ROI stands for “Return on Investment”. In other words, it refers to how much you get out of launching an SMS Campaign, vs how much you spent on it in the first place.
It is displayed as a percentage, calculated like this:
ROI = ((Revenue Generated – Costs Incurred)/ Campaign Cost) x 100 #
SMS campaigns can improve the ROI of your business’ overall marketing efforts. Generally, SMS Marketing is very cost-effective.
However, it is worth considering the ROI on each SMS campaign you run, as separate to your overall ROI, or your email campaigns’ ROI, for example. This is so that you know what works, and can reflect on this to improve the success of your future campaigns.
There are two elements to consider:
- Revenue Generated
The money you get back as a result of your campaign is obviously important in terms of gauging its success. However, it can be hard to differentiate where the money is coming from. This is especially true when you are employing lots of marketing techniques. For example, how can you understand which portion of your revenue results from email marketing, and which results from Social Media?
To differentiate revenue derived from SMS campaigns from your other endeavours:
- Use trackable links in your texts.
- Use unique promo codes in each text.
These techniques allow you to see where your customers have come from.
- Costs Incurred
This refers to:
- The costs of running the SMS campaign, including platform fees and messaging costs.
- The behind-the-scenes costs of your campaign, including expenses relating to content-creation, and data analysis.
So… How’s it going?
Want to know more about how your campaigns are doing? Read up on how to measure success:
- 7. What is A/B Testing?
- 14. ROI: What to expect from your SMS Campaigns
