Texting isn’t just for teenagers locked in a cyber romance who can’t go a few hours without talking. We can leave modern-day Romeos and Juliets out of the rest of this article, but we might be able to learn something from them.
Just as teens can reach their friends and partners at the tap of a finger, ecommerce businesses can instantly reach their customers with SMS marketing.
You may not be sending “i miss u :(” to your customers, but you may find that a message like, “We’ve missed you! Have you seen our deals lately?” is just as effective at engaging your audience.
But SMS marketing is more than promotional “please-buy-our-product” texts.
And the greatest benefit of SMS marketing is its ability to increase customer lifetime value. In brief, directly (and respectfully) tapping into your customers’ sphere builds top-of-mind awareness, engagement, and loyalty.
In this article, we’ll go into why it’s smart to add SMS marketing to the mix, the types of texts you can benefit from, the best and not-so-best ways to use SMS, and how texting fits into your business.
7 Benefits of SMS Marketing to Increase CLV
Why is SMS marketing so effective at increasing CLV?
A good SMS strategy targets the four retention KPIs most important to customer lifetime value: length of relationship, purchase frequency, purchase recency, and AOV (average order value).
And, in essence, text marketing is an expressway to your most dedicated customers, bypassing all other routes of reaching them besides showing up at their front door.
1. Streamlined Messaging
SMS marketing combines easy access, short messages, fast delivery, and direct communication for a streamlined experience.
It doesn’t hurt that customers receiving your texts are more likely to read them because they’re less intrusive than using a separate app and less time-consuming than reading a longer email. Or that almost all your customers have a mobile phone that receives text messages.
And while SMS messaging isn’t technically instant messaging (which requires an internet connection), it’s pretty darn close. Quick delivery means this channel is also perfect for sending information about time-sensitive events, promotions, and follow-ups.
2. More Trusting Customers
Like email marketing, SMS is more personal than social media and digital advertising. Part of this is because you can tailor the message to different segments of your subscriber list.
But for customers to even provide their phone number, they have to trust your brand and want to hear from you. That means your subscriber list is, for the most part, a concentrated pool of your most loyal customers.
Combining willing customers with personalized messaging builds a bond that’s bound to increase your CLV.
Giving customers the ability to opt out of your messages at any time is also a good way to build trust. Although their departure is unfortunate for your business, customers see an easy opt-out option as trustworthy and respectable.
3. Higher Message Visibility
While customers are more likely to read SMS messages because they’re fast and in their pocket, text as a medium is simply more visible.
Think about how many emails you get daily, how many you ignore or get buried, and how many you delete before opening. You can’t say the same for text messages, which have a 98% open rate and are read by 60% of customers within five minutes of receiving them.
As a personable medium, text messages capture more of your customers’ attention than your average ad or TV placement. And, as they opted in to receive your texts, you can expect most to open your messages.
4. Top-of-Mind Awareness
SMS communication is the quick, bite-sized way to achieve higher exposure and top-of-mind brand awareness.
By strategically sending texts over time, your brand will be actively or subconsciously floating around your customers’ minds until it’s time to purchase.
5. Opportunity to Send Useful Updates
Your marketing strategy should strive to provide a seamless and positive customer experience. SMS marketing allows you to do just that by providing easily accessible information about customer orders.
In a world of automation, you can send texts to customers who need order updates as they need them, including confirmations, next steps, and shipping and delivery status.
Another great way to provide value to your customers is by setting up a live text conversation so they can give feedback and ask questions about their order and your business.
6. Collaboration With Other Channels
You can use other channels to grow and support your SMS subscriber list—and vice versa.
For instance, you can ask already loyal customers if they’d like to receive SMS messages at the checkout of an online order, on social media, or in an email.
For those already subscribed, an interaction with an email, like clicking a link, could trigger a relevant automated text, or you can follow up an unopened email with a text.
You can also send texts that shout out your social media, apps, or helpful content.
At the end of the day, text interactions provide customer data you can use to further customize their experience across channels, such as updating their website view to improve the likelihood of an additional purchase.
7. High Cost-Effectiveness
One of the advantages of SMS marketing is how high the potential ROI is between paying a few cents per text and the near guarantee that your customer will open it.
Of course, other factors can drive up the cost, including:
- Hiring an SMS copywriter
- Sending international SMS messages
- Sending MMS (Multimedia Messaging Service) messages with GIFs, images, videos, or audio files
Still, even a more expensive SMS strategy can result in higher CLVs and increased profit.
Types of SMS Messages to Improve Your Customer Relationships
A balanced SMS marketing diet of promotional, transactional, conversational, and engagement-centered texts will improve your retention metrics.
Promotional texts increase brand awareness, purchase frequency, purchase recency, and AOV by, well, promoting your offerings.
Promotional messages you can send include:
- Company news and events
- New product alerts and personalized recommendations
- Special or timely promotions
- Abandoned cart reminders to reclaim sales you might have otherwise lost
- Cross-selling and upselling (promoting complement items and upgraded versions)
- Follow-ups to encourage purchasing a product again (especially when they may be running low)
- Loyalty benefits, like VIP upgrades, exclusive deals, birthday rewards, and points reminders
A transactional SMS message automatically informs a customer about their order, appointment, or payment status. These messages build CLV by acting as a type of customer service and improving their experience.
In the customer’s eyes, transactional texts are often more desirable than promotional texts because they provide useful and sometimes necessary information or reminders.
Some types of transactional texts include:
- Order confirmations and receipts
- Shipping and delivery status updates, including delays
- Appointment scheduling, confirmations, and reminders
- Subscription renewal reminders
- Alerts for items back in stock
Conversational Support Messages
Conversational or two-way SMS messages allow your brand to interact with your customers in real time to address complaints, questions, and other feedback. With direct customer contact, conversational texts can boost your CLV by showing your business is attentive and committed to getting the customer what they need.
Conversational text messages act as a quicker customer support service than call or email. You can also request a product or experience review, opening a dialogue that allows the customer to voice their opinions.
You might have real customer service representatives responding to customers, or you may use natural language processing (NLP) to answer customers automatically with AI. You can even use a combination of the two, where a real human picks up the slack when the AI doesn’t understand complex issues.
However, automated responses for SMS can be complex, costly, and risky when trying to build lasting customer relationships. Read our article on how chatbots affect user experience to learn more about the risks and rewards of using AI.
Engagement messages include engaging content that doesn’t encourage a purchase or offer updates about an order.
These are texts you can send to add value and strengthen your customer bonds until you become their go to brand, like:
- Fun quizzes, trivia, challenges, or things to do
- Tips and tutorials
- Blogs, guides, or podcasts
If you’re a makeup brand, you might give makeup tutorials that can include your products but don’t require them to follow along (mascara is mascara).
Fashion brands can help people find their unique style through a quiz.
A cookware company can share free recipes.
You get the picture.
Interactive texts, like quizzes, also allow you to gather further insight that you can apply to your segmentation and personalization efforts going forward.
What About Text to Order?
Another type of SMS interaction is text to order, a campaign that turns SMS messaging into an ecommerce channel for fast and simplified purchases.
You can combine all the previous types of SMS messages to improve the text-to-order experience.
For example, your promotional texts can prompt buying over text, while transactional texts keep customers updated on their order. You can then follow up with conversational texts to gather feedback on the customer’s text-to-order experience and improve future transactions.
The Dos and Don’ts of SMS Marketing for CLV
When it comes to such a personal aspect of your customers’ lives, there are many right and wrong ways to use SMS marketing.
Do Personalize, but Don’t Send Unwanted Texts
Like building any relationship, increasing CLV comes with understanding your audience and treating them like people. Pulling data from your customer data platform is a good way to build customer profiles and segment your subscriber list for successful campaigns.
Among some of the most important pieces of data you should have to personalize your texts are:
- Buying preferences
- Buying behaviors
Furthermore, you don’t want to junk their text message inbox with useless or mistargeted messages.
A non-personalized message can result in customers feeling like your brand isn’t for them. And even a well-targeted message sent at the wrong time—like 11 p.m. on a Tuesday—will only annoy your customers, prompting a quick opt-out.
Mind you, getting too personal can get creepy, so put yourself in the customer’s shoes before you send. If they never told you about their dog Spot, you probably shouldn’t bring him up.
Do Follow the Law, and Don’t Text Without Express Customer Consent
The Telephone Consumer Protection Act limits how businesses can reach customers’ phone numbers. With SMS marketing, you need explicit customer consent to text them (i.e., they’ll need to opt in before you can hit them up). You also need to make it very clear that the customer can opt out at any time (you know, “text ‘STOP’ to opt out”).
If you don’t have that consent, it’s best not to wrangle with federal law.
Do Add Value, but Don’t Spam
Sending sales, deals, and personal recommendations to the customer is valuable—to an extent. You don’t want to overstay your welcome by sending multiple texts per day.
Exclusive benefits and offers to loyal customers are a wonderful surprise. But getting ten in a week may diminish their value at best and cause a customer to unsubscribe at worst.
Do Be Brief, but Don’t Compromise Your Branding
SMS is brief by nature, so texts should be brief to fit in. Plus, brevity is easy to consume. Your customers are likely to ignore anything longer than the standard 160 characters.
And while you can pay to send longer texts, if you can’t get your message across in 160 characters, SMS may not be the appropriate channel for the message. (It is a “Short Message Service,” after all.)
But being short doesn’t mean comprising your brand. Text is still a touchpoint that should stick to the same brand voice as every other touchpoint in your customer journey. In fact, the friendly and conversational nature of text makes it the best place to practice the more open and fun tone variants of your voice.
Do Grow Your List, but Don’t Forget About Retention
A healthy list always has enough subscribers to warrant maintaining an SMS marketing channel. And the more customers you can get to join your retention campaign, the better.
That means you’ll want to grow your list by encouraging customers and prospects to opt in at different touchpoints.
At the same time, don’t ignore your current text subscribers. Many of them are your ride-or-dies—and your SMS channel won’t do much for you if you’re not actually sending messages.
Do Track KPIs, but Don’t Ignore Your Main Goals
As with any marketing tactic, an SMS strategy’s success depends on the metrics you choose to follow and what you do with them. Standard metrics to track include:
- List growth rate
- Unsubscribe rate
- Open rate
- Delivery rate
- Response rate
- Clickthrough rate
- Conversion rate
Your metrics have to measure what your goals are trying to achieve. For example, a high list growth rate may seem like an indicator of success. But if you want to increase your CLV, high growth won’t solve a retention problem with a high unsubscribe rate.
And as with any messaging you release to your audience, we encourage A/B testing to identify which versions of your SMS messages your customers react to better.
Do Integrate Your Other Channels, but Don’t Make Your Message Redundant
Your master SMS strategy doesn’t (and shouldn’t) exist in a vacuum. Using your other channels to support your text tactics can improve the customer’s experience and unify your brand.
For example, you can add value by following up a phone conversation with a customer service survey over text. Or you can ask them if they follow your social media accounts and encourage them to follow.
But whatever you do to cross over your channels, be wary of repeating the same message in the same way. Your customers will quickly get irritated that they’ve seen a message before, especially if it doesn’t add value.
Do Allow Interactivity, but Don’t Ignore Incoming Texts
Employing conversational texts in your strategy is an excellent way to bond with customers and build trust. But it’s also an opportunity to lose their trust if you miss their questions and ignore complaints.
We recommend implementing two-way text communication only if you’re sure you can manage it consistently and effectively.
Does SMS Marketing Make Sense for Your Audience?
You might think SMS marketing isn’t right for your business if your target audience is older—but think again. Ninety-two percent of 65+ Americans own a cellphone of some kind, and the numbers only go up the younger the population.
Even customers with disabilities can find value in SMS marketing, so long as you use accessible design in your messages, opt-in locations, and opt-out practices that follow the Web Content Accessibility Guidelines (WCAG) and the Americans with Disabilities Act (ADA).
However, if your primary audience is children, SMS marketing isn’t your best avenue. Laws like the Children’s Online Privacy Protection Act restrict online marketing to children.
Does SMS Marketing Make Sense for Your Industry?
Regardless of your industry or whether you’re a B2B or DTC brand, your ecommerce company can benefit from texting. Check out some of the SMS uses by industry below.
Restaurant and Food
- Delivery updates and order confirmations
- Customer preference quizzes
- Dietary restriction surveys
Travel and Hospitality
- Reservation reminders and updates
- Cancellations and checkouts
- Local recommendations and links to guides
- Appointment confirmations and reminders
- Prescription pickup and refill reminders
- Rescheduling and cancellations
- Account activity notifications
- Payment confirmations
- Double confirmation for login
FAQs About SMS Marketing
What is SMS marketing?
SMS marketing stands for “Short Message Service” and involves sending text messages about promotions, order updates, and more to customers who have opted to receive them.
How can SMS marketing help to grow a business?
SMS marketing improves customer retention and lifetime value by building relationships with your customers through a more direct and personal channel. You increase revenue with appropriately timed text messages that build top-of-mind awareness and encourage spending.
Why is SMS marketing better than email?
SMS marketing has some advantages—like a higher open rate—that make it appear better than email, but a smart business uses both as part of their omnichannel strategy.
What are the risks of SMS marketing?
SMS marketing comes with risks when done poorly, like customers having decreased trust in your brand due to poor texting practices or non-personalized messaging.
Is SMS cost-effective?
SMS marketing can be highly cost-effective because of the low cost per text message and high ROI in the form of increased purchases, AOV, loyalty, and overall CLV.
So, Do You Opt In?
In such a cluttered digital world, your ecommerce business stands to benefit on a path that cuts through the noise.
SMS is an opportunity to connect directly with your most engaged customers about their orders, concerns, and desires. It’s a chance to learn more about them and put that data toward better targeted marketing. It’s a way to provide value in exchange for increased awareness and loyalty.
If you can leverage the SMS channel alongside others in your marketing mix, you’ll see increases in your key retention metrics, and your CLV will soar.