SMS marketing

What is SMS marketing: Your guide to the ecommerce industry’s fastest growing marketing channel

Emily Riedy, October 28th 2022
A table of people learning about SMS marketing

On average, ecommerce brands using SMS marketing as part of their integrated marketing strategy are seeing 2.5% conversion rates on SMS marketing forms––to collect phone numbers––8.33% click rates on their SMS campaigns, according to Klaviyo data as of Q1 2022.

These brands are, of course, also driving more revenue through their SMS marketing program, but they are also driving more revenue from their owned marketing channels in general.

This is because SMS marketing shouldn’t be a batch and blast channel that lives silo-ed from the rest of your marketing activities. No, great SMS marketing is used in combination with email marketing and personalized on-site experiences to create unparalleled customer experiences that increase average order value––AOV––and retention.

SMS marketing shouldn’t be a batch and blast channel that lives silo-ed from the rest of your marketing activities.

In all, SMS or text marketing is about building genuine relationships with your customer. Once you understand the types of text message marketing available for brand communication, you can optimize the channel and target your most engaged segments.

Keep reading to learn:

What is SMS marketing and what does it actually mean?

SMS marketing is the act of a business sending text message campaigns, promotions, news, updates and more to customers who have opted in.

The term “SMS,” stands for “short message service” and brands use this form of communication to interact with their customers on a more personal level.

SMS or text marketing has several early adopters, including Gary Vaynerchuk who has been blown away by the results.

This is the most powerful sh*t I’ve seen since early email.

Gary Vaynerchuk

“This is the most powerful sh*t I’ve seen since early email,” he remarks on Community’s website. “From somebody who has hundreds of thousands of people on text, I’m getting 98% open and 90% engagement.

Like email marketing, SMS is an owned channel. This means you have complete control over who receives an SMS marketing message, what content you share, and when you decide to send it.

With text marketing, you have ownership over the experience you create for your customers across this marketing channel from start to finish.

Besides SMS messages, you can also send your customers MMS––multimedia message service––messages. MMS are text messages sent that have pictures or GIFs––and other animated images––embedded within them.

SMS and MMS text messaging campaigns tips and best practices

What are the types of SMS marketing?

When you implement SMS messaging as part of your marketing strategy, there are two types of communications you might send to your audience: promotional and transactional text messages.

Promotional SMS marketing via text messages

Promotional SMS marketing includes messages or texts sent to your audience to increase sales, promote a product, or build brand awareness. These can be one-off SMS campaigns or built-out as workflows via SMS automations––similar to how you can send campaigns versus flows in email marketing.

You can use these kinds of messages to let your customers know about the launch of a new product, offer a special sale or promotion, share company announcements, promote branded events, and even provide tips on how to best use the products you’re selling.

A promotional text marketing message from Each & Every.

Event-triggered promotional SMS messages are communications you can send to your customers based on the actions they take on your website.

If a shopper signs up to receive text messages from your brand or adds an item to their cart on your website, you could send them a welcome text or an abandoned cart text to encourage them to place an order. In fact, these types of SMS workflows are among the most profitable, according to Klaviyo research across 400 SMS accounts.

Transactional SMS marketing via text messages

Transactional SMS marketing includes messages or texts that contain information your customers need, like order confirmation details or shipping information. If a customer makes a purchase, texting them delivery updates could be a great way to keep them informed and build customer loyalty.

Here is an example of a transactional SMS marketing message from South Bay Vet Group with shipping information.

Transactional SMS messages are pretty simple, and unlike emails, there’s not a lot of creative liberty you can take with transactional texts in terms of content or design.

One thing to note: If your customer or website visitor signs up to receive transactional text messages, you can’t market to them through this channel unless they explicitly give you their consent to do so. That doesn’t mean that collecting phone numbers and building your transactional SMS marketing list isn’t worth it. Transactional SMS helps the customer experience, keeping them up to date with where their product is, and can building loyalty along the way. These used to be considered a nice-to-have, but now that Shopify makes it easy for brands to include their option at checkout, it is becoming an industry-standard customers just expect.

Read more SMS marketing myths.

Is this new text marketing channel effective: 3 benefits of SMS marketing

All trends for SMS marketing messages suggest it is one of the most effective channels for targeting consumers. There are a lot of reasons for that. Let’s look at each one.

1. High text open rates and increased customer engagement 

SMS elicits exceptional engagement numbers—think 98% open rates.

While this number may seem exciting, remember that a lot of consumers may only open a text message to get rid of the notification on their phones. That’s why it’s important to place more value on engagement metrics like clicks and conversions.

The good news? Depending on the content you share with your audience, text messages can outperform email on both click rates and conversion rates. For example, GhostBed sees 32% click rates with their SMS messages. Remember, average SMS click rates in Q1 2022 were 8.3%.

Text messages are often conversational––or at least, you can automate them to be––which means you can encourage your subscribers to respond to your texts, too.

Quick tip:

If you wouldn’t send your text message to a friend, consider not sending it at all.
Use this as your standard for sending and you’ll create meaningful text conversations with all your customers.

2. Text message marketing allows brands to reach customers instantly

People often read texts quickly once they receive them. In fact, they open 90% of them within three minutes.

If you have a special offer you want your subscribers to take action on immediately, notifying them via email means they may miss your message and not act in time to drive the results you want to see.

Instead, if you send them this timely business message via text, they are more likely to see it sooner and take the action you’d like them to take.

Example:
You want to let your existing customers know that in one hour, they can shop a sale before the general public. A text message is the best way to relay this information quickly.

3. SMS marketing creates more personal customer relationships

Texting is how people communicate with their friends and loved ones, which means their phones are often only an arm’s length away.

You can use SMS as a more exclusive channel, similar to a VIP program, to communicate with your highly engaged segment of customers since texting is so personal.

Example:
Let people who sign up to get your text messages be among the first to know about your new products and special sales.

When should ecommerce businesses use text message marketing?

Text message marketing is an opportunity for you to deepen your relationships with your customers, but there are a few things to keep in mind as you get started.

Because it’s a more intimate channel than email, you need to think critically and strategically about which messages you send to your SMS subscribers and how often you send them. Text messages are a great way to build brand loyalty, but you can also lose your customers faster if you abuse this channel.

The more familiar you become with SMS and collect data on what your subscribers respond to, the better you’ll understand how to navigate texting your customers.

3 steps to get your SMS marketing program started

While you need to think strategically about how to use and integrate SMS marketing in your existing marketing mix and strategy, there are some basic things you can do now to nail your SMS marketing program. In a deep dive into 400 Klaviyo SMS accounts, all of the most successful accounts are doing these 3 things:

Use SMS forms for compliance

How you collect phone numbers from your customers is crucial to your SMS marketing program––and to your compliance! Here are the 4 things the most successful SMS marketing brands are doing when collecting information:

  • They set up multi-step forms to properly educate the subscriber and remain compliant.
  • They create unique mobile and desktop versions, and A/B test each.
  • They offer a percent discount for a signup, and deliver on that discount immediately.
  • They use elegant design and imagery that matches their brand look and feel.

Create SMS automations––or flows

The most successful brands using Klaviyo SMS have all 4 of these flows, or SMS automations, setup and running.

  • Dedicated SMS welcome series
  • Abandoned cart SMS
  • Browse abandonment SMS
  • Customer winback or inventory alerts

Start with SMS campaigns

And, with SMS campaigns, the most successful brands––i.e. the brands driving the most revenue through SMS marketing––are using SMS campaigns to compliment their email marketing efforts in the following ways:

  • Sending 2-3 per week
  • Announcing sales
  • Using holidays
  • Promoting new products

As consumers look to brands to serve them more personalized communications and ecommerce marketers focus on creating stronger connections with customers, SMS will be essential for brands that want to stand out, deepen engagement, and create exceptional customer experiences. Choosing the right SMS platform will also be important.

SMS marketing FAQs

Still not sure if SMS marketing is right for your brand? Let’s walk through several of the most commonly asked SMS marketing questions to help ease any concerns.

Does SMS marketing really work?

Yes, SMS marketing really works.

In a recent Klaviyo study of ~2,000 US consumers, 75% of them said they purchased because of a branded text message in the last year. More, 55% of those consumers said they had made more than one purchase because of a text message.

According to Klaviyo’s SMS marketing benchmarks, the average revenue per text message sent is $0.11. That might not seem like much, but benchmarks are averages and averages only. Of Klaviyo’s more than 10,000 SMS customers, several thousand of them are making far more per text––especially as they invest more time into thoughtful and strategic sms marketing programs.

What are the types of SMS marketing?

There are three main types of SMS marketing:

  1. Promotional SMS marketing: This type of SMS marketing alerts customers to deals and sales, and works to build brand loyalty.
  2. Transactional SMS marketing: This type of SMS marketing delivers order confirmation, shipping confirmation, and delivery confirmation messages.
  3. Two-way SMS marketing: This type of SMS marketing is considered conversational, and is typically used for support services in which customers and a support agent can have an active conversation. Many Klaviyo customers use our Zendesk integration to make this work easily for their teams.

Find more SMS marketing integrations that work for your business and your tech stack.

How do I run SMS marketing?

Many brands get started with SMS marketing by turning on transactional SMS marketing. These are some of the most preferred SMS messages from brands by consumers because they tell consumers when their product is arriving.

Brands also often begin an SMS marketing program by:

  • Messaging their existing email list and encouraging them to sign up for VIP deals via SMS
  • Launching a pop-up on the website offering a percent discount for new purchasers when signing up for SMS

Both of these help to build your SMS marketing list, which is the very first step of running SMS marketing programs.

Keep in mind that consumers like both SMS marketing and email marketing, rather than a brand taking a one or the other approach.

Is SMS marketing free?

SMS marketing is not free because sending text messages is not free. In the same way you must pay for a cell phone plan with a carrier like Verizon that allows you to send text messages, brands must also purchase a number of credits to send text messages to consumers.

For brands using Klaviyo, all of our plans are allocated a number of SMS credits. You can use your credits toward any combination of SMS and MMS messages (a text message over 160 characters or containing an image or GIF). The number of credits required to send an SMS or MMS message varies depending on the country you are sending the message to.

Here is a quick breakdown:

  • USA
    SMS = 1 credit
    MMS = 3 credits
  • Canada
    SMS = 3 credits
    MMS = 5 credits
  • UK
    SMS = 5 credits
    MMS = N/A
  • AUS
    SMS = 4 credits
    MMS = N/A
  • NZ
    SMS = 10 credits
    MMS = N/A

You can always purchase more SMS credits, and Klaviyo will never upgrade you or charge you without your consent. 

Best SMS Marketing platforms and services for an omni-channel experience

Ready to get started with SMS marketing but have more questions? Check out these tips on SMS to fast-track your strategy or read these SMS FAQs to get your questions answered.

Emily Riedy
Emily Riedy
Content strategist
Emily Riedy is a content strategist at Klaviyo. She creates and optimizes content to help online businesses own their growth. Before joining Klaviyo, Emily worked at a digital marketing agency where she created content to help small business owners and marketers grow their online advertising presence. When she’s not writing, Emily enjoys making tacos, running, and sipping on orange wine.