What is SMS Marketing, And How Does it Work?

SMS messaging (more commonly known as texting) is one of the most frequently used feature on smartphones. This means something very specific for marketers: If you have a message to get out, text messaging marketing (or SMS marketing) may just be the best way to share it. Read on to learn about mobile marketing tools and strategies to succeed with SMS.

What you’ll learn:

• What is SMS marketing?
• Why does SMS marketing matter?
• What benefits does SMS marketing offer?
• How can you utilise SMS marketing for your business?
• SMS marketing strategy examples
• How do you decide which SMS marketing tool works best for you?
• How Salesforce Marketing Cloud can help?
• FAQs

SMS marketing, stands for ‘short message service marketing,’ and is a marketing strategy businesses and organisations use to send customers automated text messages for promotional, informational, or transactional marketing purposes such as special offers, appointment reminders, and alerts. SMS marketing is not limited to just businesses but also organisations as well. For example, the local police may send messages to people in a local area to ask them if they’ve seen a missing person.

We often think of them as promotional, but businesses also send messages via SMS for informational or transactional purposes.

Here are some examples of when you may encounter SMS marketing:

• Special offers: Businesses send you limited-only discounts and exclusive offers, like a discount for bathroom refitting or an upcoming sale at the local store.
• Appointment reminders: Notifications for dentist, doctor, or other upcoming appointments.
• Confirmations: Confirmations of recent purchases, with tracking info or other post-purchase actions like feedback surveys.
• Receipts: For example, a brick-and-mortar store may send an automated digital receipt.
• Alerts: Local public service announcements, like weather warnings or changes to trash collection days.
• Other categories of notifications: For example, notices of property inspections if you are a tenant. Or, perhaps you’ve signed up for neighbourhood updates or asked your bank to send regular updates on banking activity.
• Scams or spam: Unfortunately, many of us have also received SMS messages from bad actors who obtain our numbers for more nefarious purposes.

While most people associate SMS marketing with promotional activities, businesses can use this marketing channel for a variety of functions.

Generally, SMS (text) marketing, also known as text messaging marketing or just text marketing, involves an opt-in stage. This is where users send a text to an automated system in order to have updates, discount codes and other news sent directly to their phone. When the customer sends the initial message, an SMS marketing software solution stores the customer’s phone number in a database. The software then generally sends a confirmation text. The number is then retrieved and used whenever relevant marketing information can be shared. Clients retain the right to opt out of further messages at any time.

People receive marketing messages from various channels, which can be overwhelming for consumers. The choice also presents a challenge for marketers: which is the best channel to use to reach your audience?

In a world of plenty for marketers, SMS marketing stands out:

• High open rates, significantly higher than email marketing.
• Immediate communication. Most people read their messages very quickly, allowing for timely engagement opportunities.
• Direct and personal. An SMS message goes directly from the brand to the consumer’s pocket, with no filter of a platform in between. This makes it the most personal channel.
• Mobile devices are pretty ubiquitous, which means a wide reach. SMS marketing reaches customers wherever they are; all they have to do is glance at their phones to see your messaging.
• It's a low-cost marketing solution with a high return on investment (ROI).

Perhaps the biggest benefits of SMS marketing services is that people are more willing to trust text over other marketing channels. The overwhelming majority of text messages are legitimate, with spam messages making up less than 5% of texts received. SMS marketing statistics show that, as a result, SMS text messages have a 98% open rate. This dwarves the open rate of even email marketing, which is one of the most effective methods available, at 22%.

Another benefit of SMS marketing is just how quickly it allows you to engage with your customers. CTIA reports that the average response time for text messages is 90 seconds, compared to the hours — or even days — that they might wait to respond over other channels. IDC Research suggests that 79% of Americans have their phones with them at least 22 hours per day, which means that when you send an SMS message to a customer, they will likely see it within minutes.

Of course, there is more to SMS marketing than simply sending out texts. If a business wants to tap into this ripe market, there are several SMS marketing best practices to keep in mind:

• Provide value
  Text messaging is personal. Most people only text with close friends and relatives, so if they’ve invited you into that inner circle, then you need to make that invitation worthwhile. Segment your audience and only send the most relevant messages, so that when your clients see a text from your business coming through, they’ll be excited to open it.
  Likewise, make the deals and information you provide via text messages exclusive. If your customers can get the same deals in your emails, print ads or website, the text messages lose their appeal. Make sure that opting in is worthwhile to your customers.
• Pay attention to timing
  When do customers want to hear from you? Probably not between 9.00 p.m. and 9.00 a.m., particularly if your business isn’t even open during those times. If your business is closed on weekends, then the same goes for Saturdays and Sundays. Track the times that users are most active on your mobile site to find the ideal times to send out promotions and other news.
  Additionally, make sure that when users opt in, your system is prepared to send an immediate confirmation. If your customer opts in and doesn’t hear from you for weeks or months, they could easily lose interest.
• Track results and act upon them
  If you expect your SMS mobile marketing plan to have any effect, you need to keep track of its effectiveness. Track how many opt-outs you receive from each text, then use that to determine which sorts of content generate the best response.

Let’s spotlight a few examples showcasing how to incorporate SMS communications into a broader marketing strategy. First up, a leading Australian supermarket chain:

Woolworths

Woolworths serves millions of customers across Australia with a broad range of grocery and household products. The chain is also a leading proponent of SMS marketing techniques.

1. Personalised discounts and promotional offers

Woolworths intelligently leverages its Everyday Rewards loyalty program to collect customer data, including data points such as shopping habits and preferences.

Marketers everywhere will see where this is going. With all that data, you can segment customers into neat categories, allowing for highly targeted SMS marketing messaging.

This allows Woolworths to send timely, relevant messages to customers, such as personalised discount codes or special promotions. It’s a simple upgrade to old SMS marketing campaigns; leverage data to ensure the message is helpful and tailored rather than a generic nuisance.

For example, a customer who frequently buys organic products might receive a 10% discount on organic produce. This is a welcome message rather than an interruption to their day.

Woolworths creates a sense of urgency to gently push customers toward action. While the messages may be helpful, they’ll come with a caveat - limited time only.

For example, a customer may receive something like: "Flash Sale! Get 20% off fresh seafood today only."

This tactic encourages a quick response, boosting sales during specific periods beneficial to the store.

2. Timely order notifications

With the rise of online grocery shopping, especially in the wake of the pandemic, Woolworths upped their game with real-time SMS updates on order status alongside an ability to track orders.

So, you can now receive message updates while even tracking your order via the Live Map in the mobile app.

They utilise the following stages of communication:

• Order confirmation, when an order is placed.
• Order processing, when it’s being picked and packed.
• Dispatch notification, when the order is out for delivery, including estimated delivery time.
• Delivery confirmation, once the order has been delivered.

These SMS messages enhance the customer experience. They keep customers informed, reducing any anxiety they might have about their order. The level of transparency shown through this direct communication inspires trust in the brand and service.

It’s also beneficial for Woolworth's customer support staff as it reduces customer support phone calls and keeps customers updated in real-time on the status of their orders. As a result, this:

• Increases sales: Targeted promotions and ease of shopping online lead to higher conversion rates.
• Improves customer retention: Personalisation-rich messaging builds loyalty and repeat business.
• Enhances brand image: Increases customer satisfaction.

There’s a perception that SMS marketing can be pushy or even invasive. Yet, when the focus is on adding value to the customer experience rather than pushing sales, as with Woolworths, the effect is that this customer-centric approach turns casual shoppers into loyal customers.

Consumers look out for these messages because they are helpful.

Swiggy

Swiggy is India’s primary online food ordering and delivery platform. Swiggy also successfully utilises real-time order updates and personalised promotional texts to offer value to customers at every stage of the customer journey.

A differentiator we’d like to focus on with Swiggy is its feedback and rating requests.

Swiggy knows that much of the fast-food industry revolves around restaurant reviews. Food providers live and die by their reputation. As a curator, Swiggy wants to know the best restaurants, or at least the most pleasing, to present prominently to users.

Swiggy uses SMS marketing for post-delivery engagement. After an order is delivered, Swiggy sends an SMS requesting feedback.

They’ll send something like: "How was your meal from ABC Restaurant? Rate your experience here: [Link]."

The link is a call to action for filling out a survey, and this helps Swiggy accomplish a few things:

• Helps Swiggy and partner restaurants identify areas for improvement.
• Shows the company values customer opinions.
• More reviews and ratings boost Swiggy's overall credibility.
• Reviews provide valuable information for other customers.

In this way, the simple act of sending an SMS message and gathering feedback offers multiple benefits for a brand that relies on building a community around its service.

Grab

Grab is a leading super-app in Southeast Asia. It offers myriad services, including ride-hailing, food delivery, package delivery, and digital payments.

Grab incorporates a plethora of business texting strategies across its far-reaching, expansive product line. Much like Swiggy and Woolworths, they leverage personalisation.

Audience segmentation

Grab segments users based on the services they use most, such as frequent ride-hailing users, food delivery customers, or GrabPay users. It then sends personalised SMS offers relevant to a user's preferences, such as discounts or cashback.

For users who frequently order food, Grab may send an SMS like:

"Hi [Name], enjoy 20% off your next GrabFood order! Use code EAT20 at checkout."

Grab also sends SMS promotions based on a user’s location, for example:

"Heading out in Kuala Lumpur tonight? Get RM5 off your next Grab ride with code KLNIGHT."

These relevant offers encourage users to utilise Grab's services more frequently, while promotions can lead to increased transactions and higher average order values.

Service updates

Since Grab is an ever-evolving app, it’s important for them to keep users informed of service updates and alerts. This is a helpful, non-promotional use for SMS campaigns.

These updates might involve changes in service terms, raising awareness of safety measures, or launching new features.

For example, “Stay safe with Grab's new in-app emergency button. Update your app to access this feature."

This open communication about service changes builds trust with the consumer. Grab wants to help users understand their service and product better. These messages show that Grab is looking out for its users, demonstrating its commitment to user’s well-being and safety.

Key takeaways from Grab's SMS marketing strategy:

• Tailored offers and discounts encourage users to utilise services more frequently and try new offerings.
• Send texts to communicate with customers proactively about changes or issues. This strengthens user trust. As you select the best tool for your business to implement SMS marketing, keep a few questions in mind:
• What functions does the tool offer?
  What can the software do? Does it allow you to set a schedule for a series of texts? Does it provide analytics for you to track and understand how customers are responding? Does it provide a simple interface to manage the contacts you have gathered? When you boil everything down, can the tool handle everything you need it to?
• How simple is it to integrate into your current system?
  Your company has likely built up an infrastructure that keeps operations going smoothly. How easily does each new tool fit into that infrastructure? Will implementing the tool cause major disruption to your operations or will there be little impact?
• Once it’s installed, how easy is it to use?
  How intuitive is the product? How easy will it be for current employees to pick up? What about for new employees who are hired later? How well does it integrate with your current systems? If you already have a database of contacts, how easily can you import that database into the new system?

People use their phones. People trust their phones. SMS marketing builds upon that relationship. By providing clients and potential clients with direct, personal marketing, while also giving them the freedom to opt in or out of participation, SMS ensures that those receiving your messages are interested. Despite this, SMS marketing often gets overlooked when businesses plan out their marketing strategies. Take advantage of this valuable marketing channel. With SMS marketing, your message gets to where it needs to be — in the hands of your clients.

As you select the best tool for your business to implement SMS marketing, keep a few questions in mind:

• What functions does the tool offer?
  What can the software do? Does it allow you to set a schedule for a series of texts? Does it provide analytics for you to track and understand how customers are responding? Does it provide a simple interface to manage the contacts you have gathered? When you boil everything down, can the tool handle everything you need it to?
• How simple is it to integrate into your current system?
  Your company has likely built up an infrastructure that keeps operations going smoothly. How easily does each new tool fit into that infrastructure? Will implementing the tool cause major disruption to your operations or will there be little impact?
• Once it’s installed, how easy is it to use?
  How intuitive is the product? How easy will it be for current employees to pick up? What about for new employees who are hired later? How well does it integrate with your current systems? If you already have a database of contacts, how easily can you import that database into the new system?

People use their phones. People trust their phones. SMS marketing builds upon that relationship. By providing clients and potential clients with direct, personal marketing, while also giving them the freedom to opt in or out of participation, SMS ensures that those receiving your messages are interested. Despite this, SMS marketing often gets overlooked when businesses plan out their marketing strategies. Take advantage of this valuable marketing channel. With SMS marketing, your message gets to where it needs to be — in the hands of your clients.

Salesforce Marketing Cloud can provide a comprehensive SMS solution for your business.

With Salesforce Marketing Cloud, you can design, build, and deploy automated SMS campaigns, leveraging advanced AI tech to speed things up. You can manage, track, and optimise SMS messages, send alerts, and send transactional messages using templates and a user-friendly drag-and-drop interface.

AI insights help you to determine the best timing for your messages. This is critical to ensure your communications reach customers when they are most receptive.

Integration with your CRM software, for example, is super smooth, merging your contact lists seamlessly. As your business grows, the platform grows with you without causing any issues.

You can manage email, social media, SMS workflows, and mobile push notifications all in one place, ensuring consistent messaging across all your channels.

Salesforce is at the forefront of AI-powered reporting and analytics that helps you iterate and improve as you move on to new campaigns. You get a whole lot more than just an SMS marketing automation tool.

Discover how Salesforce Marketing Cloud can help you engage your audience and grow your business with ease.

People use their phones. People trust their phones. They use them to send and receive messages every day.

SMS marketing builds upon that relationship. By providing clients and potential clients with direct, personal marketing, while also giving them the freedom to opt in or out of participation, SMS ensures that those receiving your messages are interested. Despite this, SMS marketing often gets overlooked when businesses plan out their marketing strategies.

Take advantage of this valuable marketing channel. With SMS marketing, your message gets to where it needs to be — in the hands of your clients.

Ready to elevate your marketing strategy for business growth? Discover how Salesforce Marketing Cloud can help you harness the power of SMS marketing and create meaningful customer experiences.