6 Cost-effective SMS Strategies for Retention and ROI

9 Jun
6 Cost-effective SMS Strategies for Retention and ROI

If you’re reading this, you already know that SMS marketing works.

And it’s not hard to believe that 8 out of 10 consumers actually want to receive text messages from brands. SMS is fast, fun and feels more personal than other marketing channels.

But what if you have a large mobile-first audience? Won’t your costs add up sending texts to all of these people?

They might — unless you go about it strategically.

Read on to find six cost-effective SMS strategies that will not only increase your ROI but also save you valuable time.

Let’s dive in!

Why use SMS marketing?

First, let’s talk about why SMS marketing is a big deal for your business.

Did you know that text messages have an average open rate of 98%? That’s more than any other marketing channel out there.

It means customers will open nearly every message you send. For your business, this translates into sky-high engagement, traffic and tons of potential sales.

And that’s not all. A majority (73%) of customers have made a purchase based on a text, and over half of them have done this twice or thrice!

That said, SMS can be deceptively simple and straightforward.

And it’s easy to make costly mistakes.

You need to strategically plan your text campaigns and incorporate best practices to maximize ROI and reduce costs.

Let’s look at six ways to cut costs in SMS marketing while driving customer retention and ROI.


1. Use a reliable SMS platform

Picking the right platform can make all the difference in your SMS marketing success.

The perfect SMS software will streamline the entire process, automating repetitive tasks and keeping everything organized. Better yet, it will ensure your text messages land in the right hands.

Here are some key features to look for in an SMS platform:

  • List management: Go for a platform that lets you create and manage segmented lists based on factors like demographics, preferences and past interactions. This way, you can send super relevant messages to specific groups.
Sendlane segment
  • Message scheduling: Planning your messages in advance is key for staying consistent and nailing the perfect timing. Find a platform that lets you schedule messages according to peak engagement times.
Message scheduling
  • Advanced analytics: Keeping track of your SMS campaigns' performance is a must. Opt for a platform that dishes out insightful analytics such as delivery rates, open rates, click-through rates and conversions. This data helps you fine-tune your campaigns, make smart decisions and step up your overall strategy.
Sendlane campaign overview
  • Unified email + SMS: Bringing together email and SMS can work wonders for your marketing strategy. A platform that offers both helps you run powerful, multi-channel campaigns from a single dashboard.
Sendlane automation

Now, we might be a little biased, but we think Sendlane is one of the best SMS + email platforms out there.

With Sendlane, you get the whole package.

Along with the features mentioned above, you also get:

  • Access to real-time data: Make data-driven decisions by tracking real-time performance metrics like opens, clicks, conversions, reply rate and more.
  • Less logins to remember: Running multiple businesses? Juggling several tools for email and text campaigns? Consolidate everything under one roof with Sendlane.
  • Send time optimization: Target the right customer at the right time using AI. Reduce redundant messaging to prevent unsubscribes and decrease your overall SMS spend.

Want to check it out for yourself? Sign up for a 14-day free trial.

2. Target your messages

SMS users hardly ever unsubscribe.

But receiving irrelevant texts can often force them to do so.

That’s why sending targeted messages is so important.

If you blindly send texts to everyone on your list (aka spray and pray), you’ll see lower customer engagement and might even lose subscibers.

But if your messages are contextually relevant to the end users, you’ll see higher customer retention and ROI in the long run.

So, how can you target your SMS messaging?

Start by segmenting your audience. Divide your subscriber list into smaller groups based on demographics, interests or behavior.

Then, create and send relevant messages to each group to maximize engagement.

For example, let’s say you run an online clothing store and you want to re-engage inactive subscribers. You can create a targeted list by excluding SMS subscribers who:

  • Have made a purchase in the last 30 days
  • Have actively engaged with recent SMSes
Sendlane recent shoppers segment

By zeroing in on genuinely inactive subscribers in need of re-engagement, you can reduce the total number of texts sent, cut down costs and maximize ROI.

3. Keep messages short and simple

When it comes to SMS marketing, brevity is your best friend.

You’re dealing with limited character space, so make every word count.

Standard text messages allow up to 160 characters from the GSM-7 character set. Sending a message with 200 characters means you're essentially spending 2x on your campaign! This example from Beis Travel hits the nail on the head. 

Beis Travel SMS message

Keep your messages within the 160-character limit to avoid unexpected costs. Here are a few tips to help you send short and sweet texts:

  • Use abbreviations and informal language: Don't be afraid to use common short forms and a casual tone to keep your messages concise and relatable. Using informal language can also make your brand feel more approachable and friendly.
  • Spark curiosity to drive action: Instead of giving everything away in your texts, create a sense of intrigue that encourages clicks and engagement. For example, if you’re offering a discount code, link out to it instead of revealing it in the text.
  • Be mindful of using emojis: Adding an emoji can change your SMS into a "Unicode SMS," which can affect the character limit. While emojis can add personality to your texts, use them wisely to keep costs under control.

4. Use behavior-based automations

Automations help you send relevant, targeted messages to subscribers at exactly the right time.

Automated texts are triggered by certain actions, like a customer’s birthday, a purchase or an abandoned cart.

This means you don’t have to manually create and send each message. Simply build a behavior-based SMS workflow and let your software take over.

Your texts will reach customers when they’re warm, leading to higher conversions and engagement.

Want to go deeper? Use contextual data like specific emails or SMS link clicks to trigger highly targeted SMS automations.

Let’s look at an example.

Let’s say a fitness center sends out a weekly newsletter via email with links to different workout classes or offers. By tracking which subscribers clicked on specific links, the fitness center can send relevant SMS messages tailored to the subscribers’ interests.

For instance, if a subscriber clicked on a link for a yoga class, the fitness center might send them a text like:

"Hi, VAR_FIRST_NAME, We saw that you're interested in our Yoga classes. Why not give it a try with a free class pass? Use code YOGAFREE at signup. Reserve your spot now: [link]"

Use Sendlane’s automation templates to create high-converting workflows instantly. Simply tweak the existing structure till it fits your needs.

You can choose from the following pre-built flows:

  • Welcome
  • Post-purchase
  • Winback
  • Cart abandonment
  • Browse abandonment
  • Product recommendation
  • Ask for a review (coming soon!)

Or, build a custom automation from scratch! It’s just as easy.

5. Personalize your messages

Personalization isn’t just an email buzzword. You can also apply the same tactics to your texts to amplify their impact.

SMS personalization shows customers you truly understand their needs and preferences, making them feel valued and special.

Here’s how to send personalized messages that make your customers go “Wow, they really get me!”:

  • Address customers by their name

"Hi, John! Don't miss our latest collection of smartwatches. We think you'll love them. Check them out here: [link]"

  • Recommend products based on past purchases

"Hey Sarah, since you loved our vegan protein powder, we thought you might be interested in our new vegan protein bars. Give them a try: [link]"

  • Send birthday messages or holiday greetings

"Happy Birthday, Emma! 🎂 We're celebrating with you! Enjoy a special 20% off coupon just for today. Use code BDAY20 at checkout: [link]"

  • Provide loyalty rewards to frequent customers

"Thank you for being a loyal customer, David! As a token of our appreciation, here's a $10 voucher to use on your next purchase. Redeem now: [link]"

You can also leverage data collected from quizzes, forms and tags to customize your SMS offerings and messages.

For example, if your sign form collects the subscriber’s location, use this data to send regional event alerts or invites. Here’s an example:

"Hey Anna, we're hosting a women's networking event in Chicago this weekend! Don't miss this opportunity to connect with like-minded professionals. RSVP here: [link]”

6. Run incrementality tests (RCT)

Want to know how your SMS campaigns are performing? Run incrementality tests.

In an incrementality test (also called Randomized Controlled Trial or RCT), you split your audience into two groups at random. One group gets sent your SMS campaign, while the other (the control group) stays blissfully unaware.

Then, you measure the behavior of both groups. By comparing the actions of your campaign-exposed audience to those in the control group, you can reveal the real impact of your marketing campaign.

For instance, let’s say you want to measure the effectiveness of a promotional SMS for your home decor store. You might find that Group A (who received your promotional text) had a 10% increase in purchases compared to Group B (who didn’t get your SMS.)

Now, you know exactly how your text contributed to your SMS retention, marketing and overall business goals: increased sales by 10%.

Running incrementality tests helps you optimize your SMS strategies, ensuring you spend your hard-earned dollars wisely.


Optimize your SMS marketing budget with Sendlane

SMS marketing works — but it’s easy to lose money over common mistakes like poor targeting, generic messaging and using subpar software.

Save money and drive customer loyalty, increase retention and boost ROI with Sendlane’s marketing platform.

Combine the power of text messaging with email, and take advantage of features like advanced segmentation, multivariate testing, custom automations and more!

Ready to try it for yourself? Sign up for our 14-day free trial and take it for a test drive!

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