Digital Guide

Is SMS marketing dead?

This question has been asked every year for as long as most of us can remember.

There seems to be an assumption that it’s only a matter of time before SMS marketing is replaced entirely by newer channels like push notifications and social messengers like WhatsApp.

Whilst that hasn’t happened, and won’t happen anytime soon, it is fair to say that SMS is underused (compared to email, for example). Back in 2018, global I.T. consultants, Gartner reported that 60% of the enterprises they surveyed (out of 185) said they did not use it in any form.

Interestingly, two-thirds of those companies said they had plans to use it over the next 12-24 months. 

The resurgence of SMS as a marketing channel goes hand-in-hand with the rise of mobile marketing more generally, and it should be seen in the same light as the likes of push notifications and in-app messages.

As you can see in the chart below, use of SMS marketing campaigns is a clear indication of a brand’s mobile maturity and strategy.

It’s worth noting that those companies using SMS also lead the way in other aspects of mobile marketing. If you send SMS messages, it seems that you are almost twice as likely to also send push notifications as those who don’t.

The key takeaway here is that brands who are actively seeking to invest in a mobile-centric strategy recognise that SMS had a vital role to play in rounding out the range of tactics used to connect with customers.

So why have the others been slow, or reluctant, to adopt SMS tactics?

There is in certain quarters a level of snobbery about SMS. For some, it’s just an “old-fashioned” method of communicating that doesn’t offer brands the same creative freedom as other channels do.

But these criticisms really miss the brilliance of SMS marketing campaigns and mistake its simplicity as a limitation. The fact is that customers engage with it and in huge numbers. That’s all it needs to do!

Why has SMS marketing lasted so long?

The quick answer? It works! SMS campaigns deliver consistently high open rates (over 90%) and engagement rates time after time. 

Typically, we also observe that the majority of SMS messages are opened within 3 minutes of delivery. That lends an exceptional immediacy to your communications.

But from a practical point of view, here are 3 reasons why SMS has stood the test of time.

• Global consumer adoption

Email runs it closest, but no other channel can touch SMS for its global reach. In all but the most remotest parts of the world, people use SMS to communicate.

• Always available

SMS is not reliant on an internet connection and doesn’t require the recipient to download an application. From both a consumer and a brand perspective, SMS is convenient.

• Reliable delivery

SMS messages are not reliant on data to be sent and received, like a WhatsApp message is for example. They are also sent using what’s known as a “store and forward” mechanism. This means that the message will eventually be delivered, even if the recipient’s phone cannot be reached immediately due to connectivity issues.

• Fast and efficient

In terms of delivery, SMS is pretty quick, but from a marketer’s perspective it’s also very easy to design and launch SMS campaigns. Although it is becoming more sophisticated as a channel (as we’ll see later on in this article), consumers don’t expect a visual element. This means you can focus on your messaging and get it out to your audience quickly.

Examples of how brands use SMS Marketing

Brands across every vertical use SMS messaging to engage with their customers. Below are some of the most common use cases. Across all of them, it’s clear that SMS is chosen due to its reliability and high level of engagement. Few other channels carry the weight and urgency of an SMS message. 

• Important service updates

If you need to change your opening hours at late-notice, or just have a crucial piece of information to share with your customers then SMS is an ideal choice. 

• Security checks

It is common to see brands send security checks via SMS if there is a suggestion that a user’s account has been compromised. Again, the immediacy of the channel is important here, as you want to reach the customer as soon possible to verify the situation. 

• Sales promotions

From last-minute deals to seasonal campaigns, and whether you are a multinational enterprise or a local independent store, SMS is a powerful way to let customers know about your latest deals and offer.

• Customer feedback request

As it’s a very personal channel, we often see brands using SMS to request customer reviews or to solicit feedback. The message will contain a hyperlink to a dedicated survey capture page.

Check out another post we’ve written on best practices for SMS marketing to get more value from it.

Despite its varied usage, we need to be objective too; SMS is not suitable for every type of campaign. If you want to present multiple CTAs, or simply have more to say than the 160 character limit will permit, then an SMS message won’t suffice.These aren’t necessarily problems, just worth keeping its limitations in mind.

Choosing a bulk SMS service provider

There is a wide variety of service providers out there that offer SMS. Here are some of the factors worth investigating when making your selection.

Reliability

It’s all about uptime. You can’t afford to partner with a supplier who has regular disruptions to their service. At Xtremepush, our typical Service Level Agreement outlines a 99.9% uptime all year around. 

Scalability

You may want to start small, but who knows how important SMS will become for your brand? The problem with many of the cheaper, smaller SMS suppliers is that they cannot consistently handle large volumes, which will limit your long-term capacity to scale. At which point, you will have to change providers.

Campaign creation

As we’ve said, one of the advantages of SMS is its simplicity. It’s still important that whatever service provider you go with has an easy-to-use creation tool. Not only will it save your team a lot of time, it will also give you a real sense of how each campaign will actually appear to your customers. 

Automation

If you intend to send a large volume of messages, then naturally you will need some level of automation to support this. A sophisticated scheduling tool is vital, allowing you to trigger real-time messages when a customer takes a particular action.

Delivery rates

Networks are rightly concerned with eliminating fraudulent SMS messages, with increasingly stringent tests in place to guard against spam. Working with a well-established service provider, known to the network carriers, means your messages have the best possible chance of reaching their intended target. 

Integrations

If you are using a CRM system or have a loyalty platform, for example, then naturally you will want to integrate it with your SMS service. This will make campaign segmentation much easier, giving you greater control over who receives a message and when. 

Personalisation

Dynamic content makes personalisation possible at scale, so be sure to ask if it’s supported.

How personalised can an SMS message be?

Right now, the goal of every brand is to create one-to-one marketing campaigns that speak to customers on an individual level. It’s all about communications that reflect the unique interests and behaviour of each customer in your database.

And while channels like email, onsite/ in-app messages and push notifications tend to be seen as the best examples of this, they certainly aren’t the only ways to achieve it.

Despite what you may have assumed, it is possible to deliver a high level of personalisation through SMS messaging.

For bulk and automated campaigns, you can still include personal details like a customer’s name, the specific item they’ve purchased or when their appointment is.

As most marketers now realise, the most important personalisation for promotional messaging is done through audience segmentation anyway. If you are using a robust platform, it’s just as easy to segment your SMS campaigns as it is for any other channel.

How can you convince customers to opt in for SMS marketing and stay GDPR compliant?

If you want to send promotional SMS campaigns then steadily growing your list of subscribers is going to be a priority.

That’s easier said than done though.

As it’s a deeply personal channel, which many of us reserve for communicating with family members and close friends, you need to be careful with how you use you ask for permission. Many consumers are wary about which brands they are willing to share their number with in the first place. 

We all fear our phone number being abused by spammers and scammers. If you want to build up your subscriber list for this channel you must build out a high level of trust.

In any case, GDPR (and similar pieces of legislation around the world) have made respecting the privacy of our customers a non-negotiable. Whilst enforcers look closely at unsolicited marketing activity across all channels, SMS comes in for extra scrutiny.

When requesting permission to send an SMS message there are a few rules of thumb that we advise you to keep in mind to optimise your list and stay on the right side of the legislation.

• Be open and upfront about your intentions and stick to them i.e. “We’ll only use your number to send you personalised offers”.
• Make it as easy to opt in as possible – using shortcodes, for example.
• Offer an exclusive deal for anyone who opts in for SMS marketing
• Add a specific SMS marketing checkbox to online order/purchase forms
• Always seek, and keep a clear record of, permission from the customer for each category of message you intend to send (ie. service and marketing)
• Make it clear and obvious how a customer can unsubscribe or opt-out
• Never purchase a list of numbers; it’s just not worth the risk!

If you are concerned about your brand’s ability to meet its legal requirements where privacy laws are concerned then get in touch with us. This is an area we are vastly experienced in, with a dedicated Data Protection Officer on hand to offer advice. Our engagement platform also features a purpose-built compliance module to make multichannel permission-management easy.

The value of SMS in multichannel campaigns

As effective as SMS undoubtedly is by itself, its real value is often felt when used in combination with other channels.

When our clients are building cross-channel customer journeys and campaigns, they will frequently include SMS at key touchpoints. For example, if during a promotional campaign the prospect has not engaged with the emails or push notifications they’ve received, an SMS message will be sent as a final “last-chance” to connect because it’s such a high-percentage channel.

Typically, you’ll also see SMS used to deliver timely reminders on the day of an appointment, even if that appointment was made online. Email might be the preferred method of sending the transactional receipt, but it doesn’t have the same sense of urgency or visibility.

SMS in a multichannel environment

• An outstanding “fallback” communications channel, when the customer cannot be reached through an online method, or has ignored previous communications.
• Consumers typically view SMS as a highly secure and trustworthy channel. This makes it an ideal method of sending sensitive and/or urgent information (like passcodes or warnings of suspected security breaches, appointment and delivery times etc).
  

Is SMS Marketing expensive?

It’s important when assessing the suitability of SMS for your brand that you are aware of the costs associated with it. Fundamentally, it is more expensive to send a campaign through SMS than through other popular channels. The rates also vary hugely from country to country. This is certainly one possible reason why brands are reluctant to use it.

And if you want to use a dedicated shortcode that is unique to your brand that is going to cost more than a shared shortcode.

The cost of SMS marketing, however, should be weighed against the impact and ROI it delivers. Whilst it may be more expensive than email, for example, it does offer far higher engagement rates.

How can you reduce the cost of SMS marketing?

Negotiating the lowest possible price for bulk SMS credits is one of the reasons it makes sense to partner with a well-established service provider. That service provider can also help you to source a dedicated shortcode at a better price too.

If you are working to a strict budget, we would also recommend limiting your use of SMS only to direct revenue-generating campaigns where there is a demonstrable ROI.

What are SMS shortcodes?

A shortcode is 5 or 6 digit numerical code that is used by brands to optimise the delivery rate of their bulk SMS campaigns. 

Shortcodes are also used to allow customers to quickly opt in to receive promotional SMS campaigns. When you see messages that say something like “Text YES to 12345 to receive personalised discounts and offers”, that’s an example of a shortcode in action.

Check our blog for more in-depth information on SMS shortcodes.

SMS VS MMS; WHAT’S THE DIFFERENCE?

MMS stands for Multimedia Messaging Service. Essentially, when you include any multimedia element in your SMS (like an audio file, an image or a gif) it becomes an MMS.

As you can see in the image below, MMS allows you to create campaigns that more closely resemble our experience using online messaging platforms.

We’ve noted that SMS has a 160 character limit per message, but MMS allows you to include up to 1000. Obviously, this gives you plenty more room to create a compelling offer. At the same time, there’s something to be said for the brevity that SMS imposes. Sometimes less is more. SMS marketing works so well because of its “short and sweet” nature. Just because you have extra characters to play around with, that doesn’t mean you need to use them.

The major advantage that MMS has is that it gives you the creative freedom to share images, audio files and videos. SMS limits you to alphanumeric content (just letters and numbers).

However, these multimedia MMS messages rely on the recipient using their data. And whilst some customers may be on large or unlimited data plans, you certainly wouldn’t want to run the risk of not being able to reach some customers.

RCS: The future of SMS Marketing?

Rich Communications Service (RCS) may well represent the future of SMS, from a marketing and non-marketing perspective.

RCS is a protocol that has been in development for over a decade, but has to be adopted by all carriers. As platforms like WhatsApp and Facebook Messenger continue to grow in popularity and dominate the text messaging industry, RCS represents the best chance of universally available service fighting back.

RCS combines many of the features we associate with these modern messaging platforms; group chat, video messaging, support of high-res multimedia, CTA buttons, location-sharing and so on. It’s expected that this service will be available “out of the box” across all devices before 2021. It’s big advantage will be that users across all networks will be able to send and receive MMS messages without downloading a particular app.

The development of RCS has been driven by a desire from network carriers to reclaim some of the text-messaging market share they’ve lost in the last 10 years. It has taken the weight of Google however to really push it forward on Android devices. Consumers using iPhones already have something similar in iMessage. However, this is of course limited to interactions between Apple customers.

For brands who wish they could do more with SMS, RCS may be the perfect solution. It will certainly be interesting to see if it can actually deliver on that promise. 

One thing to note, from a security point of view, is that RCS, like SMS, will not support end-to-end encryption. This leaves it open to exploitation from scammers and could prove its downfall.