The exact Return on Investment (ROI) of your campaign will vary, depending on the industry you’re in, the size of your subscriber list, and the price of your products. However, the good news is that the costs incurred by SMS campaigns are manageable: SMS generally offers fantastic ROI for a few reasons:
⚡ SMS marketing creates lifetime value by nurturing relationships with customers, long-term, giving you a strong and supportive customer base.
⚡ Texts go straight to a customer’s phone, unlike other marketing comms, so you don’t have to fight algorithms and email inbox noise in order to reach them.
⚡ A successful text often generates instant results, such as clicks, purchases, and conversions.
When measuring the ROI of a campaign, you should consider:
- Cost-per message – How much does it cost to send each text? This includes on-costs relating to creating and sending the campaign, and the costs of utilising Klaviyo/Voodoo.
2. Conversion rates – How many recipients are taking the desired action after receiving your text? This metric is crucial: if people aren’t acting on your Calls to Action, then they’re not working, and you need to know that, in order to improve. You can measure conversion rates using trackable links, response rates, and unique prom0-code usage. Then complete the following sum:
Conversion rate = (No. People Converted / No. Messages Sent) X 100
3. Customer Lifetime Value – CLV refers to the profit your business can expect to generate through an ongoing relationship with a customer. Thinking about CLV enables you to consider the long-term impact of your marketing strategies, as well as the immediate success.
CLV= (Average Value of Sale) x (Average Number of Transactions) x (Average Customer Life Span)
4. Click Through Rate – CTR measures the effectiveness of the links and Calls to Action included in your texts.
CTR – (No. Clicks / No. Recipients) X 100
It’s hard to say, numerically, what a good CTR is, because it is largely dependent on the industry you’re in. However, at present, good CTR for eCommerce is 2.69%, though this number is subject to change.
4. Opt-Out Rate – How many Opt-outs are you receiving after launching a campaign? Thinking about the negative responses, as well as the positive, can help you to reflect on its success in comparison to other methods and campaigns.
OOR = (No. Unsubscribers / No. Recipients) x 100
Compare and Contrast
Once you have measured these factors, it’s time to interpret and analyse them. You can then use the results to learn and grow. You may wish to compare and contrast the results from this particular SMS campaign, with previous SMS campaigns. Has the ROI increased, or decreased? Which areas are particularly reflecting a decrease?
Another option is to run an A/B Test , so that you can compare and contrast the results of specific SMS techniques at the same time.
Whatever you do, keep records of it, so that you can evaluate results again, in the future.
Want to know more?
Zap has a breadth of articles to help you get the most out of your campaigns. If you want more information on ROI, check out:
