You may have heard the phrase, “you can’t manage what you don’t measure.”
Measuring and tracking your SMS performance is the best way to learn about your audience, double down on what works (and get rid of what doesn’t), and take your marketing strategy to the next level.
While not as exciting as creative brainstorming and execution, measuring and analyzing performance right from the beginning of your campaign is critical to get the most from your marketing budget.
Want to track your SMS performance and improve every campaign? Here’s your guide to the most useful key performance indicators for evaluating results.
Key SMS marketing metrics to measure
An effective SMS marketing campaign starts with clear goals. Monitoring the right metrics will enable you to track the progress toward those goals and maximize your marketing efforts.
1. Interaction rate
Interaction rate is a measure of how many subscribers took action after receiving your text message. Common actions include clicks, clicks-to-call, app opens, etc., and it’s expressed as a percentage.
A high interaction rate is a sign that your SMS campaign is relevant to your users, while a low interaction rate means recipients are not acting on your message, and there’s room for improvement.
Tracking interaction rates is the first move towards improving your SMS campaign and getting subscribers to take action. Once you get results, you can iterate and build on your success, or take action to improve low interaction rates.
Formula: (Total clicks / delivered messages) x 100
2. Delivery rate
Your SMS delivery rate is the number of messages that reached a subscriber’s phone divided by the total number of texts sent.
High deliverability rates mean that your texts are successfully reaching their destination. Low deliverability rates could mean a few things:
- Carrier errors
- Invalid numbers or information
- Low SMS Gateway network quality
- Spam filters
Tracking your delivery rate can help you get a better understanding of the quality of your database. If your delivery rate is low, you can clean your list by removing invalid contacts to ensure your messages reach an interested audience. This can boost overall SMS metrics and improve your sender reputation, not to mention save you money!
Formula: (Number of delivered texts / the total number of texts sent) x 100
3. Unsubscribe rate
Your unsubscribe rate tells you the percentage of subscribers who unsubscribed during your campaign.
There are numerous reasons why people unsubscribe from your SMS list:
- They no longer find your messages valuable
- You send too many text messages
- You never got SMS opt-in from the subscriber
- A subscriber doesn’t recognize your businesses phone number
- A subscriber feels your texts are misleading or spam
A high unsubscribe rate could mean several things, such as:
- You’re sending too many texts that fail to resonate with your list
- You’re sending erratic messages (on weird dates and times)
- You never set expectations with the subscriber from the beginning about what they were getting into
If your unsubscribe rate for campaigns continues to increase, review your message cadence, experiment with send times, and communicate your SMS policy to new and existing customers who opt-in.
While it may be tempting to minimize customer expectations about your messages to boost initial subscriber rates, it could hurt you in the long run.
Formula: (opt-outs during campaign / subscribers at beginning of period) x 100
4. Conversion rate
A conversion rate is the percentage of people who completed an action as a direct result of receiving your message. Redeeming a coupon, signing up for a list, and recovering an abandoned cart are all examples of common actions.
If you’re new to SMS marketing, expect higher conversion rates for your campaign in comparison to what you’d see with email. SMS subscriber lists are typically highly engaged audiences; when someone gives you their phone number, they are likely interested in your products or services.
Formula: (# of conversions / # of messages sent) x 100
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5. Customer acquisition costs (CAC)
Customer acquisition cost is the spend required to gain a new customer. It’s calculated by dividing the total cost of your campaign by the number of customers you acquire.
High acquisition costs could mean a few different things. You may be targeting the wrong audience, which drives up the cost of acquisition. Maybe you’re not segmenting your lists properly, so your users aren’t receiving relevant messages.
When you know your CAC, it will provide guidance on adjusting and improving your campaigns. If you’re not seeing the numbers you need, something needs to change.
Formula: Total campaign expenses / total new customers
6. Return on investment (ROI)
As with every marketing campaign, you’ll want to measure the return on investment on your SMS marketing efforts. Fortunately, determining ROI for SMS campaigns can be very precise because you can calculate based on specific incentives.
You can calculate ROI in a way that makes sense for different campaign types: monthly or annually for ongoing campaigns, or at the conclusion of a one-off campaign.
Make sure to always compare your results to your other marketing channels. You never know, maybe you’ll want to increase your SMS budget after seeing the high ROI from a campaign or two!
Formula: (Total Sales – Total Investment) / Total Investment
7. List growth rate
List growth rate is how much your subscriber list increased over the duration of a campaign.
To get the most from your SMS marketing efforts, you want to ensure you’re continuously accruing an engaged list of subscribers to extend your reach, grow your audience, and stay top of mind. There will always be people who unsubscribe or go cold, so it’s essential to track if your list is growing at a good rate for your business.
Formula: New Subscribes – Unsubscribes / Total Subscribers (over a specific period of time or campaign)
How to benchmark and evaluate ongoing SMS campaign performance
A benchmark is a company standard against which you can compare your campaigns over time. Benchmarking helps give your SMS performance data context, so you can easily analyze it and make your marketing budget go further.
1. Create a measurement plan
Before setting goals and metrics, it’s smart to set up a tracking schedule—whether it’s on a weekly, monthly, or per campaign basis. You can check your performance at any time against benchmarks to help spot patterns in a specific customer segment, product, or other variables that could impact campaign performance.
2. Set goals and choose metrics
Once you’ve established your measurement plan, write down your goals for your SMS marketing campaign. Setting goals helps align metrics with business objectives, which better positions you to understand what you’re doing well, and what you may need to improve.
Most businesses use SMS to generate sales, but it can also support other objectives, including:
- Increasing brand awareness
- Educating and entertaining subscribers
- Driving more website traffic
- Generating leads
- Improving webinar registrations
Once you establish goals, you can choose suitable metrics that will help you understand how close you are to reaching them.
3. Record campaigns
If you’ve run previous campaigns, add the metrics mentioned above into a spreadsheet and connect it to a data visualization tool like Databox. You can then analyze your SMS campaigns to determine average delivery, interaction, and conversion rates. This data can be used to develop benchmarks against which your company can measure future campaigns.
4. Create averages
Once you have all your data, calculate the averages for the campaign metrics. Add up the values for each metric, then divide that number by the total amount of campaigns sent during that period.
Here’s an example: if you send three campaigns that get a 35%, 26%, and 39% interaction rate, respectively, your average interaction rate would be (35 + 26 + 39) / 3, which results in an average of 33.33%.
5. Look for patterns in your data
Tracking key metrics means you can use your data to learn what people are responding (or not responding) to, so you can double down on what works. To uncover patterns, ask yourself:
- What types of campaigns tend to perform better than others?
- What messages are leading people to buy?
- What are my delivery rates telling me?
For example, if you want to answer the question, “What call to action (CTA) works best?”, you can look at campaigns with a high conversion rate or interaction rate, then assess the CTAs for similarities. Whatever you find, it’ll spark new ideas for your next campaign.
What tools do you need to track the impact of your SMS campaign?
For years, SMS marketing campaigns were notorious for leaving marketers scrambling for actionable insights. Luckily, ManyChat’s SMS marketing software can help you track how many people act on your messages, setting you up for future success.
Say you’re an online retailer of outdoor goods. When sending SMS campaigns, there are a few key metrics you should keep tabs on because they align with your overall business objectives.
Using a tool like ManyChat, you can track individual messages in your flows to gain insight into your campaigns’ performance.
You can also track conversions and revenue in Messenger by tagging subscribers from your SMS campaign who complete an action.
Using the above method, you can determine the revenue or conversions you generated from an SMS message, which you can use to calculate the total ROI of your campaign.
Improving performance metrics for your next text marketing campaign
Whether you’re a marketer or business owner, tracking analytics for your campaigns is critical to achieving success with your mobile marketing. With these tips in hand, you’re well on your way to boosting revenue from your SMS marketing efforts and growing your business.
For more ways to engage your audience with text message marketing, check out How to Create a Free 7-Day SMS Challenge.