What is SMS Marketing?

Chapter 1 – What is SMS Marketing?
Chapter 2 – Growing your Opt-In List
Chapter 3 – Creating Great Text Campaigns
Chapter 4 – Increasing SMS Engagement
Chapter 5 – Measuring & Scaling Marketing Performance
Chapter 6 – Choosing an SMS Marketing Solution

What exactly is SMS marketing?

With 3.8 billion smartphone users worldwide and 95% of texts being opened within three minutes, it’s clear that texting has become a dominant way we communicate. What’s more, local businesses have quickly recognised its potential.

SMS marketing involves using text messages to convert potential leads and keep customers actively involved. Normally, these messages are limited to 160 characters and require prior consent from your customers to send.

These messages can include a variety of multimedia elements such as images, videos, GIFs, and links. It’s crucial to adhere to relevant regulations in both the sender’s and recipient’s countries.

Some local businesses may have concerns that SMS marketing software is too complex to implement or worry that promotional texts might irritate customers and damage relationships. However, when executed correctly, SMS marketing can serve as a valuable asset and a way to boost your business’s revenue.

When managed effectively, SMS marketing has the potential to improve relationships by encouraging customer responses. With timely and pertinent messages, SMS marketing fosters a more personal connection than other methods, nurturing ongoing engagement in a distinctive manner. The key lies in crafting the right messages to cater to your customers.

By leveraging the power of SMS marketing, small businesses can significantly boost engagement and build deeper relationships with their customers. When approached with thought and care, this method of communication opens up incredible opportunities for growth. The key is figuring out how to message customers the right way.

Differentiating bulk messaging vs. SMS marketing

Bulk messaging allows for the widespread distribution of text messages to mobile phones, usually in one direction. This approach may lack personalisation and could potentially violate local regulations if used for marketing without recipient consent.

On the other hand, SMS marketing entails sending personalised promotional or transactional messages directly to customers via text. This method prioritises customising each message for the individual recipient, fostering a more intimate and compelling form of communication. SMS marketing presents an exciting opportunity for your business to engage customers on a more personal level, ensuring a more meaningful interaction.

In this guide, we will focus on SMS marketing and how it can benefit your business. This includes how to make mass text messages into valuable, personalised communications to spark engagement and foster continuous dialogue with your audience.

Transactional vs. promotional text messages

How do we define transactional texts and promotional messages?

Transactional Messages

Transactional messages are vital for facilitating seamless interactions with your customers. These messages serve as your responses to customer interactions and include important updates such as payment invoices, shipping notifications, and support responses. For example, when customers order food through our app, they can look forward to receiving timely SMS updates from the delivery driver, keeping them informed about the status of their order.

Promotional Messages

On the other hand, promotional messages are intended to communicate just that—promotions. This may include anything from coupon codes to special offers and discounts. Promotional messages can also include business updates that are not directly related to a specific customer interaction, such as announcements about new locations, extended hours, or upcoming events.

You can design SMS marketing campaigns for various types of promotional messages. Following best practices for promotional messaging ensures compliance and maximises effectiveness. When in doubt, always consider the nature of your message and how it aligns with your overall marketing strategy.

By understanding and implementing these strategies, you can effectively use SMS marketing to enhance your business’s customer engagement and drive growth.

Glossary

SMS marketing involves its own set of unique terms and phrases that are commonly used. If you’re new to this form of marketing, here are some essential terms and definitions to help you get started:

Short Message Service (SMS): These are short text messages that are completely in text without any media.
Multimedia Messaging Service (MMS): These are text messages that include media such as pictures, videos, GIFs, and links.
SMS Keyword: These are text messages that contain specific words or phrases customers text to your business to opt-in to your text marketing messages.
Call to Action (CTA): This pertains to the action you want your target audience to take after receiving your message. Examples include replying to your messages, visiting your business’s website, leaving a business review, or calling your business.
Click-Through Rate (CTR): The percentage of recipients who click on a link or respond to the CTA in your SMS marketing message.
Conversion Rate: This is the percentage of recipients who complete the desired action prompted by your CTA.
Opt-In (vb): The act of giving consent for a business to send you text messages. (n) A customer who has opted in.
Opt-Out Rate/Unsubscribe Rate: The percentage of subscribers who choose to stop receiving text messages from your business.
Spam Act: The Spam Act 2003 is an Australian law that regulates commercial electronic messages, prohibiting the sending of unsolicited messages with an Australian link. Meanwhile, Spam Regulations 2001 protects people from receiving spam and regulates email, SMS, MMS, and instant messages.
Quick Response Code (QR Code): This is a scannable image that directs users to your SMS marketing sign-up page. These codes can be used in various formats, including print and digital, making them ideal for gathering opt-ins online, face-to-face, or in-store.
Texting Service Software: A platform that allows you to manage SMS marketing campaigns, conversations, and opt-ins effectively.
Short Code: A 5-6 digit number used to send SMS or MMS messages, typically used for one-way bulk messaging and more expensive to maintain than long codes.
Long Code: A 10-digit number used to send SMS and MMS messages or make calls, giving messages a more personal appearance as if they were sent by an individual.
Personalisation Variable: Dynamic fields that pull specific information into SMS messages to tailor them to each recipient, such as their first name or a location-specific offer.

With the right tools and knowledge, SMS marketing can be incredibly effective for businesses of all sizes. Keep reading to discover best practices, compliance guidelines, and strategies for crafting compelling messages that get a response.

Defining SMS marketing

As a consumer, you’re likely aware of the overwhelming amount of marketing materials received daily, leading to desensitisation. Studies indicate that consumers are no longer as receptive to traditional marketing methods as they once were.

Local businesses need innovative ways to reach customers to facilitate personalised and valuable interactions. In today’s digitally-driven world, consumers expect modern, convenient, and personalised communication. This is where text messaging excels.

Text messages boast an impressive open rate of up to 98%, with 95% of messages being opened within three minutes on average. This high engagement makes SMS a powerful tool for modern marketing.

Leveraging SMS as your business’s marketing option

While many consumers still interact with businesses through phone calls or emails, this is often because they believe these are the only available options. In reality, nearly 67% of consumers think that being able to text businesses would significantly increase convenience.

Consider this: if you’re still relying on phone calls or emails, but 98% of your customers read texts on the same day they receive them, there’s a huge opportunity to leverage SMS marketing, which offers far greater potential than other mediums.

Local businesses have a distinct advantage when it comes to SMS marketing. According to the 2022 Local Business Messaging Trends report, local businesses are better positioned to reach their customers via text messages more frequently than major chains or e-commerce companies.

Consumers are 21% more likely to opt into text promotions from local businesses compared to major chains or big-box retailers. They are also 45% more likely to opt into texts from local businesses over online or e-commerce companies.

Local businesses enjoy a level of trust with consumers that can be leveraged to gather opt-ins and strengthen relationships through well-timed, personalised promotions. This leads to increased customer loyalty, more business, and higher revenue.

Additionally, SMS marketing is one of the most cost-effective strategies available to local businesses. Compared to other digital marketing campaigns, SMS campaigns are relatively low-cost, allowing businesses to engage new leads and enhance customer lifetime value with minimal expenses. Recent data also indicates that offering texting options can directly boost a local business’s revenue.

The unique advantages of SMS marketing vs. email marketing

Much like email campaigns, SMS marketing relies on a curated list of contacts and offers trackable insights into customer behaviour. However, unlike emails, SMS marketing reaches customers instantly, meeting them where they prefer to be contacted.

While emails have an average open rate of 18%, their engagement levels are significantly lower. Emails typically see a click-through rate of just 2.6% and a click-to-open rate of 14.1%. In stark contrast, text messages boast an open rate of up to 98%, demonstrating vastly superior engagement.

Another reason why SMS should be your top marketing choice? The future of customer communication lies in SMS marketing. It’s a make-or-break strategy that meets the evolving needs of consumers.

Consumer preference: 40.5% of customers report being “likely” or “very likely” to switch to a different business if it offers text messaging as a communication option. This shift highlights the growing importance of convenience and speed in customer interactions.
Instant engagement: Text messages are read almost immediately, ensuring that your message reaches your audience promptly and effectively. This makes it the ideal tool for reaching customers and increasing engagement.

By leveraging the immediacy and high engagement rates of SMS marketing, your business can enhance customer communication and drive better results compared to traditional email campaigns.

Watch our demo here to learn more about SMS marketing for your business and how Podium can help.

IMPORTANT DISCLAIMER: It’s crucial to remember that while this guide offers valuable insights, it is not intended as legal advice. Businesses should consult with legal counsel to understand the implications of their specific text messaging strategies and ensure compliance with all applicable laws and regulations.

This guide is for informational purposes only and is not intended as legal advice. Businesses are encouraged to consult with their own legal counsel to review this guide and assess their unique text messaging scenarios. Misuse of the Podium system or any text messaging platform can lead to liabilities beyond those addressed in this guide.