It is no secret that SMS marketing works well. Text messages can be one of the most effective ways to reach out to customers to grow your e-commerce business. With various sources reporting SMS open rates at 98% and response rates at 45%, it is more targeted and efficient than any other form of marketing.
SMS is an underused tool that should be utilized by e-commerce marketers. Now, I know what you might be thinking, SMS, isn’t it a thing of the past? And the answer is no, SMS marketing seems to be actually making a comeback.
In 2011, SMS usage in the US was at its highest, when an estimated 2.3 trillion messages were sent. Between 2012 and 2017, SMS usage experienced a continuous decline. But now, 10 years later in 2021, 2.2 trillion SMS messages were sent again, indicating that text messaging is gaining popularity again.
This article explains what SMS marketing is and explores ways to use it to maximize your e-commerce revenues, increasing traffic and conversion rates.
SMS marketing is making a comeback
The Covid-19 pandemic has transformed the way customers communicate with brands. Consumer behavior has changed, people now expect a more personal and conversational experience, and SMS is the perfect solution.
According to one research from 2020, customers used text messaging nearly to the same extent as they did Facebook Messenger, with 47% vs 51% respectively.
What is more, the generational divide and how customers in different age groups contact consumer companies is changing? In 2021, only 17% of Millennials were using text messaging to communicate with brands. Interestingly Gen-Z uses text messages more than Millennials, to the same extent as Baby Boomers – 22% of them.
For example, NotPot, a D2C brand, maker of flavored CBD gummies, announced in 2020 that they would be ceasing all email communications in favor of an SMS-only approach. It seems like several smaller D2C brands are now innovating through messaging strategy now.
There are several positives to SMS. A solid SMS marketing strategy allows you to connect with your customers instantly, even if they don’t own a smartphone or have WiFi connectivity, making it the most accessible means of communication worldwide.
What is SMS marketing?
First of all, let’s explain what SMS abbreviation means.
SMS stands for a “short message service” and MMS stands for “multimedia messaging service”. The main difference being, that whereas SMS only includes text, MMS can contain imagery, GIFs or short video content. SMS is usually 160 characters long, however, most networks allow larger messages, combined of several 160 character texts.
SMS marketing is a great way to contact your audience through personalized and targeted texts. SMS marketing is traditionally utilized by retailers and e-commerce stores to communicate with customers about promotions, discount offers, product updates, exclusive offers, delivery updates or even for customer service.
You can have complete control over who receives your messages. However, in order to leverage SMS marketing, you have to gather a list of contacts / phone numbers. The best way to do this is through email, for example offering incentives like a discount voucher in exchange for a phone number.
Compared to social media, SMS marketing can be very effective for short-term sales uplift, due to its more personalized and targeted nature.
SMS and mobile usage key statistics and benefits
- People use their phones a crazy amount – on average – people check their phones 160 times a day.
- Currently, 294 million people use smartphones, while a whopping 7.1 billion have mobile phones!
- Regardless of the age group, text message marketing can be an extremely effective way to reach customers and convert customers and drive revenue.
- Due to its high open and engagement rates, it is extremely effective with a high ROI.
- On average, people spend 6 hours a day on their phones.
- 92% of Americans can 3min after being received, 75% prefer text over any other communication channel.
- 80% of traffic comes from mobile (mobile commerce), 20% from desktop sales.
- Content can get lost on social media and isn’t as targeted.
Cost of SMS marketing
The prices for SMS marketing vary depending on the countries between which you are sending them, and the volumes. Meaning, the higher the volume, the lower the cost.
And even though SMS marketing may seem like a more expensive option compared to email marketing at first, its effectiveness counteracts the money spent. As SMS is highly targeted, with open rates at 98% and engagement rates at around 45%, the ROI is very good.
The prices can start at as low as $0.022 per message sent, and be as high as $0.054 per message sent. For example, if you are based in the US, sending SMS messages to your customers within the US is much cheaper than sending them to your customers in Australia.
E-commerce vs SMS conversion rate
Before we continue with some examples of how to leverage SMS marketing to increase your webshop traffic and conversion rates, let’s explain the most important KPIs, e-commerce conversion rate, and SMS conversion rate.
E-commerce conversion rate is a percentage of visitors to your webshop who make a purchase. Meaning, not only landing on your website but also buying something and becoming a paying customer.
Generally, the average e-commerce conversion rate is around 2%. However, it changes depending on the products you are selling. For example, naturally, customers convert less if you are selling higher-priced items like laptops or phones, as it takes more decisions.
The SMS conversion rate on the other hand reflects the average sales increase that came specifically from SMS marketing campaigns. Calculating it gives an indication of how successful your marketing efforts have been. According to one research, the conversion rates of SMS campaigns can be as high as 13%.
In order to calculate this metric, you have to compare the overall conversion rate before and after launching your SMS campaign. You can also track how many SMS messages in a campaign resulted in a sale.
But, it is important not to confuse and compare the two KPIs directly. Each holds a different meaning and purpose, which is why 2% vs 13% seem as extremely different conversion rates.
Best ways to drive e-commerce traffic and conversions through SMS marketing
SMS marketing in e-commerce is mostly used for campaigns to have a short-term sales uplift, but it can also help to create a more personal connection with the customer, having a direct impact on customer retention and loyalty rates.
Here, we will talk about different ways to use SMS messages in order to increase traffic and conversions, as well as bring some examples. The best ways to increase traffic include promotions, offers, discounts, or anything that can increase sales, for example sending abandoned cart notifications.
Buy-one-get-one-free or buy-one-get-one-half price offers are proven to be effective in driving sales. Research shows that 66% of consumers take advantage of these. You should schedule your BOGO offers especially before the holiday season.
You as a retailer can benefit from increased sales, shifting slow-moving stock or stock with higher mark-up, or getting rid of seasonal products, for example, Christmas items. BOGO deals are also popular for and Black Friday campaigns. This type is used more for lower-priced items that can be a much easier giveaway.
For example, Kylie Cosmetics’ Halloween SMS campaign. They offer a free gift if the customer spends a certain amount on their products, only on Halloween, creating urgency and encouraging sales.
Discount offers, exclusive offers
As opposed to BOGO deals, discount offers encourage customers to make a purchase by offering them a set % or a set amount discount off the next purchase. For example, offer a 50% discount, or a $5 dollars off voucher or code with the next purchase.
By using codes like “5OFF” you can include these in your SMS campaign messages. These are usually also limited-time offers to create urgency.
For example, furniture retailer CB2 uses text messages to send out “text exclusive” offers to its subscribers, offering a 15% discount on full-priced items.
Personalize your messages
To drive conversions, personalize your texts. Simply adding your customer’s name can have a positive impact. Customers now want personalization in their shopping experience, with 80% more likely to purchase if a brand provides a customized experience, according to research by Epsilon.
So, tailor your messages as much as possible. You can either adjust your messages and add your customer’s name, or tailor the discount offer based on their purchase history.
If you address your subscribers by their names, you can create closer customer relationships. Even though it may not seem like a huge thing, if you think about it from your own personal perspective, receiving something targeted is always nicer, right?
Always include a clear call-to-action (CTA)
Including a clear call to action will help to drive more traffic to your website, so make sure to always add one and be straight on what you are offering. Around 30% of recipients react to CTAs in SMS messages, over 45% end up purchasing.
A call to action can also be a part of the discount offer or a BOGO offer. For example, “get 50% off, when purchasing in the next 24h” creates both urgency, as well as adds a clear action point.
Schedule your messages
Timing is everything, it makes sense to automate and time when your campaigns go live. This will avoid missed deadlines and distribute texts at the most optimal times, and campaigns’ performance and conversion rates can improve dramatically.
For example, sending them out at lunchtime, when people are checking their phones more, or in the evening, when they have finished work. Similarly to social media engagement, consumers spend more time on their mobile devices between 9 am and 12 pm, and again between 5 pm and 9 pm in the evening.
Days, when customers are most engaged, are Wednesdays and Thursdays, with the least popular being the weekends when naturally people are more engaged with other tasks.
Offer free shipping
In order to encourage sales, offering free shipping is an extremely effective way to drive more sales and traffic. Similar to BOGO offers or discounts, these can all be combined.
For example, how PacSun is offering 50% off for a limited time only, including Free Shipping to sweeten the deal.
Abandoned cart notifications
Did you know that on average, more than 85% of online shopping carts were abandoned? That’s a rather high number, but it isn’t surprising considering several reasons that can be behind this: surprisingly high shipping costs, slow delivery times, discount codes not working, you name it.
But more often than not, it can be simply about customers postponing the purchase. Here a little reminder can come in handy. There isn’t a better way to reduce cart abandonment than automatically triggering a short SMS message. Adding a small discount can encourage existing customers to return to your store.
You could schedule the message to be sent 48h after the cart has been abandoned, sending a reminder with a discount code. For example, on Shopify, can be easily done with built-in tools like SMSBump amongst other Shopify apps, that are easily integrated.
Combine with other types of marketing
SMS messages are typically used to deliver short and time-critical messages that only include the most important information. These can be even more effective when combined with other types of marketing, like email or social media.
For example, if you send your customers an email campaign, and some of them won’t engage with the campaign, you can send them an SMS notification.
This way you can catch the customer across several different platforms, and the ones that are most convenient to them. These kinds of processes can be automated with great SMS marketing providers, such as Klaviyo or Omnisend.
Combining SMS with email, you can benefit from new email subscribers, higher response rates, and gather new contacts for the SMS distribution list.
Leverage SMS marketing to maximize your e-commerce sales
More and more e-commerce businesses are popping up globally. With the possibilities that online operations offer, cross-border commerce is no longer an issue. Anyone can sell and ship worldwide. Thus, increasing the competition.
Therefore, driving traffic to your web store and focusing on converting those customers is more important than ever. Even though new customer acquisition is crucial, nurturing the existing relationships will keep driving your revenues. After all, your loyal customers make up a larger chunk of the sales and provide a consistent revenue stream.
Use SMS marketing as a competitive differentiator. Even though social media is a powerful tool and amazing for creating a brand story, content can get lost. Messages are a much better way for targeting, personalizing, and driving sales. Use SMS as a competitive advantage, and remember to think out of the box when coming up with your offers!
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