Every marketer knows that data-driven decisions are the least risky. That’s why it's so critical to measure the success of your SMS marketing campaigns. But how can you do that?
In this blog, we’ll describe the SMS marketing metrics you can track and analyze to help you determine engagement, revenue growth, and more.
Jump right to:
- Understanding SMS marketing metrics and KPIs
- Engagement metrics
- Revenue metrics
- User metrics
- Technical metrics
<h2 id="Understanding">Understanding SMS marketing metrics and KPIs</h2>
Both SMS marketing metrics and key performance indicators help you measure campaign performance. However, these two terms are different at their core.
SMS marketing KPIs measure performance by determining how close you are to achieving a longer-term business goal. Conversely, metrics are quantitative units that help you track or compare specific business processes. KPIs are strategic overarching indicators that drive decision-making, while metrics are more granular and provide insights to identify areas for improvement.
Some examples of SMS marketing KPIs include:
- Revenue growth. How much is your text message marketing program adding to revenue? What is your return on investment? Revenue attributed to your SMS program is a long-term KPI.
- Subscriber growth. How many new texting contacts do you have? Is the program expanding? List growth is a long-term measure of success for an SMS marketing program.
- Customer engagement. Are customers engaging with your SMS marketing campaigns and outreach? Customer engagement is a longer-term business goal for your SMS outreach.
You’ll see that these KPIs are more overarching and can lead to decisions about an SMS marketing program. Metrics, on the other hand, are more specific and help you see how a particular campaign performed so you can identify areas for improvement.
In the sections below, we’ll discuss the metrics you need to know.
<h2 id="Engagement">SMS engagement metrics</h2>
Below are some metrics to help you understand how customers engage with your SMS campaigns and texting channels.
Delivery rate
Delivery rate measures the percentage of messages delivered to your intended recipients. The closer your delivery rate is to 100 percent, the more people receive your text messages without issue. There are several reasons business texts aren’t sent. These include texting a phone number that doesn’t exist, a customer unsubscribing from messaging, or a mobile carrier blocking your message.
You can calculate the delivery rate with this formula:
Open rate
This is the total number of contacts who opened your SMS message. You calculate it by taking the number of opened texts and dividing it by the total number of delivered texts. This is expressed as a percentage and can tell you how many customers read your texts.
Click-through rate
This metric, expressed as a percentage, tells you how many people clicked a link you sent via text. This is a great engagement metric because it can tell you the efficacy of your messaging, including your call-to-action. A low CTR means your target audience didn’t resonate with the content, CTA, or discount.
To calculate CTR, take the total number of clicks divided by the number of people who received the message. Multiply that number by 100 to get a percentage.
Conversion rate (CVR)
A gold standard metric in marketing, conversion rate is the percentage of people who took a desired action after receiving your text. This metric can help you understand how many people booked a demo, signed up for your service, or made a purchase from your promotional text.
This is the calculation for SMS marketing CVR:
Opt-out rate
An opt-out rate is the percentage of people who unsubscribe after receiving a text message from your business. A high opt-out rate might indicate that your message content wasn’t useful, relevant, or timely, or that you’re sending your subscribers too many messages.
Response rate
This metric tells you how many people are replying to your text messages. Specifically, it is the percentage of text responses you receive out of the number of texts sent. This is a great metric to track if you send text surveys or customer support via SMS.
To calculate the response rate, use this calculation:
<h2 id="Revenue">Revenue metrics for SMS campaigns</h2>
The following metrics will help your business determine how much revenue to attribute to SMS marketing as well as its cost efficiency.
Cost per conversion
This metric helps you understand the efficiency of your text campaigns. It measures the amount of money spent per conversion, which could be a sale, sign-up, booking, or other type of transaction. The metric is expressed as a dollar amount to help you see how much each new conversion costs your business.
Return on investment (ROI)
ROI measures the revenue generated from an SMS campaign compared to the cost. Expressed as a percentage, ROI is an efficiency metric that business leaders care about. It can help you prove that your SMS program is adding value to your business.
To calculate ROI, take the sales generated and subtract the cost. Then divide that number by the cost, and multiply by 100.
Here’s a visual:
Average order value
The AOV is the average amount spent by customers who purchased through the SMS campaign. To calculate AOV, divide the total revenue generated by the SMS campaign by the total number of orders. You can grow sales and improve the bottom line by tracking and optimizing this metric.
Here’s a visual of the calculation:
Revenue per SMS
Sometimes, you want to understand how much you’re making per text message sent. That’s where revenue per SMS comes into play. To calculate this, take the revenue generated from texting and divide it by the total number of texts sent.
Here’s a visual of this formula:
<h2 id="User">SMS user metrics of note</h2>
These metrics will help you understand customer behavior relating to your SMS marketing program.
Active subscribers
This metric shows the number of contacts who’ve interacted with your marketing messages in a given time period. Businesses use this metric to help clean their lists and improve efficiency.
This is simply the number of subscribers who have clicked on a link or replied to a message in a given time.
Inactive subscribers
This metric gives businesses the number of contacts who haven’t interacted with their marketing messages in a set time period. It can be helpful for list cleaning and running re-engagement campaigns.
Opt-in rate
Before you can text your contacts, you must get their consent, which is called an opt-in. This metric helps you understand how many people choose to receive text communication from your business. It can also help you refine your SMS keyword strategy and determine where to collect SMS opt-ins.
Here’s the calculation for the opt-in rate:
Subscriber growth rate
This metric can help you understand how many people are joining your SMS list in a given period and track whether your SMS marketing program is growing. It enables you to determine the rate at which new subscribers join your SMS list.
To calculate your SMS subscriber growth rate, use this calculation:
Say you had 200 subscribers in January and 250 in February. You’d calculate the growth rate by taking:
Repeat customer rate
This is the number of SMS contacts who made more than one purchase from your business via text message. It’s the percentage of your SMS contacts who’ve made another purchase.
Churn rate
This metric shows the percentage of subscribers who left a group over a specific period. This would help you determine the rate at which subscribers leave your SMS list. If your churn rate is high, you will want to investigate why so many people are unsubscribing.
Engagement rate
Engagement rate helps businesses understand how contacts interact with an SMS campaign. For example, it would measure clicks, replies, and conversions for a more holistic view of engagement. This metric is expressed as a percentage.
To calculate the engagement rate, use this formula:
Text messages sent
This is the total number of text messages sent by your business. It helps you better understand your SMS utilization and how many message credits you must purchase each month. It can also help you identify peak months and hours to better staff your SMS support lines.
Text messages received
This metric tracks the total number of text messages your business receives. It can help you understand how many customers use SMS to reach your business and can help your company understand the importance of an SMS channel.
<h2 id="Technical">Technical metrics for SMS</h2>
These are the metrics that cover the technical side of an SMS marketing platform. They help you understand your messaging throughput and whether any errors occur.
Run time
Run time is the time it takes your full mass texting campaign to send to all customers. This metric helps you determine how many messages are sent per minute to determine your throughput. It can also help you understand if any technical limitations exist.
Error rate
This is the total number of errors that occurred during message delivery. It’s calculated by dividing the total number of errors by the number of text messages sent.
Get the metrics your business needs for texting success
All great marketers use data to measure performance. Why not choose a platform that tracks many of these critical metrics for you? Textline offers businesses the metrics they need to start measuring results right away.
Textline’s built-in metrics let you see the delivery rate, unsubscribe rate, response rate, and more without the hassle of setting anything up.
Do you want to see how the metrics feature works? You can request a demo from our expert team.
