occurs while you are shopping. You’ve likely read a sign on a product you are looking at that says to text a short code to a short number in order to receive a coupon. The ability to instantly save money is a huge draw for the tech-savvy customer. And after they receive the discount, companies can continue to use SMS messaging to communicate new coupons, deals, products and other information to them.

Sending polls and surveys through SMS messages is another useful tool for companies. People thrive on convenience and they may answer your text questions as they have time throughout the day. The surveys are easily accessible, after all, when they sit in the palm of your customer’s hand.

Many companies use professional SMS marketing firms to handle operations. These companies are pros at what they do and can promise better strategy and return on investment. Larger companies might have an SMS marketing team built right into their company.

What is SMS Spam

SMS spam refers to junk message delivered to a mobile phone as text messages. It is equivalent to email spam and is more common in other countries. In the U.S. SMS spam makes up approximately 1 percent of all text messages sent. In most cases, people did not opt into these subscriptions, and if they did, it likely wasn’t intentional.


Measuring ROI on SMS messaging can be tricky. Some anecdotal information helps companies see the benefits of SMS marketing. For example, one large broadcasting and telecommunications company reduced inbound support calls by 20 percent after initiating a series of customer service SMS campaigns, including communicating service appointment reminders, bill due notices, service maintenance/outage alerts and more. Less support calls leads to less support staff hours, which leads to a savings for the company.

A large U.S. retailer started an in-store SMS mobile marketing campaign and grew their marketing database by more than 250,000 in three months. The campaign also generated $2.3 million in sales.

Tracking ROI has advanced some in the past few years as SMS marketing has taken off, allowing for reliable, individualized data for campaigns. It all comes down to cost versus revenue so keep track on what is spent on implementing SMS marketing. That includes extra hours and staff, hiring a service to handle SMS marketing and customer acquisition costs.

By using the coupon codes mentioned above, companies can track the success of individual campaigns. As long as the codes are unique, it’s easy to see which ones generated which sales. It is also possible to track subscribers. A lot of the tracking can be done through Google Analytics, but if you hire a company to handle SMS marketing for you, make sure to ask about their ROI numbers and the tracking system they use.

ReachMobile has created an online calculator to make tracking SMS easy for every user, especially those who decide to go it alone.

Calls to Action for SMS Marketing

A call to action is what you are asking the customer to do. What is the end goal? We touched on a few of these already, so let’s break it down. If a sign in a retail store tells a customer that by texting a code to a specific number you will receive a 20 percent off coupon for that product, then the call to action is texting the number. Essentially, the company is asking you to subscribe. As far as building a customer base, asking for subscriptions is a common call to action.

If you have an appointment to get your oil changed, go to the doctor or have maintenance done on your home, a company may use an automated text message to confirm appointments. In these cases the call to action is appointment confirmation. By replying “YES,” your appointment is confirmed and the company just saved time and money by not calling you with a reminder. The compant will also save money on missed appointments if the reminder reminds you that you won’t be able to make it. In these cases, the call to action is confirming your appointment.

When thinking about your call to action, consider what it should do. Calls to action should get a customer’s attention, opt a person into a campaign and provide an offer that gives value to the customer (i.e. the coupon codes we mentioned earlier).

Other effective campaigns include collecting donations (think Red Cross text-to-donate campaigns after a natural disaster), talent acquisition, voting platforms, contests and competitions and surveys.

Building an SMS marketing list

Because SMS marketing is routinely opt-in only, building a list means you need to entice customers to subscribe by offering something of value. The value can be monetary, such as coupon codes, or convenience-oriented, including free recipes and other non-monetary perks for customers such as being updated about a product or service, being sent bill notifications for accounts, etc. Regardless of the specifics, your offer has to be good enough to get people to text in, or click a button opting into the service on a webpage somewhere. This will build your list.