July 15, 2020
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Data and Case Studies to Help You Take Advantage of This 26X ROI Channel
Guaranteeing 4X ROI on a new marketing channel might sound like early Facebook Advertising days, but the average Postscript customer earns 26X ROI in just a few months with ecommerce SMS.
So, 4X ROI? That’s baseline.
Ecommerce SMS to date has over a 95% open rate and a 35% click through rate, compared with 20% and 2.5% for email marketing. This channel is every marketer’s dream: it empowers you to meet your customer where they are at (on their phone), with the message they want to receive (okay, we may need to work on this part).
Clearly, the benefits of SMS marketing extend beyond those associated with a typical marketing strategy—like display ads or podcast sponsorships. This is a way to personally connect with customers in a 1:1 format, enhance the customer experience, increase loyalty, drive engagement, and grow revenue.
It is still early days for SMS as a marketing channel, meaning it's still a highly effective tool to cut through the noise of overcrowded channels like Instagram, Facebook, and Google. But what you say, and when, matters—a lot. Send too many texts, and your subscribers might opt out. Send too few, and you’ll leave potential revenue on the table.
Let’s review the organization-wide benefits of ecommerce SMS to help you build a perfectly balanced messaging strategy for this new, highly-profitable channel.
1. High open rate and click-through rate.
The #1 marketing challenge for brands is getting in front of the customer with the right message at the right time. This has been the ephemeral question for marketing since its inception, and over time, a variety of different strategies have been more or less successful.
Email marketing remains high on any marketer’s list as a valuable channel. After all, these folks have opted in and you can easily measure their engagement against your own internal benchmarks as well as that of the industry.
Yet, common email marketing open rates and click-through rates look astoundingly low when you compare them side-by-side with ecommerce SMS open rates and click-through rates.
Email marketing: For email, you are looking at 20% open rates for what is considered a good email, and 2% to 2.5% click-through rate.
Ecommerce SMS: For ecommerce SMS, upward of 90% open rates can be expected, with a 35% click-through rate.
Additionally, to a consumer, text messages feel more time sensitive than emails—so they tend to open them more quickly.
Want to get in front of your customer faster and more frequently than you can with pretty much any other marketing channel? Then you need to try ecommerce SMS. It is the only channel with consistently high engagement rates and easy attribution (which we’ll cover a bit more in a moment).
“I can't stress the importance of SMS marketing enough because of how astounding the numbers are in comparison to email. On average, a great email list will get 20% open rate and a 2% CTR. We're seeing closer to 90% open rates on SMS and 20% CTR,” says John Lim, CEO, AZN FLUSH. "Those clicks aren't just visits either. We're seeing great conversion rates and, on a per message basis, SMS is outperforming email for us.”
2. Affordable marketing channel.
Ecommerce SMS is also one of the most affordable marketing channels currently available. Similar to SEO and email marketing, once you set up common automations like welcome series, abandoned cart alerts, and important cross-sells, you can let it run for a few months before you need to look at the numbers and determine what you can do to optimize. Beyond that, you aren’t having to pay for your customer’s attention here like you would through paid marketing channels like influencer marketing or digital advertising.
Perhaps it is the low cost to getting started that contributes to the average 26X ROI, but that shouldn’t matter. Such a high average ROI means that, if implemented properly, your brand could turn ecommerce SMS into a massive money-maker for your brand, nearly overnight. What other marketing channel has that ability?
3. Attribution is straightforward.
For some channels, like social media for instance, it can be incredibly difficult to track attribution. Sure, a potential customer can click a link and head to the site—and your Google Analytics dashboard will show you if it was organic or paid social.
But, more often than not, that potential customer will see your Facebook Ad, then Google your product, and end up on your site via organic search or direct. That consumer behavior makes tracking the ROI of your Facebook Ads really difficult.
Not so with ecommerce SMS, which is much more comparable to email marketing: specific and trackable URLs, easy-to-use shortcodes, and an opt-in process that makes the ecommerce SMS message more landing page-like in its delivery (i.e., there is only one CTA and not a lot of distraction on the channel).
4. Reduces cart abandonment.
What would your business look like if you had an extra $33 for every abandoned cart? That’s exactly what happened with Nomatic after they implemented ecommerce SMS for abandoned cart messages.
After ramping up to 47,000 compliant subscribers in 10 months, their ROI skyrocketed to over 37x and earnings per message (EPM) on abandoned cart campaigns jumped to $33.
Simple ecommerce SMS campaigns like this are often already set up in your SMS tool or software, and even in Shopify itself. All it takes it a little massaging to make the messaging work for your brand.
5. 1:1 conversations with customers drive loyalty.
In ecommerce, we often talk about loyalty as though it is a holy grail. And while it is incredibly important, we often glaze over exactly what is meant by loyalty. To have a loyal audience, you need to have built a relationship with that audience.
The best way to build relationships? Well, that’s 1:1 conversations.
SMS is one of the only ecommerce marketing tools out there that allows for 1:1 communication. And it allows for it where 1:1 communication is already expected—on your smartphone.
Compare this with potential 1:1 conversation via a chatbot on a site. After you get through the bot and finally to a person, there is still a difference in how you communicate. This person on the chatbot is here to help, often with an issue, rather than give you valuable information or insight.
Via text messaging, our expectations are different. On that channel, we expect 1:1 conversations and the sharing of information that helps us to become our better selves (not just to solve an issue).
“We often talk about how personal text is, and how that personal connection allows for deeper connections and loyalty with a brand,” says Andrew Capland, Head of Growth, Postscript. “It also puts more responsibility on the brand to respect the personal nature and not oversend or spam. Ecommerce SMS is an incredible tool in that way to develop those close, personal connections and relationships that drive loyalty.”
6. Alert customers about new products, sales + promotions, announcements, and more via text messages.
Speaking of consumer text messaging expectations, the best way to use ecommerce SMS is to alert customers to new products, new drops (even better if they are *only* for the SMS audience), sales, promotions, and other branded announcements.
The immediacy of the channel also makes it great for running a flash sale or delivering a time sensitive discount code or coupon. In some cases, you may be able to drive sales directly from the message itself.
For instance, 310 Nutrition implemented a Reply-to-Buy texting option for frictionless upsells to existing customers. Each text sent generated $2.65 for the brand, on average. They also saw a near immediate jump in revenue, with $100,000 attributable to the ecommerce SMS channel.
What did they do? Simple: told customers about related products to the one they had already ordered. More information, on the right channel, at the right time. It works.
7. Reply-to-buy and conversational commerce are powerful.
When chatbots were first introduced to the market, the industry was obsessed. Customers—surprise!—actually used the chatting tool to ask questions, get in touch, and more. The big benefit here? The perceived ability to get in contact with someone who works at the brand as quickly as possible.
The same is true with ecommerce SMS, except someone doesn’t have to come to your site, first. Instead, you push the marketing out to them to start the conversation. Encourage them to reply to buy (easy!), or ask questions to build your relationship.
You can set up conversational commerce similar to a chatbot, or integrate it with your existing tools to get new customer messages into your customer support or sales folks’ inboxes.
8. Use SMS to win back customers who haven't purchased in quite some time.
Winback campaigns are hard. How do you segment your list appropriately to talk to customers who haven't purchased with you in quite some time without annoying them? Well, there are a lot of options.
For instance, you can send annual “First Purchase Anniversary” updates like Native and Pura Vida Bracelets. The VP of Marketing at Common Thread Collective, Aaron Orendorff, absolutely loves this tactic.
“Native and Pura Vida Bracelets each execute SMS masterfully. Unlike their emails lists (where brands can get away with more frequent communication), I only get texts for (1) major product releases—as related to my previous orders—(2) major sales, and (3) major events in my life (i.e., my birthday and the “anniversary” of my first purchase). Huge hat tip to Pura Vida on that last one. That basically nets out to one text every 2-3 months for each company, outside of order confirmations and shipping notifications.”
It’s a great way to stay top of mind annually, without making your marketing feel too inauthentic or random.
There are other ways to go about this as well, but a quick text reminder that is personalized to the individual and relevant to their history with your brand is a very good start in getting them back to checkout.
9. Keep customers in the loop with shipping notifications.
The #1 thing customers want after they complete checkout with your brand? Their item, of course. This means that the #1 thing they pay attention to is where that item is en route to their front door.
Using ecommerce SMS for shipping updates is great both for the brand and the customers. No longer do customers have to dig through tons of emails to find their shipping confirmation. They can just click right from the device they always have in their hands (87% of millennials always have their phones, for instance). For you as a brand, this is a great opportunity to prove out the value of your text messages to the customer, and build an expectation for branded communication.
Honestly, if you do nothing else, shipping notifications via SMS are a must.
10. Ecommerce SMS can be highly automated.
Are you staying away from ecommerce SMS marketing because you already have too much on your plate? Because it just seems like a lot more work? This is not necessarily true. Platforms like Postscript have pre-built nurtures and flows that you can launch pretty immediately to begin testing this channel.
Better yet, these flows are set up to manage opt-ins and opt-outs in a compliant way, so any customers who decide they don’t want your SMS messages can easily stop them.
The biggest hurdle your brand might have is adding SMS messaging T&Cs to your website. Seriously, that’s it.
11. You can build segments of your most loyal customers.
Ecommerce SMS may be best used for your most loyal customers. Your super fans. These people are your ambassadors, and you should treat them as such. Give them exclusive access to drops. Invite them to exclusive events. Get them access to exclusive people.
Whatever you do, make it clear that not everyone gets this opportunity. And, make it fun and worth it. Notify them of the moment via SMS, which makes sure they see the message, and builds a habit around what type of messages your brand sends (meaning these folks will engage with even more of them in the future).
12. Managing compliance isn’t a headache anymore.
Are rules around SMS compliance scaring you away from 26X ROI? Don’t let them. Platforms like Postscript take on the heavy lifting when it comes to compliance. You can launch one-click-to-opt-in mobile pop-ups, use smart links for email and social, and of course allow for click-to-text opt ins (and opt outs!) all without having to lift a finger.
These features are baked into these platforms. All you have to do is update your terms and conditions, launch your programs, begin building your list, and figure out exactly what and when to talk to your base. Everything else from a compliance stand-point is automated.
13. You don’t have to start from scratch.
Using Shopify like most online businesses in the U.S.? Great! Ecommerce SMS tools and platforms like Postscript already integrate into Shopify, so you can begin using the tool and all of its pre-built nurture streams right now.
You can even easily segment your Shopify customer data to build lists based on previous activity—no new data reports or deep dives needed.
Not on Shopify? Not to worry. Open APIs allow for easy integration so you can use the tool no matter what platform or custom build you are using to grow your audience and build your brand.
14. Have two-way conversations.
Talk directly with customers 1:1 inside ecommerce SMS platforms like Postscript. You can answer any questions, handle customer support, close sales via SMS, or forward communications to your support email and manage everything in one place.
In other words, ecommerce SMS isn’t just a chatbot. It is a push marketing system that allows for conversational SMS (just like you have with friends and family on a regular basis!) that gets problems solved, builds loyalty, and drives revenue.
15. Track revenue and ROI.
Speaking of revenue, it is important to be able to track revenue and ROI of your ecommerce SMS marketing channel. This is one area where Shopify’s built-in system for shipping notifications falls short.
If you are planning on spending time to get an ecommerce SMS marketing channel up and running, and you are using a platform that guarantees a 4X ROI, you better be able to track that ROI. Luckily, tools like Postscript make that incredibly easy, showing you open rates and click-thru rates on campaigns and individual messages.
Still not convinced SMS marketing is right for your ecommerce business? Let's run through a few more commonly asked questions.
Ecommerce SMS Marketing FAQs
How can sending SMS notifications to your customers help grow an ecommerce business?
Sending SMS notifications to your customers helps to grow your business because ecommerce SMS has a 90% open rate and more than 20% click-through rate. Compare that to email marketing that has a 20% open rate and a 2% click-through rate.
What are the benefits of using SMS marketing for an ecommerce site?
The benefits of ecommerce SMS marketing are increased revenue, brand engagement, customer loyalty, improved customer service and customer experience, and conversational interaction.
What are the benefits of using an SMS automation service?
Using an SMS automation service like Postscript drastically reduces the time it takes to build out and set up an SMS marketing channel for your ecommerce business. With pre-built nurture streams, compliant opt-in and opt-outs and more, you can hit the ground running in under a day’s time.
What are the benefits of using an SMS marketing platform built for ecommerce?
The reason to use an SMS marketing platform built for ecommerce is the same reason why you use an ecommerce platform for your business: the platform is built for your specific needs.
What is the ROI of SMS marketing for ecommerce?
Ecommerce SMS marketing ROI differs by brand, but tools like Postscript guarantee a 4X ROI—with their customers averaging a 26X ROI. Either way, it’s better than most of your paid social ads.
Real SMS Marketing Results from Real Brands
The time is now to get started with ecommerce SMS marketing campaigns. The numbers speak for themselves (and the automations make it easier to launch than an email marketing campaign):
More than $87k in revenue monthly
More than $42k with 7 automations
More than 10k compliant opt-ins
More than 47,000 complaint opt-ins
$33 earnings per message (EPM) for abandoned cart campaigns
310 Nutrition saw:
More than $100k revenue/Week
More than 75k compliant opt-ins
Ready to make SMS your brand's #1 revenue channel? Get started with your free trial of Postscript here, or request a demo of our platform here.