An SMS Marketing Strategy For Conversion Optimization By A Growth Hacker

Many tout that SMS is an untapped marketing channel where consumers prefer to communicate with brands.

Forbes even called SMS the “Marketing Tool of the future.”

And, many statistics online claim up to “85% of consumers prefer text messages over calls or email (Slick Text)!”

The glut of mind-boggling statistics, and influencer hype make SMS marketing sound foolproof. But, as with any marketing channel, you must approach it strategically to be successful at it.

So, in this article, I’ll explain some SMS marketing pitfalls to avoid, how I developed a use case for conversion rate optimization, and a data-driven SMS campaign where I achieved an 89% click rate and increased close rates by 72%!

Conversion rate optimization (CRO) is a growth marketing tactic that focuses on increasing users’ likelihood to perform target actions at various touchpoints in the marketing funnel. The overall goal is to improve user engagements and conversion rates at touchpoints throughout the buyer’s journey.

Clinton Byrd – Growth Marketing Expert

Note: The term “SMS” is synonymous with “text message,” and will be used interchangeably.

Don’t Fall For SMS Marketing Hype

We’re not building an SMS campaign because Gary V pumps that his yields 98% open rates and 90% engagement rates.

Or because a report showed that “99% of SMS marketing messages are opened within 20 minutes (Mobile Squared).”

As great as those numbers sound, without context regarding the actual campaigns behind them, we can’t determine if those results could be replicated or are the norm.

If, for example, an audience explicitly signed up to receive a promotional coupon or sweepstakes entry by text message, then that campaign would innately have a high engagement rate.

The results could be very different for a text message sent as part of a lead nurturing campaign intended to encourage engagement.

Nevertheless, although we are in the dark about the campaigns that yielded those 90% engagement rates, these claims are worth testing and validating.

The Mysterious Sources of SMS Open Rate Data

Generally, marketers normally can’t track text message opens. Pull up any SMS marketing platform’s sparse analytics dashboard, and you will find the open rate metric is typically missing. So where are these statistics coming from?

And take care not to confuse delivery rates with open rates – they are not the same.

Furthermore, delivery receipts are not the same as read receipts and do not indicate that a message was read by the recipient.

Typically, a successful message delivery simply means it was delivered to the SMS carrier/operator, which routes it to the recipient. It simply did not return an undelivered error response:

  • Carrier Spam Filters (e.g. the message contains spammy keywords or illegal content)
  • Network problems with the recipient’s carrier
  • An incorrect recipient number

There are many potential reasons for failed SMS deliveries, just look up “SMS status codes” for your respective SMS marketing platform.

Check the analytics dashboard for any major SMS and MMS business texting software, you will surely find there no open rates to be found. Which makes any published statistics on SMS open rates questionable – unless they came directly from a mobile carrier.

Example of SMS Marketing Platform Reporting Dashboard SMS Marketing Strategy For CRO Clinton Byrd Always The VIP
Example of a popular SMS Marketing Platform’s Reporting Dashboard

Even you tried a workaround of adding a code snippet to report message opens (not clicks, wherein all you need is a utm tracking link), then this would change that SMS into an MMS or email message.

Since SMS opens can’t be tracked, this makes many published open rate statistics questionable and likely misinterpretations of delivery rates or click rates. So, my advice is to take them with a grain of salt. You can always search for the original reports and source data behind them – as I did. But chances are, you will also come up empty-handed.

Worthwhile Text Message KPIs

Taking all the popular SMS statistics at face value, we can see potential indications of user behavior.

And, if users open anywhere near 99% of their text messages within 20 minutes, then that soundly beats the “23% of emails that are opened within the first hour of receipt (Super Office),” as well as the industry average email open rates of “15-25%” (Mailchimp).

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Additionally, SMS marketing reply rates of 45% (Optinmonster) and click-through rates as high as 30% (Simpletexting) are impressive – and sound believable. And, yet again, these results sound great when compared to similar email’s industry average click rates of 2.6% (Mailchimp) and click-through rates of up to 25% (Constant Contact).

Reply rates and click-through rates are worthwhile, trackable, and thus measurable key performance indicators (KPIs) that further justify testing the SMS channel in an omnichannel marketing strategy.

Avoiding SMS Spamming in Campaigns

Before diving headfirst into SMS marketing, it’s important to note that collecting a contact’s phone number does not give free rein to send them text messages. Marketers have a habit of requiring phone numbers on submission forms, then considering that as blanket consent to call or text.

In the world of data privacy and GDPR, marketers justify this direct communication under the flexible lawful basis category of “legitimate interest.” This can be risky for your brand image and deliverability when sending bulk text message marketing to users who didn’t expect it.

So, generally, there should always be an explicit opt-in for text communications. Otherwise, your awesome promotions could be considered spam by their recipients.

Additionally, TCPA laws apply to text messages. So, like calls, text solicitations have restrictions, like being prohibited between 8 AM and 9 PM. The wrong move could incur violations of up to $1500!

So, before launching any SMS campaign, it’s important to segment your target audience lists for SMS opt-ins, be familiar with text messaging laws, and research SMS carrier filters to help avoid spammy keywords.

SMS Custom Reporting

Since text message platform reporting is often limited to simple inbound/outbound message counts, opt-in status, and delivery rates, you will have to go the extra mile for reporting.

To collect engagement data, you should use a CRM platform integration along with UTM codes to track URL clicks. Determine your performance metrics, such as Reply Rates, and create the necessary custom properties, calculations, and workflows for custom reporting.

And when measuring performance, keep in mind that text messaging doesn’t have the same deliverability standards, competition for the inbox, or active spam filters (which aren’t on by default on most phones) that email marketing has to contend with. So, it’s best not to benchmark or A/B test email apples against text message oranges.

Improving the User Experience

Understanding user preferences and behaviors is key to improving the user experience. Being where your customers are and engaging with them in preferred ways is fundamental in modern marketing strategy.

When researching user communication preferences, one survey revealed that,

75% of millennials prefer SMS communications.

Openmarket

And from a competitive standpoint, another survey revealed that,

63% of respondents would switch to a company that offered text messaging as a communication channel.

Avochato

This sounds almost too good to be true. So, to validate these claims, I analyzed an e-commerce dataset with a sample size of 6,000 customers.

My analysis showed that 63% of customers chose text messages as their preferred method of contact!

63 Percent Of customers choose SMS Clinton Byrd - SMS Strategy For Conversion Rate Optimization Always The VIP
63 Percent Of customers choose SMS

Given that my findings were in line with the publicized statistics, we would be remiss to ignore trends in user preferences towards text message communications. This presents an opportunity to improve our users’ experience.

Alignment With Sales Goals

Essentially, the goal of sales operations is to find methods to help the sales team to perform effectively and efficiently. Furthermore, a primary goal of sales enablement is to help optimize the marketing funnel to improve sales conversions; This is also known as funnel optimization.

Funnel optimization is the process of identifying key touchpoints in the sales and marketing funnels and tactically improving them to increase conversion rates. While this is typically done to meet business goals, it may also improve the users’ experiences in their buyer journeys.

Clinton Byrd – Growth Marketing Expert

So, our intention here is to leverage text messaging in a way that will directly support our sales team. This leads us to the next step of finding “low-hanging fruit” opportunities that may yield immediate results in a campaign.

For this purpose, a statistic regarding user preferences for scheduling appointments stands out:

67% of people would rather text with a business about appointments and scheduling than by email or phone. 

ZipWhip

For sales, this preference connects with the goal of booking meetings with prospects. So let’s build on this idea.

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Factoring in Lead Qualification and Intent

Typically, in the universe of sales, meetings are considered to be strong indicators of buying intent. They open the types of conversations that lead to sales.

So, in terms of lead qualification, when a lead requests a meeting, this hand-raiser action often converts them to a sales accepted lead or sales qualified lead.

Furthermore, the number of Meetings booked is a metric that you can easily track and assign a dollar value to for sales forecasting. Which makes it a KPI that sales leaders can monitor to track progress toward sales goals and to guide sales coaching.

Ask any sales leader, a sales rep with no scheduled meetings halfway through the month is a huge red flag. Meetings are leading indicators for deals and revenue, and support a healthy sales pipeline.

Optimizing The Sales Funnel

Given the importance of meetings in the sales funnel, we can hypothesize that the action of booking a meeting is a key conversion point that when optimized can increase sales conversions.

To check this hypothesis, I analyzed a sample of ecommerce data with approximately 2,300 leads, and found that leads who scheduled a meeting had a 72% higher conversion rate than those who did not!

Leads who scheduled a meeting have a 72 percent higher conversion rate to customer Clinton Byrd - SMS Strategy For Conversion Rate Optimization - Always The VIP
Conversion rate analysis of 2300 Ecommerce customers – Clinton Byrd

This data confirms the opportunity to target audiences at this key conversion point in their buyer journey and immediately impact the sales pipeline.

An SMS Campaign To Increase Conversion Rates

So far, our research has revealed a lot of promising insights:

  • SMS marketing yields higher engagement rates
  • Users prefer scheduling through text messaging
  • Leads who schedule meetings have higher conversion rates.

All of these factors lead us to the decision to proceed with using the SMS channel to help optimize customer conversion rates.

For our, campaign, the goal will be to use targeted SMS communications to increase the number of leads who schedule a meeting with our sales team. This will support our strategic goal of funnel optimization and our business goal of revenue growth!

This is where I’ll leave you with a cliffhanger, and an idea for an actionable campaign.

But, if you are itching to know the results, my SMS campaign from this idea achieved a click rate of 89% (count of URL clicks/Count of SMS sent) and a 10% increase in meetings booked with sales qualified leads for the sales team!

Additionally, those leads had a 36% higher close rate than the benchmark! Based on my goals, that was a win. You can determine if it would be for you.

I hope this article was helpful in offering or inspiring some creative ideas. If it was, please share this article to support my blog, and shout-outs on LinkedIn are always welcome.

Finally, if you would like to see how I implemented part of this campaign with custom automation and SMS autoresponders in Hubspot, doing either of the above will let me know there is a demand for content like this and encourage me to post it.

Cheers to your growth marketing journeys!

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About Author
Clinton Byrd Headshot

An expert club promoter, marketing executive, and entrepreneur from NYC. Not only is he the founder of Always The VIP LLC, a top nightlife trend website, he also leads growth marketing strategies for SaaS, B2B, and B2C companies. Clinton is a sought after blogger, who has written authoritative articles on email marketing, SEO Due Diligence, and the nightlife industry who finds deep joy in creating memorable experiences that bring people of all colors together.

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