Understanding the Risks and Rewards of SMS Marketing

Mobile marketing should never be a performance — but rather, a conversation. The moment that brands understand this deceptively simple philosophy, is the moment their engagement strategies open up to an entire new landscape of possibilities.

One strategy that continues to gain traction is SMS text marketing. As mobile usage skyrockets, SMS marketing presents unique opportunities and challenges for mobile marketers that are much different than navigating the world of in-app messages or push notifications. If you’re on the fence about SMS as a messaging channel or unclear about where text marketing fits within your omnichannel engagement strategy, here is a breakdown of what to look out for.

If you’re ready to jump into omnichannel engagement with SMS right now, we suggest starting with this retention guide.

The Rewards of SMS Marketing

High Open Rates

Perhaps the most compelling reason to incorporate SMS marketing into your strategy is its impressive open rate. In fact, 97% of texts are read within 15 minutes. This means your messages are almost guaranteed to be seen, providing an excellent opportunity for immediate engagement.

When users frequently open and interact with SMS communications, they remain informed about your latest updates, exclusive offers, and personalized content, fostering a sense of connection and loyalty to your brand. This regular engagement helps to build a habit of attention and response to your messages, reinforcing the value of your offerings and maintaining a strong, ongoing relationship.

Immediate Delivery and Response

SMS messages are typically delivered within seconds and often read within minutes. This immediacy is tailor-made for time-sensitive promotions, urgent alerts, and reminders. Whether you're announcing a flash sale or reminding customers of an appointment, SMS ensures your message is received and acted upon promptly.

You may run SMS flash sales, where limited-time discounts are offered exclusively via text, encouraging quick purchases and driving a sense of urgency. Geotargeting is another creative approach, where brands send personalized, location-based offers when customers are near a physical store, enticing them to visit and make a purchase on the spot. SMS can also be used for interactive campaigns, such as polls or quizzes, where customers can respond instantly, fostering engagement and providing valuable insights into customer preferences.

Direct and Personal

SMS marketing allows for a direct and personal line of communication with your customers. Unlike the email inbox, which can be cluttered with various messages, SMS is typically reserved for more personal and urgent communications. This makes it an ideal channel for fostering a closer relationship with your audience.

Transactional messages, including order confirmations, shipping notifications, and appointment reminders, provide timely and relevant information that customers appreciate, improving their overall experience and trust in your brand. Additionally, customer service communications, such as support updates or satisfaction surveys, leverage the personal touch of SMS to resolve issues promptly and gather feedback, fostering a sense of attentiveness that is hard to conjure through other channels.

High Engagement Rates

With the high open rates and the personal nature of SMS, engagement rates are often higher compared to other marketing channels. Customers are more likely to click on links, respond to messages, and take the desired action. This makes SMS marketing highly effective for driving conversions and customer interactions.

For example, a semi-regular SMS reminder about an in-app event or special offer can drive users to engage with your app more frequently than simply sending one-off reminders. Similarly, SMS can serve as a prompt for users to check their email for more detailed content or visit social media for community interactions and updates. This synergistic approach leverages the strengths of each channel, creating a cohesive and engaging experience that keeps users consistently interacting with your brand across multiple touchpoints.

Cost-Effective

Compared to other forms of marketing, SMS can be relatively cost-effective, especially when considering its high open and engagement rates. The ROI on SMS campaigns can be significant, making it an attractive option for businesses of all sizes. This affordability enables even small businesses to compete effectively, reach their audience promptly, and allocate more resources to other essential areas of their marketing strategy.

Learn how to improve the ROI of your SMS to fully take advantage of this channel.

The Risks of SMS Marketing

Regulatory Compliance

One of the biggest challenges in SMS marketing is ensuring compliance with regulations such as the Telephone Consumer Protection Act (TCPA) in the United States or the General Data Protection Regulation (GDPR) in Europe. Non-compliance can lead to hefty fines and legal issues. Marketers must ensure they have explicit consent from recipients and provide an easy opt-out option.

For example, the TCPA in the United States requires businesses to obtain explicit consent from recipients before sending them promotional SMS messages. In 2019, the retail giant J.C. Penney faced a class-action lawsuit for allegedly sending unsolicited promotional text messages without proper consent. The company ended up agreeing to a settlement of $6 million.

For a full overview of SMS guidelines, view our SMS Compliance Guide to learn more.

Message Fatigue

While SMS is a powerful tool, overuse can lead to message fatigue. Bombarding customers with too many messages can result in them unsubscribing from your list. It’s crucial to strike a balance and ensure that each message provides value to the recipient.

Customers typically sign up for SMS notifications because they value the immediacy and convenience of receiving timely updates, not because they want a new, daily texting buddy. To avoid messaging fatigue, segment your audience and tailor the frequency and content of messages to match their preferences and behaviors.

For instance, sending fewer but highly relevant and personalized messages to active customers can maintain their engagement without overwhelming them, thus preventing unsubscribes and maintaining a positive relationship with your brand.

Limited Message Length

SMS messages are limited to 160 characters, which can be a constraint for marketers used to crafting longer content. This requires messages to be concise and to the point, ensuring that every word counts. Crafting effective short-form content can be challenging but is essential for success.

SMS marketers must prioritize essential details in their notifications such as their call-to-action, and any necessary contact information, while cutting out any “fluffy” marketing copy normally included in campaigns over email.

Our guide on writing effective SMS marketing texts will get you pointed in the right direction.

Privacy Concerns

Given the personal nature of SMS, privacy concerns are paramount. Customers expect their data to be protected and used responsibly. Any breach of trust, such as selling data to third parties without consent, can damage your brand's reputation and lead to customer attrition.

Always ensure that you have explicit consent, or opt-in, from customers before sending them SMS marketing messages. Along those lines, provide easy opt-out mechanisms for customers who wish to stop receiving SMS messages, ensuring that opt-out requests are processed immediately.

Technical Issues

Deliverability can sometimes be affected by technical issues, such as carrier restrictions or message filtering. Carrier restrictions, which vary across providers, can impose limitations on message length, content types, and delivery rates, complicating the uniformity and reliability of campaign execution.

Meanwhile, message filtering algorithms designed to combat spam can inadvertently flag legitimate marketing messages, reducing their visibility or causing them to be blocked altogether. Mobile marketers must conduct thorough testing across multiple carriers to ensure compliance with varying restrictions and optimizing message content to avoid triggering spam filters.

SMS Marketing in the Omnichannel Ecosystem

It’s important to note that SMS marketing doesn't exist in isolation, and therefor its risk and rewards should be considered in the larder, omnichannel ecosystem. Even with its inherent risks, SMS is a crucial component of any effective omnichannel marketing strategy.

Here’s how SMS can fit into your larger messaging ecosystem:

Complementing Email Marketing

While email marketing is great for detailed content and visuals, SMS is perfect for quick updates and immediate calls to action. Combining both can enhance your marketing efforts. For instance, an email can provide in-depth information about a sale, while an SMS can serve as a timely reminder.

Enhancing Customer Service

SMS can be an excellent tool for customer service, providing quick answers to customer inquiries and real-time updates on issues like delivery status or appointment reminders. This immediacy can significantly enhance customer satisfaction and loyalty.

Integrating with Mobile Apps

For businesses with mobile apps, SMS can drive app engagement by sending personalized notifications, special offers, or reminders to use the app. This integration ensures that your mobile strategy is cohesive and creates a unified experience between your other mobile channels like in-app messaging and push.

Boosting Social Media Campaigns

SMS can complement social media campaigns by driving traffic to your social media pages, promoting special social media contests, or offering exclusive deals to your SMS subscribers. This cross-channel promotion can boost your overall marketing effectiveness.

Supporting Offline Campaigns

SMS can bridge the gap between online and offline campaigns. For example, sending an SMS with a discount code that can be redeemed in-store creates a seamless customer journey from digital touchpoints to physical locations.

A More Intuitive User Experience With OneSignal

With careful planning and a focus on providing value, SMS marketing can be a serious difference-maker in your mobile marketing arsenal – and there’s no reason it needs to be difficult to implement.

OneSignal allows teams to create personalized, automated SMS (and MMS) messaging sequences at scale, straight from the dashboard. And when you’re ready to combine SMS with your other channels, our cross-channel builder, Journeys, lets you drag, drop, and set triggers for the ultimate engagement campaign.