SMS: New ROI paths for your business

In today’s dynamic business landscape, diversification is a crucial strategy for long-term success and resilience.

As markets shift, businesses that have embraced diversification are better equipped to navigate uncertainty, seize new opportunities, and maintain a competitive edge.

But why is it vital to diversify your revenue?

For starters, it reduces your risk. Businesses with multiple streams of revenue can manage the pressures of economic downturns and survive challenges like a global pandemic or natural disaster.

Another benefit of diversifying is that it increases your market reach. Each new revenue stream attracts new customers into your sphere, where they'll discover your other offerings and develop loyalty to your brand.

A diversified company also outperforms the competition. Your customers will appreciate the advantages of your broader offerings and reward you with more business.

Finally, brands with a limited product portfolio are more susceptible to cloning. Diversified businesses are beyond imitation.

SMS marketing helps promote diversification

Did you know that two-thirds of people on Earth have a mobile phone? In fact, in 2022, there were more mobile subscriptions than people (8.58 billion subscriptions compared to 7.95 billion people). And most phone users open and respond to text messages within minutes of receiving them.

That’s why most businesses use Short Message Service (SMS) marketing to build relationships with their customers, distinguish themselves from competitors, reduce churn, and increase customer loyalty.

The power of SMS marketing is in its ability to convert leads to customers. People who might not see your social media posts, television ads, or direct mail pieces will still open your business texts and engage with the content. SMS messages provide a prime opportunity to attract new people to your revenue streams.

SMS texts don’t require an internet connection, and messages get delivered in seconds.

For these reasons, the most diversified businesses always prioritize effective SMS strategies.

What’s your business SMS ROI?

Even with its exceptional impact and reach, business texting isn’t a foolproof practice. To succeed, you must be strategic and adaptable to effectively deliver timely messages. That’s why it’s crucial to know what approaches yield the best results.

While there are many ways to determine the ROI of your SMS marketing, here are a few key metrics to consider:

• Earnings per message: This metric is essential from a monetary perspective. To calculate it, divide the amount of money the campaign earned by the number of messages you sent.
• Click-through rate: This metric reveals how many customers clicked on the links in your message.
• Conversion rate: This metric, which is also key to identifying possible fraud, denotes how many customers' clicks resulted in a successful transaction.
• Unsubscribe rate: This metric shows how many of your text recipients opt out of your future sends. Strive for an unsubscribe rate of 3% or lower to retain customers.

When your SMS marketing is effective, a boost in ROI will follow. That's why it’s essential to consistently track your campaign performance and identify growth opportunities.

And remember: strategies that are successful today could be obsolete in the next business quarter. It’s the nature of such a fast-moving and personalized form of marketing.

With this in mind, let’s look at four ways to use SMS marketing to create new ROI opportunities for your business.

1. Develop a loyalty program for SMS customers

A loyalty program is one of the best ways to strengthen your SMS campaigns and enjoy a better ROI. The secret of this strategy’s success is that people love to feel like they get preferential treatment. This allure of exclusivity cultivates brand loyalty and a rise in purchasing behavior.

With an SMS loyalty program, you can share product teasers and special discounts and even request feedback. It becomes a primary touchpoint for your various revenue streams, sparking transactions and encouraging your customers to become brand ambassadors.

Creating a successful loyalty program starts with clear communication that outlines what exactly it is and, more importantly, what it offers. Opting out should be a simple process, so customers feel like they’re in a special club rather than trapped in another contact list.

Lastly, your program should have two-way texting, as it enables you to respond to questions and offer suggestions.

2. Turn abandoned shopping carts into valuable conversations

Abandoned cart recovery tools prompt a transaction after a customer adds a product to their online cart but fails to check out.

Using SMS is an effective way to address abandoned carts because messages go straight to the customer’s phone—making them likely to get read while the potential purchase is still on their mind. Rather than saying, “Hey, you didn’t buy this thing from me,” you can send targeted messages that offer a special discount code if the customer completes the transaction within 24 hours. Or you could suggest similar products that might interest them, like a new release or a high-quality legacy product that hasn’t yet caught on with the public.

Abandoned carts will always be an issue in the ecommerce world, but strategic SMS communications can reverse the trend, making targeted texting a great way to support your diversified business ventures.

3. Follow up with a cross-channel message

Just as successful customer service creates frictionless engagement across multiple channels, promoting your products and services should adopt a similar multichannel approach. Given the speed and personalization of SMS, it’s the ideal way to advertise your entire catalog of goods and services.

If you launch a new product or service, send out a benefit-driven message with a link to the landing page. And if you have an exciting contest running on your Instagram page, promote it through SMS. You can even offer an extra entry for those who respond to the text.

One of the most common examples of this cross-channel approach is appointment reminders. Most people don’t intentionally miss appointments—they just forget about them. SMS text reminders reduce no-shows and boost revenue.

By removing marketing silos and using SMS as a personalized cross-channel resource, you’ll enjoy a higher ROI for your other channels as well.

4. Lean into two-way texting

Nearly all marketing communication channels have limitations. For example, emails run into filters, digital ads risk banner blindness, social media messages get blocked, and phone calls go unanswered.

Text messages, however, are likely to get read and acted upon. And with two-way texting, you can create engaging conversations that showcase your brand’s benefits, answer questions, and convey your care for your customers.

This collaborative form of communication sets you apart from the competition and lays the foundation for years of business success.

Level up your SMS with Twilio

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Sign up for your free Twilio account today to get started. No credit card is necessary, and you’ll get immediate access to our industry-leading SMS tools.