Many e-commerce brands ask, “What is SMS marketing, and how does it help the bottom line?” Customer loyalty and retention are becoming increasingly important for brands striving for long-term growth. Implementing retention strategies that make brands more attractive to consumers strengthens loyalty and helps brands achieve this long-term growth they’re looking for.
There are many tactics and strategies that can be applied to reach these goals. Most will immediately look to email marketing, but SMS marketing is becoming increasingly popular because of how effective it is. In this guide, we’ll teach you everything a beginner needs to know about SMS Marketing as well as some tips to get you started.
What is SMS Marketing?
If you’re wondering, “What is SMS marketing?”, SMS (Short Message Service) marketing, or text message marketing, is a marketing strategy that involves sending text messages to customers. These text messages include order confirmations, order and shipping updates, sales and discounts, and various other promotions and alerts. This is a service your customers must opt in to in order to receive your promotional messages.
Why is SMS Marketing So Important?
If you don’t know what is SMS marketing, it’s a great way to directly interact with your customers. Text messages are much more personal, which, when done correctly, can be a very good thing. The average open rate for SMS messages is much higher than email, averaging a 98% open rate compared to 20% for email campaigns. Because your messages have a high likelihood of reaching your customers, this marketing strategy is something that should be utilized by all e-commerce brands.
SMS Marketing Benefits
With SMS marketing having such a high open rate, it has become a powerful channel of marketing that comes with its fair share of benefits. There are a few variables that SMS affects, including purchase frequency, average order value (AOV), and customer lifetime. Each one of these metrics play a big role in the overall performance of your brand, as they’re all measurements of your customers’ purchase behavior. When you can improve their purchasing habits, this only leads to growth. To actually measure this growth, it’s important to understand a metric called Customer Lifetime Value.
Increase Customer Lifetime Value
One of the most important metrics that SMS marketing affects is your Customer Lifetime Value (CLV). CLV measures how valuable your average customer is over the average period of time they buy from your brand.
SMS primarily affects purchase frequency, but it can also have an impact on customer lifetime. In some cases, it can even increase your AOV if you have promotions such as one where they get a discount or free shipping if they spend over a certain amount on their next order.
When you can properly use SMS marketing and use all the right strategies and best practices, it can greatly influence your overall customer loyalty, which is one of the most significant assets a brand can have.
Tips on How to Use SMS Marketing
Just like any marketing channel, there are some things you need to know before getting started. Using a marketing strategy that delivers your message right to your customers, there’s a high potential for upside, but there’s also a high potential for ruining your relationship with your customers if you don’t use best practices.
Get Opt-Ins from Your Customers
The first and most important tip when learning about what is SMS marketing is making sure you get an opt-in specifically for SMS. This form of marketing channel is highly regulated, and you don’t want your brand to get into any legal trouble. Making sure you follow SMS regulations from the beginning can save you from major headaches down the road.
Keep it Short and Sweet
When messaging your customers, you want to make sure your texts read smoothly and aren’t too lengthy. Emails tend to be a lot more passive and blend in with hundreds of other emails. People are used to receiving an excessive number of emails as it’s just become a part of life. However, text messages are much more attention-grabbing, hence why they have a much higher open rate.
Make Your Messages Relevant
Because your SMS messages are much better for grabbing the user’s attention, you want to make sure it’s worth their while. Make sure the content you send them is relevant, so they don’t feel as if they’re wasting their time checking their texts from you.
Your SMS marketing should primarily consist of shipping and order updates, and sales and promotions. You also need to be sure you don’t send too many promotional messages to where it becomes spammy because you don’t want them to get annoyed and opt-out.
Segment Your List
Not all customers are the same, so don’t send them messages as if they were. With a large customer base, there are lots of different ways you should segment your customers when it comes to promotional emails. For one, you should segment your SMS list by gender, assuming you sell products that are split up by gender, such as apparel.
With the right data, you can also segment your list by interests and recent purchases. If you have a wide variety of products, there’s a good chance that different customers show different interests in the types of products you sell. For example, if you recently purchased a bunch of gardening stuff from Home Depot, it would be more effective for them to send you promotional messages regarding gardening supplies, rather than recommending kitchen appliances.
If you want to get really in-depth, you can use RFM Analysis to further segment your customers by other types of purchase behavior that are quantifiable, such as Average Order Value (AOV) and purchase frequency. This allows you to identify your highest-value customers, your least valuable customers, and everyone in between. When looking into this type of data, you can uncover a lot about your customers and their buying habits.
SMS Marketing Strategies You Can Use
When learning about what is SMS marketing, it has a lot of potential because of all the different strategies you can use. You can essentially create the same campaigns and flows you would with email, but you have a higher chance of the customer actually opening your message.
With that said, the delivery is much different with SMS messages. Although the intent might be the same as email, you have a character limit and lack any sort of visual customization, which will force you to get a little more creative with how you execute these strategies. Now that you know the answer to, “What is SMS marketing?”, here are some SMS strategies e-commerce brands should use.
Your most loyal customers are an important part of your brand that adds a lot of value. So, you should treat them like they are and offer them special privileges. One way to do this is by giving them exclusive offers that hold more value than regular promotions. When sending them messages, make it clear that you are showing your appreciation to them for their loyalty and rewarding them for it.
Whenever you run sales and promotions, you want to get that message across to everyone you can. Email marketing is the most common way for brands to communicate this, but with SMS marketing being so effective, you should utilize this channel as well to get the best results.
With SMS messages having a much higher open rate than emails, you’re more likely to have customers seeing your sales and promotions, leading to higher success from your marketing campaigns
Abandoned Cart Flows
It’s quite often that customers will add items to their cart and almost finish the checkout process but end up abandoning checkout for whatever reason. Many who do this end up not coming back, but one measure you can take to increase the rate at which potential customers do come back is by sending them text messages reminding them to complete their purchase.
To increase the likelihood of them finishing their checkout, you can even offer them a coupon for a discount or free shipping. There’s a chance they may not enjoy getting texts telling them to complete their purchase, so incentivizing them helps to reduce the number of people who opt-out.
Order confirmation text messages may not seem as if they provide a ton of value to your customers or benefit your brand. Though this doesn’t directly increase sales or attract customers, it’s a small part of the customer experience that makes it a little bit better.
For customers, especially ones with crowded email inboxes, having their order details in their text messages simply provides convenience. When breaking down your customer’s journey and their experience with your brand, all the small things add up, and making order details conveniently available makes their experience a little more positive.
It can also help with account security. If they have an account with your brand and they get an automated message that someone ordered something with their account where their credit card information is saved, this can immediately notify them that their account was hacked.
Adding onto how order confirmations provide value, the same is true for shipping updates. Shipping updates often provide even more value than order confirmations. It helps in the same way that it provides convenience, but shipping details and updates are often more important to customers than the order confirmation.
By letting someone know when their order is shipped, out for delivery, and actually delivered, this can let them know the whereabouts of their order and give them time to come home if they’re expecting the package to arrive while not at home.
Win-Back SMS Flow
Unfortunately, previously loyal customers sometimes just stop buying from your brand. There are a number of reasons why customers quit buying from their favorite brands, and it can be hard to prevent it from happening; however, there are ways you can bring back old customers.
By sending promotional messages to customers who haven’t made a purchase in a while, there’s a chance that they’ll take you up on that offer if the price is right. By giving them really good deals to entice them to make a purchase, especially if they have a good history of having a high Average Order Value, you can boost your revenue a bit and even rebuild an ongoing relationship with some of your customers.
How to Get SMS Marketing Subscribers
Now that you know what is SMS marketing with strategy recommendations, here’s how to get SMS subscribers. With SMS marketing being such an effective medium for promotions and building customer loyalty, you’re probably ready to start building your SMS list. But remember, it’s something they have to actually subscribe to, which means you have to make an effort to get customers to sign up. At checkout, you can have a checkbox that is automatically checked, which is the agreement to receive promotional SMS messages.
Another way to build your SMS list up is by creating a loyalty program. Customers who sign up for this, are also more likely to respond well to SMS marketing messages, so implementing a loyalty program is something to also consider.
Get Better SMS Marketing Results
If you use SMS marketing the right way, it can lead to an increase in customer loyalty. Now that you know what is SMS marketing, here’s how to get better campaign results.
Higher customer loyalty will lead to higher CLV, helping you achieve long-term growth with your online store. Now that you know the answer to, “What is SMS marketing?”, the next step is to get the most out or your campaign results.
If you’re looking for help with SMS Marketing or maximizing your CLV, we offer Customer Value Optimization (CVO) services or you can request a free CLV Audit to receive some free, actionable strategies that you can use to increase CLV (including SMS strategies).