Key Metrics for Measuring SMS Marketing ROI

Once your SMS marketing campaign is up and running, it’s time to assess its success. Understanding the data you’re collecting is crucial to determine if you’re achieving the desired ROI.

Track Growth – The Snowball Effect

Think of your SMS campaign’s growth like a snowball rolling down a hill, growing bigger as it collects more momentum. To measure this growth, you need to calculate your growth rate.

To find your growth rate, use this formula:

• Subtract your previous number of subscribers from the current number, then divide the result by the previous number of subscribers. The resulting figure is your growth rate, which shows how quickly your subscriber list is expanding.

Monitor Opt-Outs – Churn Rate

It’s natural for some subscribers to opt-out over time, whether they no longer need your service or prefer fewer messages. This is known as churn, or the opt-out rate, and it’s an important metric to track.

To calculate churn:

• Divide the number of subscribers who opt-out by your total number of subscribers.

Measure Campaign Success – Redemption Rate

The effectiveness of your SMS campaign is determined by how many subscribers take action on your call-to-action (CTA). This is known as the redemption rate and indicates whether your campaign is achieving its goals. By tracking this, you can identify which parts of your campaign are working well and which need adjustments.

To calculate the redemption rate:

• Divide the number of subscribers who engage with your CTA by the total number of subscribers in your campaign.

Assess Your Campaign Costs

Understanding your costs is essential to ensuring your campaign remains profitable. If your costs exceed your returns, it’s a sign that something is off. Even if your costs are lower than the redemptions, you may not be generating enough revenue to sustain the campaign long term.

To calculate cost per redemption:

• Take the cost of sending each SMS and divide it by the redemption rate you previously calculated.

These calculations are critical for assessing your SMS marketing ROI and understanding how well your campaign is performing. By examining the results, you can identify which aspects of the campaign are effective and which require optimization. Guessing the performance of your campaign can lead to costly mistakes, but by tracking these metrics, you gain real insights into what’s working and what isn’t. Without this data, you can’t accurately measure which campaigns are driving profits and which should be scrapped.

Still Have Questions?

With this knowledge, you can scale successful campaigns to reach more customers, boosting your ROI. For underperforming campaigns, analyze why they fell short and gain valuable insights into your audience’s preferences and behaviors. The more you understand your customers, the better you can tailor your campaigns to meet their needs.

Follow the practices above to improve client engagement and watch satisfaction rates soar! And check out our other articles for more advice on specific industries and use cases.