The marketer’s guide to SMS marketing strategy | Simon AI

The marketer’s guide to SMS marketing strategy

Author
Toby Yuen
Sr. Customer Success Manager

Remember the last time you got a text from a friend? Chances are, you read it within minutes. Now, imagine harnessing that same instant connection for your brand. That's where SMS marketing can help your brand shine.

SMS is personal, direct, and incredibly effective. With a staggering 97% of messages read within 15 minutes, SMS is a direct line to customers' attention.

But here's the kicker: it's not just about sending texts. It's about sending the right message, to the right person, at the right time. Let's dive into how you can make SMS marketing work for your brand.

Why use SMS for marketing?

SMS marketing is one of the most effective channels in a marketer’s arsenal. Our customers have seen:

Strong engagement rates: SMS boasts an impressive average open rate of 97% and an average click-through rate (CTR) of 20 to 35%. This means that nearly every text message your brand sends is likely to be read, and a substantial percentage of those customers will click on a link, making SMS a reliable way to reach your audience.
Consumer preference and intent: 75% of consumers say they have purchased due to SMS marketing. Additionally, 68% have said they only sign up “for text message communications from brands that I’m confident I want to buy from within the next year.” Consumers who opt-in to receive a brand’s SMS marketing messages are doing so with the intent of purchasing at some point, which makes these opted-in SMS audiences highly valuable.
Extensive reach: In 2023, there were 6.92 billion smartphone users globally. That number is estimated to reach almost 8 billion by 2028. SMS has a broad audience which allows brands to connect with their customers wherever they are, at any time, with the reach expected to grow exponentially.
Business impact: Beyond consumer preference for SMS as a marketing channel, marketers also recognize its potential for delivering favorable business outcomes. Almost 96% of marketers with SMS as a marketing strategy say this channel has helped them drive more revenue. Nearly 60% of marketers say SMS has significantly boosted their revenue.

Both consumers and marketers are recognizing the benefits of SMS marketing. With impressive engagement rates, strong consumer preferences, broad reach, and positive results on businesses, SMS is quickly proving itself to be a marketing powerhouse.

If your marketing team isn’t using SMS as a channel now, it’s something you should look into. It is going to become a must-have channel in the near future.

Personalizing SMS marketing communications

We’ve broached the topic of marketing personalization many times. By now, it’s no surprise to any marketer that consumers expect tailored content from brands.

Leveraging SMS can drive revenue and enhance your marketing efforts by enabling your brand to connect with customers meaningfully. Sending generic SMS marketing messages is sufficient, but personalization will unlock SMS marketing’s true potential. This means maximizing the use of a channel with high engagement rates and broad reach by ensuring the marketing message is specifically for the individual it was meant for.

What personalization can look like in SMS marketing

Have you ever received a text message from a brand that started with your first name? How about one that reminded you to finish purchasing an item you were looking at? You received a personalized SMS marketing message if you answered “yes” to either of these.

Personalization in SMS marketing involves customizing messages to the individual customer based on the data you have on them. Ideally, you could send each customer a unique message based on the data you’ve collected about them. Thanks to AI, this is now a reality. Here’s the data we can use when creating a text message with AI:

Customer name: Starting “Hi, [FirstName]” can make the message feel much more personal, whether receiving a simple welcome message or a purchase confirmation
Demographic: This can be used to send promotions based on collected demographic data. For example, sending your Southern California customers promotions specific to your Southern California stores
Purchase history: You can suggest new products or services based on the customer’s past purchase(s)
Other behaviors: Utilize browsing history to suggest products or nudge the customer to complete their purchase. Abandon cart or abandon browse campaigns fall under this category
Birthday: Acknowledge and celebrate the customer’s birthday with an exclusive promotion
Interests and preferences: Tailor messages based on what you know about customer likes and dislikes. For example, send an SMS promoting a new line of athletic wear to customers who frequently purchase workout gear
When they’re most likely to take action: Analyze data to identify when customers are most receptive to messages
How frequently they buy from you: Adjust the frequency of messages based on purchase patterns. Loyal customers might appreciate exclusive offers or early access to sales, while less frequent buyers could benefit from re-engagement campaigns

Now that you’ve collected all of this data with AI, you can reach your subscribers more effectively and increase the conversion of your campaigns. Brands leveraging Attentive’s AI tools see up to 120% more clicks and 117% more revenue.

Maximizing personalization in SMS with CDPs

Personalization’s primary ingredient is “actionable customer data.” Unfortunately, obtaining this data is a challenge many marketing teams face. Many brands have customer data that is siloed, messy, and complicated to use, or both.

Customer Data Platforms (CDPs) like Simon Data help marketers tap into valuable customer data for SMS marketing by providing a unified customer view and improving segmentation strategies. This enables marketers to understand and optimize the full customer journey from end to end.

While a CDP’s primary purpose is to enable marketers to use customer data for personalized marketing, it also has other benefits, such as allowing you to A/B test, automate cross-channel campaigns, and govern data. SMS Marketing is a powerful tool best used with your general omnichannel strategy.

At Simon, many of our customers use our CDP to execute the following SMS marketing strategies:

Lifecycle marketing messages: At each customer journey stage, you can use SMS marketing to complement other channels. For example, you can deliver a text message to welcome or onboard new customers, remind users that they’ve abandoned their cart or browsing session, or re-engage inactive but previously active customers.
Notifications, alerts, or transactional messages: You can use SMS messages to inform customers about important updates, events, or changes, such as sending a text message for order confirmation, shipping update, appointment reminder, subscription renewal reminder, or price drop alert.

SMS marketing can be used across industries to enhance the customer experience and improve customer satisfaction. Examples include:

Hospitality: check-in and check-out updates, customer feedback/survey
Healthcare: appointment reminder or prescription refill notification
Real estate: property updates, viewing appointment scheduling
Education: campus emergency alerts, event invitations
Health & Fitness: class appointment reminders, membership renewals
Financial Services: transaction alerts, payment reminders

SMS campaign performance metrics

To ensure the success of your SMS campaigns, it’s essential to know which Key Performance Indicators (KPIs) to track.

Delivery Rate: The percentage of SMS messages that are successfully delivered. This indicates a clean contact list and that your messages are reaching their intended audience.
Open Rate: The percentage of delivered SMS messages that are opened. SMS marketing tends to have a high open rate compared to other channels, such as email, but it’s still important to monitor.
Click Through Rate (CTR): The percentage of users who clicked on a link. This helps marketers identify how engaging and compelling the overall content and call to action is.
Unsubscribe (Opt Out) Rate: The percentage of recipients who opt out of your brand’s SMS marketing. Monitoring the unsubscribe rate will help you identify if your audience is healthy and engaged. A spike in opt-outs, for example, could mean you need a better audience segmentation strategy or updated content.

Compliance and regulations for SMS Marketing

SMS marketing tends to complement email marketing strategies. However, they are governed by different regulations to ensure consumer privacy and prevent spam.

SMS marketing is more heavily regulated due to its direct nature. It falls under the Telephone Consumer Protection Act (TCPA) in the United States, which requires businesses to obtain explicit written consent from consumers. Violations could result in fines.

In contrast, email marketing is regulated by the CAN-SPAM Act. While it’s not a best practice, we recommend that the CAN-SPAM Act does not require businesses to obtain explicit written consent like SMS marketing regulations do.

To avoid legal risks and build consumer trust, marketers should consider the following compliance best practices:

Obtain explicit consent (opt-in): Your consumer must explicitly express consent for your brand to send informational and promotional marketing SMS messages. Due to strict regulatory requirements for SMS marketing, many brands use double opt-ins.
Provide a precise opt-out mechanism so there’s a straightforward way for customers to opt-out. Typically, this involves adding a line at the end of each text with instructions such as “Reply STOP to unsubscribe.” It goes without saying, but brands must honor the opt-outs.
Be mindful of time restrictions. Certain countries, including the US, restrict marketing messages to specific time windows. For example, TCPA mandates businesses to send SMS messages between 8am-9pm in the recipient’s local time zone.
Document and maintain consent records. TCPA requires businesses to maintain records of SMS consent. Keeping these records may also be helpful if any complaints arise. Most CDPs, including Simon Data, have built-in features that help businesses comply with data privacy regulations.
Avoid over-messaging. Consider frequency caps to avoid over-saturating your customers with messages. This also prevents spamming and encourages sustained engagement.
Be mindful of the message. Avoid misleading messages or exaggerated claims using deceptive tactics. TCPA emphasizes clear, honest communication.

Please note that this information should not be relied upon as legal advice. We recommend consulting with your business’ legal counsel to finalize an SMS compliance strategy.

Conclusion

SMS marketing has emerged as a powerful tool to help brands reach their audience effectively, immediately, and personally. Businesses that integrate SMS into their marketing strategies are well-positioned for the evolving consumer landscape that relies on texting as their primary means of communication.

Whether in retail/e-commerce, healthcare, hospitality, finance, or another sector, SMS marketing can provide the direct line to your customers that other channels may struggle to deliver. If SMS is not part of your marketing strategy, now is the time to explore this channel. Meet your customers where they are: on their phones.