Messaging • Last Updated 10/5/2023

What is SMS Marketing? Guide to Strategy and Success

SMS marketing, one of the most successful and engaging marketing channels. Here's how you can be successful with your campaigns.

By Risa Takenaka

Person learning about SMS marketing

SMS marketing is one of the best use cases for SMS. Text messaging is a simple and direct communication channel. And SMS messaging is affordable and scales very well.

However, choosing the best SMS marketing platform based on your needs is paramount. The reason being, both the platform and its capabilities can make or break your marketing campaigns.

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To choose the right SMS marketing platform, you must first answer, “What is SMS marketing?”

What is SMS Marketing?

In simple terms, SMS marketing is communicating with customers and potential customers through text messages. SMS marketing is useful at all levels of the marketing funnel, and is affordable, regardless of the size of your customer base. This makes SMS marketing a good fit for a business of any size.

One of the most notable features of SMS marketing is that it’s permission based marketing. A person must willingly give you their phone number and agree to get text messages from you in order for you to text them.

That means they’ve given you explicit permission to market to them.

This stands in stark contrast to interruption marketing, where the advertiser attempts to snag your attention from whatever it is you were doing when their ad appeared.

Most of us are well acquainted with interruption marketing. We’re hit with it every day. Social media ads, website banner ads, and other common advertisements are all forms of interruption marketing that beg for your attention while you’re trying to do something else.

The biggest benefit of using permission marketing, such as text marketing over interruption marketing, is that you invest your advertising resources into customers and prospects who are interested in what you have to offer.

That’s why SMS marketing is so effective. And, since sending SMS messages is remarkably affordable, SMS marketing campaigns can yield a huge return on your investment.

However, you must use the right SMS marketing methods, if you want to get the best results.

How Text Message Marketing Works

There are two main types of SMS marketing:

  1. SMS marketing campaigns. SMS marketing campaigns are essentially bulk SMS messaging. Marketers use SMS marketing campaigns to send promotions, coupons, sales information, and other marketing messages to many recipients at once. It’s a great example of classical one-to-many communication.

  2. Transactional marketing. Transactional SMS marketing is one-to-one marketing. Transactional messages are triggered by some specific behavior, such as sending a text message to ask for more information, placing an order, or contacting a customer service chatbot.

Transactional marketing texts are most often used for order fulfillment (order confirmations, shipping notifications), customer service (text based support), and other activities that happen after the initial purchase, but are still part of the sales process.

However, it’s completely possible to use transactional marketing messages prior to the sale, too. A business could use transactional marketing messages to deliver instructions for placing an order or to schedule sales calls, for example.

To sum up, when you engage in SMS marketing, you’ll either be doing bulk SMS marketing or one-to-one SMS marketing.

It’s worth noting here that both forms of SMS marketing are technically bulk SMS marketing.

Benefits of Sending Bulk Messages

Whether you’re sending SMS marketing campaigns or sending transactional messages, you’re sending bulk SMS messages.

“Bulk SMS” just refers to SMS messages that are sent from an application, rather than manually by a human. Bulk SMS is also called “application to person SMS” or “A2P SMS.” To keep things clear, we’ll stick with “bulk SMS” in this article.

But, no matter what your marketing goals are, there are several benefits of sending bulk SMS marketing messages:

  • Direct communication. SMS marketing is one of the few marketing channels that opens up a direct conversation with the customer. Very few forms of advertising enable the customer to respond to the advertisement immediately, by simply responding to the message.

SMS marketing offers direct one-to-one conversations, which are incredibly powerful because customers can go from first contact to making a purchase with just a few text messages.

  • High customer engagement. SMS messages have incredibly high open rates. Most text messages are opened within 3 minutes. And text messages have a 98% overall open rate.

Additionally, SMS-delivered coupons get redeemed 10-times more often than coupons delivered through other channels. In short, customers will see your messages. And they’re more likely to perform a desired action once they get those messages.

  • Easy to automate and scale. It’s very easy to use a bit of code and automate the process of sending text messages. It’s even possible to automate the process of responding to incoming text messages, to a point (obviously a human has to step in at some point in a true conversation). That makes it incredibly easy and cost efficient to scale your SMS marketing programs up as your business grows.

  • Massive reach. It’s obvious that SMS marketing is mobile friendly. After all, cell phones are the primary means of sending text messages. But there’s a very clear benefit to the mobile-friendly nature of SMS marketing: there are over 14 billion cell phones in the world. That means you can reach a lot of people with SMS marketing.

No matter who your customers are, you can probably communicate with them through text.

  • Near-instant delivery. Most SMS messages are delivered within minutes, if not within seconds, of sending. That means that you’ll start seeing results from your SMS marketing sooner than with most other marketing channels.

However, the near-instant nature of SMS marketing also enables real-time communication. This is related to the first point we made about direct communication. But SMS is the most responsive marketing channel available, which makes it an amazing direct marketing channel.

Obviously, SMS marketing isn’t perfect for everything. But the benefits of SMS marketing certainly make it a good fit in any marketing strategy, even if it’s not the only marketing channel you use.

Potential Drawbacks of Marketing by Text

There’s a lot of upside to using SMS marketing. But what can go wrong? What are the pitfalls to avoid?

  • Message limitations. There are limits on how many SMS messages you can send at a time. This isn’t a deal breaker, but it is important to be aware of messaging limitations that can affect your campaign.

For example, Telnyx enables you to send 1,200 messages per minute per toll-free number. That’s a lot of messages. But, if you only have one toll-free number, it may take some time to send thousands of messages.

The workaround for SMS message limitations is to purchase additional numbers. That way you can send an additional 1,200 messages per minute (if Telnyx is your carrier).

  • Required customer opt-in. Customers MUST opt-in before you can send them SMS marketing messages. This is partially because of regulations, which we’ll cover in the next point.

Keep in mind, this does present an additional step in your marketing process, since you need a method of getting customers to opt-in and give you their phone number. But it’s not impossible.

After all, you have to get similar permission before you can email customers. So there’s already a framework for gathering phone numbers and getting permission to send messages to those customers.

  • Relatively strict regulations. There are multiple sets of laws that govern how you can use SMS for marketing. And it’s vital that you follow them. The penalties for violating SMS marketing laws can be pretty severe.

However, the compliance process can be largely automated. So it can be relatively easy to avoid violating these regulations, if you have the right technology and procedures in place.

We’ll cover compliance a bit further on. For now, just understand that there are regulations to follow.

  • Limited CRO opportunities. Some direct marketing channels have a whole lot of aspects that you can tweak to improve performance. In email marketing, for example, you can change the subject line, preview text, call to action, and other things.

In contrast, all you can really tweak in a text message is the message itself. And you only have 160 characters per message to work with.

SMS marketing still has room for conversion rate optimization, but the opportunities are limited to your message.

All these potential drawbacks are important to consider. But the most important thing to understand is that none of them are deal breakers. These are just things to address before you start sending SMS marketing messages.

Finding the Best SMS Marketing Platform

Choosing the right SMS marketing platform is a critical step in building your SMS marketing program. Otherwise you may not get the SMS marketing services you need to accomplish your marketing goals.

Here’s what you need to consider when you’re evaluating text messaging services for business:

  • Affordable pricing. SMS messaging can be incredibly affordable. Typical rates can range from $.01 to $.04 per message. But some carriers (like Telnyx) are able to offer SMS messaging at less than a penny per text.

As you know, lower SMS message pricing means better marketing ROI. So building on the most affordable SMS marketing platform is a must.

  • Great user experience. Marketing is challenging enough without technology challenges. It’s difficult to achieve success with your SMS marketing campaigns if you’re struggling with your SMS platform.

It should be easy to search and get new SMS numbers, send messages, and use the SMS API. You should be able to handle the technology easily, so you can focus on getting your marketing messages right.

  • Customer support. Even if the platform is easy to use, occasionally you still need help. When that happens, your SMS carrier should be there to help you, no matter when you need help.

Also, the people who are there to help you should be actual experts. That way the tech support expert can walk through issues and problem solve with you, rather than just asking you to try scripted fixes.

  • Compliance guidelines. If you can’t ask your SMS provider about SMS compliance, who can you ask? Your SMS carrier should have SMS compliance resources and automations that make compliance as painless as possible. And they should be able to answer your questions, if you can’t find the answers you need in their self-serve resources.

  • Developer friendly integrations. Your development team has enough to do without the added headache of dealing with a finicky API without support from your SMS provider. Look for developer documentation and easy API integration from your SMS marketing platform. That way your SMS integration doesn’t cause delays in your development cycle.

  • SMS and MMS capabilities. SMS is a very cost efficient texting marketing solution. However, sometimes MMS is a better option. You may not use it all the time. But it’s still important that your SMS marketing platform supports MMS. That keeps all your options open when you create your text marketing campaigns.

Crafting the Perfect Strategy

Your SMS marketing strategy will depend heavily on how your SMS marketing works with your other marketing channels and fits into your overall marketing strategy. However, there are some fundamentals and SMS best practices that will make your SMS marketing strategy successful, regardless of how you use SMS marketing.

Here are the fundamentals and best practices that will help you craft the best SMS marketing strategy:

Choose a Simple Keyword

A keyword is just a word that people can text to your short code number to opt-in to get text messages from you.

Ideally, your keyword should be a single word that’s easy to remember and related to your business. Avoid using special characters. And avoid using a keyword that’s related to your business in a way that your customers won’t understand, like an internal joke or mantra.

Create a Great Auto-Reply Message

Your auto-reply message is the confirmation message that new text subscribers get after they sign up for text messages using your keyword. But it’s also the first impression new text subscribers get. There are four elements to a good auto-reply message:

There are four elements to a good auto-reply message:

  1. Confirm the subscription. Just double check that they wanted to subscribe to your SMS marketing.
  2. Tell new subscribers how often to expect messages from you. This sets expectations. That way customers aren’t disappointed or overwhelmed.
  3. Include opt-out instructions. This is part SMS compliance and part politeness. Regardless of which part you feel is more important, be sure to tell people how to get you to stop texting them.
  4. Offer some value. If you can include a coupon code or a discount as a thank you for subscribing to your text messages, you’ll get quite a few quick wins from your SMS marketing. If you offered a discount as a reward for signing up for text messages, deliver that discount in your auto-reply message.

Use Your Company Name in Your Messages

Most of the time, people will only see the phone number when they get your SMS marketing messages. So it’s important to include who the message is from in the message text, otherwise people won’t know who the message is from.

These are relatively simple best SMS marketing practices that will help make any SMS marketing strategy successful.

But, before you start sending messages using your perfect strategy, you need to make sure your compliance processes are in place.

Rules and Regulations for SMS Marketing

The last piece in the SMS marketing puzzle is compliance. Compliance isn’t the last piece because it’s not important. It’s just that you have to have all your ducks in a row for sending messages before you get too into the weeds of compliance. If you’re not sending any messages, compliance isn’t an issue.

SMS compliance is a big topic. There are several sets of SMS regulations. But these are the main tenets of SMS compliance:

  • Opt-ins and opt-outs. You must get permission from customers before you text them. And you must include instructions for opting out in your text messages.

  • Terms and conditions. Your SMS marketing terms and conditions must be available for customers to read. You must also clearly state where customers can find your terms and conditions, if they wish to read them.

  • Only send messages at appropriate times. Not only is it against the rules to send messages at 3AM on a Wednesday morning, it’s also rude.

  • Identify yourself. Telling people who the message is from is smart from a marketing perspective. But it’s also required for compliance.

Following the SMS rules and regulations is pretty much non-negotiable. SMS compliance is usually enforced through fines. And the fines are pretty steep.

Also, most SMS compliance violations are user reported. If you text people who don’t want to hear from you, it’s likely that they will report you for it. So it’s worth the effort to ensure that your SMS marketing program follows the rules.

With the right strategy, proper compliance processes, and the right SMS marketing platform, SMS marketing can generate a ton of revenue for you.

Build Your SMS Marketing on the Telnyx Platform

If you’re looking for an SMS marketing platform that has all the capabilities and support that you need to build a profitable SMS marketing program, get started with a free Telnyx Mission Control Portal account.

Or speak with a Telnyx expert to get the answers you need.

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