How to Improve Your ROI from SMS Marketing Automations

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SMS is arguably one of the most intimate of digital marketing channels. While your customers (and let’s be honest, you) may have thousands of unopened emails, the typical open rate of SMS is far higher at 98% vs email’s 37.27%.

This is because we are glued to our phones. They carry our most personal content. We use them to do everything from hailing taxis to buying holidays. And yet still countless SMS campaigns fall short of the mark – why?

The top five reasons why marketers struggle to get ROI from SMS campaigns are:

1. Poor quality subscriber lists

Capturing phone numbers is harder than capturing emails because consumers are more protective of their personal phone numbers. Moreover, subscriber attrition can be high if the SMS content doesn’t consistently deliver value.

2. Deliverability and carrier filtering

Unlike email, SMS is typically delivered directly to a phone’s messaging inbox—yet carriers and aggregators have sophisticated filtering mechanisms to combat spam. High volumes of messages, poor sender reputation, or non-compliant content can lead to blocked or delayed texts.

3. Message fatigue

As mentioned above, SMS is an immediate and intimate channel. The downside of this is it can be highly intrusive. Notifications pop up on the phone’s lock screen. If messages come too frequently or lack relevance, recipients may unsubscribe or, worse, develop a negative perception of the brand.

4. Lack of personalization and segmentation

SMS’s potential for high open rates (often cited between 90–98%) makes personalization and segmentation critical. Generic blast messages might be opened, but they often result in lower conversions or higher unsubscribe rates.

5. Inability to integrate with other marketing channels

SMS rarely operates in isolation. For maximum ROI, SMS campaigns should be integrated with email, social, and other marketing channels. Ensuring a cohesive brand experience across all touchpoints is vital but often complicated.

And yet, despite these challenges, marketers that crack the SMS code are getting sky-high ROI. Retailers are seeing remarkable returns, earning an average of $55 for every $1 spent on SMS campaigns according to Forbes. By collecting zero-party data and enabling near-instantaneous interactions, SMS automation transforms how brands connect with their audience.

This blog offers actionable advice to help you improve ROI from SMS campaigns, but first, some context…

Understanding SMS Marketing Automation

SMS marketing automation involves using software to send targeted, personalized text messages to customers based on specific triggers or schedules. This approach allows businesses to deliver timely, relevant content directly to customers’ mobile devices, fostering stronger relationships and encouraging engagement.

SMS automation can be categorized into two campaign types: promotional and transactional.

Promotional SMS campaigns

 

01 Sms Create Personalized Campaigns And Automations In Minutes

Promotional campaigns focus on marketing and sales-oriented messages, including targeted promotional campaigns, personalized offers and discounts, new product announcements, event invitations, and customer loyalty programs.

Key benefits include:

  • High engagement rates
  • Immediate delivery and response
  • Cost-effective marketing communication
  • Increased conversion rates

Transactional SMS campaigns

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Transactional campaigns deliver important, time-sensitive information related to customer actions or account activities, such as booking confirmations, delivery tracking updates, travel itinerary changes, appointment reminders, and order status notifications.

Key benefits include:

  • Improved customer experience
  • Real-time updates and notifications
  • Enhanced trust and reliability
  • Reduced customer service inquiries

While both types of SMS automation are valuable, this blog post will focus specifically on promotional campaigns and their potential to improve ROI for businesses.

5 Innovative Strategies to Maximize ROI with SMS Marketing Automation

1. Gamify sign-ups

Challenge: Poor quality subscriber lists.

Capturing phone numbers is tough, so make the process irresistible. Use gamified experiences like SMS-based quizzes, or exclusive VIP clubs where customers unlock perks by subscribing. This approach makes signing up fun and builds a high-quality, engaged list from the start. Bonus: A strong first impression fosters loyalty.

2. AI-Powered delivery timing

Challenge: Deliverability and carrier filtering.

Carrier filtering can block messages that seem spammy or poorly targeted. Combat this with AI that optimizes delivery timing based on individual customer behavior patterns. By sending messages when customers are most likely to engage (e.g., right after a purchase or during browsing sessions), you increase deliverability and engagement while avoiding spam triggers.

3. Send hyper-personalized dynamic SMS content

Challenge: Lack of personalization and segmentation.

Generic SMS blasts can hurt your reputation. Instead, automate dynamic content tailored to each customer’s preferences or actions. For instance, include a first name, a recently viewed product, or a “back in stock” alert. By using AI-driven segmentation, you ensure each message feels personal, boosting conversions and reducing unsubscribes.

01 Sms Create Personalized Campaigns And Automations In Minutes

4. RCS for a richer customer experience

Challenge: Inability to integrate with other marketing channels.

SMS doesn’t have to be just text. With Rich Communication Services (RCS), you can incorporate images, videos, carousels, and quick-reply buttons to create a unified, interactive experience. For example, follow up an email campaign with an RCS message showcasing the same offers, ensuring customers can act instantly on any channel they prefer.

5. Use geo-fencing for location-based offers

Challenge: Message fatigue.

Avoid sending irrelevant, intrusive messages by tapping into geo-fencing technology. For example, send customers a personalized offer when they’re near your store: “Hey [Name], we noticed you’re nearby! Pop in within the next hour to enjoy 15% off.” By adding context and urgency, you’ll keep your messages exciting and prevent fatigue.

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Implementing SMS Marketing Automation: Real-World Examples

Let’s explore how leading companies have successfully implemented SMS marketing automation to drive engagement and ROI:

Brisbane Airport: Enhancing customer experiences

Brisbane Airport Sms Marketing

Brisbane Airport leverages data-driven personalization to improve customer experiences. By connecting disparate data sources, they can quickly act on insights to deliver personalized engagements across channels. 

Claire Williamson, Head of Marketing, emphasizes their careful approach to data collection, ensuring they only gather necessary information to provide customer value.

The key aspects of their SMS automation approach include:

  1. In the days leading up to a customer’s trip, they send details about terminal offerings to encourage last-minute shopping at the airport instead of shopping centers.
  2. They promote their food and beverage options to break down perceptions about quality and cost of airport dining.
  3. When a customer enters or books a car park, they send an SMS with coffee vouchers or retail offers to encourage in-terminal spending. SMS is used at this point because email may be too late.
  4. Wi-Fi data is used to capture more people than just parking customers, though this is still an area they plan to focus on and improve.
  5. They use web channels to display messaging that is consistent with their email communications, creating a cohesive experience.
  6. Lead generation through web channels has helped build their database.
  7. SMS is used selectively and strategically.
"We choose when we use SMS... because I think that it needs to be at the right time for people to actually receive that in a positive way."
Claire Williamson
Head of Marketing

Village Roadshow Theme Parks: Real-time personalization

Village Roadshow Theme Parks uses real-time data for personalized guest engagement. By implementing relational data segmentation, they create meaningful audience segments and deliver personalized communication. Real-time API feeds enable targeted SMS and push notifications during guest visits, offering upsells on additional experiences like animal adventures or dining options.

Their approach includes:

  1. Leveraging relational data: They use SAP Emarsys’ relational data feature to connect various data sets for segmentation and personalization.
  2. Demographic-based targeting: They utilize demographic data to tailor communications and experiences for different guest segments, such as families with children or older visitors.
  3. Real-time personalization: The company uses guest data to deliver personalized experiences and communications in real-time as visitors enter the parks.
  4. Preference-based recommendations: They analyze past behavior and demographic preferences to recommend events and experiences to guests.
  5. Omnichannel approach: Village Roadshow focuses on connecting with guests through various digital channels, including owned and paid media.
  6. Scale and automation: They leverage data flexibility to deliver personalized communications at scale, setting them apart in the entertainment industry.

Important Questions to Ask When Evaluating SMS Marketing Automation Platforms

To effectively implement SMS marketing automation, businesses need robust tools and platforms. The right tools do more than send messages—they create intelligent, responsive marketing ecosystems that adapt to customer behaviors, preferences, and real-time interactions.

As a result, choosing the right platform can make or break your SMS marketing success. To ensure you’re selecting a tool that meets your needs, ask these critical questions:

  1. How well does the platform integrate with my existing CRM and marketing tools?
    A strong integration ensures seamless data flow across channels, enabling a cohesive customer experience. Look for platforms that connect easily to your CRM, email, social, and eCommerce tools.
  2. Does the platform support advanced audience segmentation?
    Personalization is key to effective SMS marketing. Ask if the platform allows you to segment audiences based on data like purchase history, engagement behavior, demographics, and more to deliver targeted messages that drive results.
  3. What automation capabilities does the platform offer?
    Can you build complex workflows easily, such as abandoned cart reminders, re-engagement campaigns, or post-purchase follow-ups? Ensure the platform simplifies automation while still offering flexibility and customization.
  4. How robust are the analytics and reporting features?
    Understanding your campaign performance is non-negotiable. Ask if the platform provides detailed insights on open rates, click-throughs, conversions, and ROI, so you can refine and optimize your strategy.
  5. Does the platform help ensure compliance with SMS marketing regulations?
    Regulatory compliance is critical to maintaining trust and avoiding fines. Check if the platform includes features like opt-in management, automated opt-outs, and safeguards against sending messages outside permissible hours.

Measuring and Optimizing SMS Marketing ROI

To maximize your SMS marketing ROI, focus on these key performance indicators (KPIs):

Performance tracking

  • Campaign delivery statistics: including hard and soft bounce tracking and unknown delivery status reporting 
    • Click-Through Rate (CTR): Measure the effectiveness of your CTAs.
    • Conversion Rate: Track the percentage of recipients who take the desired action.
  • Unsubscribe rates: Monitor the percentage of subscribers who unsubscribe to ensure your messages remain relevant.

Revenue analysis

  • Revenue Impact tracking per channel: Measure the direct financial contribution of SMS campaigns to overall revenue, allowing comparison with other marketing channels
  • Campaign-specific revenue metrics: Analyse revenue generated by individual SMS campaigns, including total revenue, ROI, and average order value
  • Revenue Per Recipient (RPR): Calculate the average revenue generated per SMS recipient.

List management

  • Original launch list analytics: Analyse initial campaign performance metrics for the original recipient list.
  • Undelivered message tracking: Monitor and identify reasons for SMS delivery failures.
  • Contact reach metrics: Measure campaign effectiveness in reaching and engaging the intended audience.
  • Response rate monitoring: Tracks recipient actions and conversions in response to SMS campaigns.

Regularly analyze these metrics and use the insights to refine your SMS marketing strategy. A/B testing different elements of your campaigns can help identify what resonates best with your audience and drives the highest ROI.

02 Sms Accurately Measure Campaign Impact

Advance Your Marketing with SMS Automation

SMS marketing automation has revolutionized how businesses engage customers and drive ROI. By implementing data-driven personalization, omnichannel strategies, and real-time engagement, companies can deliver targeted, relevant messages that resonate with customers and drive business results.

To achieve similar success, consider partnering with a reliable marketing automation platform that offers comprehensive SMS marketing capabilities. With the right tools and strategies in place, you can create impactful SMS campaigns that not only engage your customers but also significantly boost your marketing ROI.

Remember, the key to successful SMS marketing automation lies in delivering value to your customers through personalized, timely, and relevant messages. By following the best practices outlined in this guide and continuously optimizing your approach, you can harness the full potential of SMS marketing to drive engagement and achieve impressive ROI.

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