Absolutely Everything You Need to Know About SMS Marketing - BuildFire
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Absolutely Everything You Need to Know About SMS Marketing


As a marketer, what would you give to have a marketing channel that had a 98 percent open rate? Better yet, one that was read within three minutes of receipt over 90 percent of the time? And what if you could combine that channel with location-based campaigns to deliver valuable offers to leads and customers right at the point they’re most likely to make a purchase with you? Sound too good to be true?

Actually, you do have that channel right at your fingertips with SMS marketing, and for many businesses, it’s a major component of their mobile marketing strategy. If you’re wondering if SMS marketing is right for you, or how to get started if it is, this post is for you.


Who Should Use SMS Marketing?

There’s no hard and fast rule about which businesses and industries are best suited for SMS marketing, but SMS marketing is definitely better suited for certain marketing objectives than others.

Fundraising/Raising Awareness. Nonprofits do really well with SMS marketing, both with text to donate campaigns and getting people engaged in a cause to take action, such as sign a petition. Think Haiti Earthquake Relief fund, for example.

Customer Service. A whole lot of statistics support the use of SMS for customer service, such as:

⬥ Texting got the highest customer satisfaction rates for method of contact with service centers (90%).

⬥ Over half of all consumers would prefer SMS over all other methods of communication with a support center. 

⬥ More consumers say they prefer to get order status alerts, and appointment and reservation confirmations via text than other methods. 

⬥ 64 percent of consumers have a more favorable opinion of a company that offers SMS text as a customer service channel. 

Reminders. This is an obvious use for SMS; think car dealerships texting owners when it’s time for routine maintenance, for example, or health care providers reminding patients of upcoming appointments to reduce no-shows. Businesses can take this one step further, in fact: Imagine having an opt-in list you can immediately contact in the case of a last-minute cancellation.

Customer Loyalty and Engagement. Texting is a great way to communicate with your loyal customers because they’ve already shown an interest in your business. Keep in mind that SMS is not the way to market your loyalty program; you’ve got to get the word out using other channels. But once they opt in, you can use SMS for exclusive offers or VIP content for your members.

New Customer Sales/Conversions. Here’s where an SMS campaign mixed with a location-based social campaign can be an extremely effective driver of new sales. Ask prospects to “check in” at your business using FourSquare or Yelp! to get a coupon or special offer sent to their phone they can use on this visit.

How Does SMS Marketing Work?

SMS-Advertisement-Pilot-Travel-Centers Text-Message-Coupon-Example-Pilot-Flying-J

Images courtesy of Tatango.com

There are two elements of an SMS campaign: The short code and the keyword. The short code is a five or six digit number that serves as the “phone number” customers text the keyword to. The keyword, then, is the word that goes in the body of the message and signifies which campaign your customers are signing up for.

For example, if you are launching an SMS marketing campaign, you might tell prospects to “Text TACOS4ALL to 123456.” The keyword, then, is TACOS4ALL and the short code is 123456.

To get started, you need to hire a text marketing service; they will provide you with access to a short code for your campaigns. There are two ways to get a short code:

⬥ Share a short code provided by your SMS marketing service. This is by far the most economical option, although it may limit your choice of keywords. Basically, the marketing service has one short code that is shared by all its clients and you use your keywords to identify campaigns. You will have to choose keywords not in use by other clients of that service.

⬥ Get your own short code used only by your customers. This gives you much more flexibility in choosing keywords; you own your short code, so you basically own all the possible keywords for that code, as well. This option is far more expensive, typically costing $1,000 a month or more to lease from your SMS company.

Once you sign up with an SMS marketing company and get your short code, you’ll manage all your campaigns through an online dashboard. Depending on which vendor you choose, you can choose from a variety of campaign management tools including analytics and reporting.


How Much Does SMS Marketing Cost?

In general, you will have two main costs associated with your text marketing: the fee for sending the text and the costs for renting keywords. Each company has its own pricing options, but the most typical model is a monthly fee that includes a certain number of texts and keywords.

In general, you might expect to pay between $5 and $25 per keyword per month and between $0.01 and $0.05 per text. Many of the top SMS marketing companies offer packages that include a fixed number of text messages (2,000 to 25,000 for example) and a fixed number of keywords (between 2 and 10 usually) for a flat monthly fee. You can expect to pay somewhere between $50 and $500 per month depending on your text volume, number of keywords, and desired features.

Of note: Most vendors allow free inbound messages and “sub keywords.” Sub keywords are those words that trigger a particular text response, such as “STOP” to opt out of your text campaign or “HOURS” for a text with your hours of operation.

When choosing a text marketing company, look for ones that offer these useful features that expand your options:

➠ Multimedia Messages. This capability lets you send more than just text to your subscribers; you can add images (such as your app icon), videos, and even sound for more engaging texts. 

Voting and Polling. Voting and polling offer businesses a great opportunity to leverage the immediacy of text messaging to gain insight about their customers and also increase engagement. American Idol audience voting is a classic example of this.

➠ Drip Campaigns. This is just like an email drip campaign, except using text messages. It lets you be pretty hands-off on day-to-day campaign development once you’ve set them up and deployed them. 

➠ Unique Coupon Codes. This is perhaps the most valuable feature in SMS marketing; take a look at these eye-opening mobile coupon stats:

?Consumers redeem digital coupons 10 times more often than paper ones. 

?More than 90% of people who receive digital coupon codes will redeem at least one.

?Over one-third of all shoppers use mobile coupons/discount codes.

?60 million smartphone users in the U.S. redeemed a mobile coupon code last year.

?77% of consumers spent between $10 and $50 more than planned when using a discount code.

Are There Any Legal Requirements for Using SMS Marketing?

Above all, text marketing is a permission-based system, requiring your users to opt in before you can begin sending them messages. Once customers have opted into your text campaigns, you must confirm their participation with a second text, which also includes instructions for opting out. You cannot send messages to users who have not given their express permission to receive texts, or to any subscriber who later opts out.

SMS marketing is governed by three separate bodies: The FCC, the Cellular Telecommunications Industry Association (CTIA), and the Mobile Marketing Association. Your vendor will help you with legal compliance issues, but if you want a primer on CTIA rules governing SMS marketing, this guide by Tatango tells you everything you need to know.

SMS Marketing Best Practices

Let’s start by stating an obvious principle that too many mobile marketers miss:

You cannot put SMS marketing in a silo and expect to be successful. 

SMS works best when you leverage its superpower (virtually real-time, interactive communication with extremely high engagement rates) as part of an integrated, multichannel effort that combines physical prompts (signage, print ads, packaging), email marketing, optimized landing pages, and social media.

Before you launch an SMS campaign, be sure you can say “yes” to the following questions:

➠Is the information in this campaign time sensitive?

➠Is direct communication the best way to get the information out instead of, say, mobile email or social media?

➠Is the information so valuable that my most engaged customers will appreciate a text message?

➠Can I effectively convey the information in 160 characters or less?

➠Does the message respect the highly personal nature of direct mobile communication?

For example, blasting your subscribers a text on Wednesday announcing a store-wide clearance sale on Saturday is not a good use of SMS marketing and email would be a better medium. Sending your customers a subscribers-only discount code they can use in the store that day only, however, does.

Now, on to best practices…


1. Make Sure You Have a Clear CTA.

Campaigns fail when prospects either don’t understand the incentive or know what to do to get it—or both.


This Pizza Hut Facebook ad hits all the basics: It tells customers what to do (text HUT to 69488) and what’s in it for them (free cheese sticks). Doesn’t get much easier than that.


2. Keep It Short and Sweet.

You only have 160 characters, so get to the point right away. Put your value proposition up front and use a URL shortener like goo.gl or bit.ly to avoid long, unsightly links. Here’s a great example:

Click Here for 50% off one item in store only. Expires Sunday.

3. Segment Your Subscriber List.

Integrate your CRM with your messaging service to give customers the most personalized and relevant experience possible.

4. Spell Out the Requirements.

If customers need to use a coupon code to get the offer in the store, for example, make sure that’s clear. Here’s a classic example from Tatango:


5. Only Send Exclusive Content.

Think of your text subscribers as a special VIP club and treat them accordingly. Don’t text out information you’re already sending out in your email campaigns or print ads. Reward your subscribers with content and offers that they can only get via text.

6. Use Urgency to Your Advantage.

One of the most attractive things about SMS marketing is its immediacy—90 percent of your messages will be opened and read within three minutes of receipt. Smart SMS marketers leverage that to create a sense of urgency. Your SMS offers should come with a specific expiration date and time. Use phrases like “today only” or “8-hour sale” or “expires at midnight.”

7. Don’t Be Afraid of MMS.

Multimedia messaging has several advantages over SMS, not the least of which is a 1,000 character limit as opposed to just 160 for SMS. It’s also a more entertaining way to engage with your subscribers; visual content is by far the most effective for marketing purposes. You can use MMS to send a video, a photo, or even an audio recording.

This Starbucks campaign is an oldie but goodie; it demonstrates a lot of SMS/MMS best practices you can copy.


Image source

8. Time It Right.

Avoid late night and early morning text blasts unless it’s necessary for your offer (a Midnight Madness reminder, maybe) or you’re targeting an audience segment you know won’t mind. If you market across time zones, be sensitive to that, as well. As a general rule, don’t text between 9 pm and 9 am.

9. Establish a Schedule.

Pick a schedule and stick to it; every good marketing campaign has its own rhythm and it’s important to find one that works for you and your subscribers. You don’t want to pepper your subscribers with daily texts, but if you only text every few months, be prepared for a huge wave of opt-outs each time. If you can offer valuable content on a weekly basis or even every two weeks, you might hit the sweet spot with your subscribers.

10. Integrate, Integrate, Integrate.

Get in the habit of promoting your short code and keyword(s) across all of your marketing channels and in all of your print campaigns to grow your subscriber list. Look for creative ways to insert your CTA: Try printing it at the bottom of your receipts, for example, and including signage in your brick-and-mortar stores. Use your email list to build your SMS subscriber list and vice versa.

Thousands of brands, large and small, are incorporating SMS into their mobile marketing strategy. While mobile websites, email, and apps get the lion’s share of spend right now, the incredibly high open rates and comparatively low costs suggest SMS should be part of your mobile budget this year.

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Ian Blair

BuildFire Co-Founder. I'm a digital marketer by trade and an entrepreneur at heart. I'm here to help businesses go mobile and build apps more efficiently than before.

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