To Text or Not to Text: Does SMS Marketing Work?

New Year's Eve feels like a long time ago. Something that happened that night stuck with me. Don’t worry; it was nothing dramatic. Around 5 p.m., I was looking at mass text messages while most folks were busy lining up babysitters, dusting off their sequined attire, and hoping to secure prosperity in 2024. 

The timing struck me as curious. It would seem people are not focused on shopping or world events in the throes of a nationally celebrated holiday. But yet, in quick succession, I received a political campaign solicitation, an alert for a cookware sale, and an end-of-the-year donation request from a non-profit – all via text. It made me wonder: Why? Why Now? 

“From FY23 to FY24 we have seen a 100 percent increase.”

-Dan Mueller, Chief Development Officer with Milwaukee PBS

Marketers need to cut through the noise and capture attention at every touchpoint. Even before digital, we were keenly aware of when and when not to send press releases or run TV and radio spots. When you’re competing for attention, timing is everything. So, it couldn’t be an accident that I received marketing texts as the entire country was en route to a party. 

Initially, the non-profit message made the most sense to me. Without revealing the sender, I think it’s safe to assume that the organization’s audience skews older and highly educated. Sure, old, smart people like to party. But I’d bet money that a decent percentage of their SMS list prefers a quiet night at home, playing board games, cooking a nice meal, and watching New Year’s Rockin’ Eve from the safe comforts of their couches. Recipients of that text certainly could be receptive to and interested in benefiting from a last-minute tax-deductible charitable contribution. That is an excellent strategy.

The more I thought about it, the more I realized that the digital marketers managing the other two campaigns might employ the same strategy; they know their audiences. Yes, I’m admitting that I fit the demographic above – I’m an aging Gen Xer. 

I paid attention because they caught me at an opportune time. I might not help them clear out end-of-year inventory or make a campaign contribution in the moment as I’m watching LL Cool J and Ryan Seacrest ring in 2024 with my friends. Still, I noticed and remembered the advertising. They would have missed me if they wanted to reach me through almost any other channel other than text that night. 

I don't know how successful these particular campaigns were, but the stats on SMS marketing overall are pretty compelling.  

Everything is Dead. Long Live SMS Marketing?

Clients often ask me if they should invest in SMS marketing. Like many things, my answer is usually, “That depends.” At the risk of sounding evasive, that’s the correct answer. 

Your brand and audiences are unique to you. As technology changes and tried-and-true channels ebb and flow, you must continually evaluate your marketing tactics. 

“Text message marketing is still seen primarily as a way to retain customers versus acquire them. But new advancements are also emerging to boost text messaging to retain and acquire customers and drive more sales from competitors,” wrote Ad Age Senior Writer Lindsay Rittenhouse in a story last year that reported on the resurgence of the tactic. A year later, the growth continues. 

According to a recent Global Conversational Commerce Market Intelligence and Future Growth Dynamics Databook report, “The conversational commerce industry is expected to grow steadily over the forecast period, recording a CAGR of 23.1% during 2022-2028. The global conversational commerce transaction value will increase from US$1,740.8 billion in 2023 to reach US$4,915.1 billion by 2028.”

When you research the efficacy of SMS marketing, you’ll discover a lot of impressive numbers. I recently took a deep dive into the data. I also met with a few friends who are expert marketers and fundraisers. 

My initial research results were almost shocking. Reviews and articles glow with over-the-top positive analyses. I wondered if the only marketing channel should be SMS. The reviews are that strong. The most common, striking claim: Most SMS platform vendors report text campaigns typically yield open rates above 90 percent. If this is true, as a channel, it significantly surpasses the average email open rate for email, which hovers just above 30 percent, according to the Data & Marketing Association. 

It’s important to note that almost all the stats I discovered online derive from content produced by vendors. Even big, reputable business publications quote research and case studies that – if you follow the links – point to vendor websites as original sources. (Way to go, content marketing!) The data is biased. Consistent and hopefully accurate, but biased. For better or worse, everyone seems to be sharing the same stats and drinking the same Kool-Aid, which might be why SMS marketing is booming. 

Textimonials 

So, let’s step back from the data and talk to folks who are using SMS marketing and hear some real-world perspectives. 

“We started using the technology in FY21 and launched it as one of our tools for Giving Tuesday and calendar year-end fundraising. Response has been steadily growing. In fact, from FY23 to FY24 we have seen a 100 percent increase,” reports Dan Mueller, Chief Development Officer with Milwaukee PBS.

The local public television network generally finds that most donors are familiar with and open to conversation marketing. Milwaukee PBS recently further optimized its marketing efforts, leaning more on SMS marketing for member relations beyond fundraising; for example, they send reminders to members when it’s time to update payment information. 

“Our team is exploring how renewal reminder texts can boost all aspects of our retention strategy,” adds Mueller. “We are also encouraged by the success of text-to-give inbound texting. Many members give by texting a code, scanning a QR code to give to the station instead of website visits, or phoning in.”

Switching gears from public media to politics, we are all on the on-ramp to the 2024 election. No matter how you plan to vote, you’re likely seeing an uptick in campaign marketing texts. 

Chuck Engel, Digital Director for the Democratic Party of Wisconsin, agrees with Mueller: “Text marketing works great. The channel allows us to build relationships with our audiences. It’s affordable and convenient for end users to opt in or out.”

Engle cautions that marketers must be strategic and deliberate with SMS marketing efforts. “It’s important that marketers respect the intimacy of text marketing. We can’t bombard audiences with too much of too little; we need to provide substance and demonstrate purpose.”

I talked to a few other marketer friends off the record. Those currently using SMS and conversational marketing plan to grow their investments, devoting a bigger slice to SMS in their 2025 budgets. In fact, an anonymous CTO from a major local online retailer told me that SMS has the potential to beat social media as a growth channel for his company. 

In total, I reached out to eight digital marketing and fundraising professionals to pick their brains. While most gave me a hard time for shopping for pots and pans on New Year’s Eve, the only people who didn’t vouch for SMS marketing were those who hadn’t tested it yet. The key word is yet because everyone was planning to test SMS marketing soon. 

One roadblock a friend shared with me was a need for more data. He simply does not have enough validated phone numbers in his database. He’s not letting that stop him from leveraging conversational marketing. He is actively building lists using opt-in captures via landing pages, e-newsletters, social media, events, and on-premise promotions. I will check back with him after he has enough opt-in phone numbers to give SMS marketing a shot. I’ll report back on his experience. 

Your Numbers Speak Louder Than Words

Despite all the evidence from my unscientific research that credits SMS marketing as a channel champion, my answer to clients, when asked if it works, remains “Depends.” 

Milwaukee PBS is a non-profit with a large, loyal base of engaged members. Political candidates and campaigns inherently operate with urgency and messages of consequence directly aligned with people's values and sense of identity. But this isn’t the case for every organization or brand. Just a hunch, but I’m guessing this isn’t the right channel for a funeral home, for example.

You need to establish your own benchmarks. Especially with the same data from the same sources shared across the internet. Yes, SMS is something most organizations should test if they have an established, documented strategy that conversational marketing can support. 

Marketing in general, should be seen as an experiment that requires a hypothesis, experimentation, and analysis. The good news is that SMS marketing is an affordable experiment. A cursory evaluation of leading SMS and mobile marketing platforms revealed a variety of monetization formats, including flat monthly subscription fees, pay-per-text, pay-per-users, and transactional processing fees. 

Because the platforms vary, it can be difficult to shop by price alone. Several options were priced between $25 and $3,000 per month, which is a wide range. 

Start small but invest enough so that you have a chance to move the needle. Set a time frame; I recommend setting a test campaign that is at least six months long. Evaluate the results. Document open rates, opt-outs, and cost per conversion. Be sure to indicate if you made any adjustments to your campaigns throughout the flight. Associate messages by CTAs, tone, content type, and other attributes so that you can see what works and what doesn’t on a granular level. 

Please share your results with me at the end of your experiment. I’d love to report data that validates, dispels, or otherwise sheds new light on the claims in the market.