Article

Getting On The SMS Bandwagon

Advertising Attribution Consumer Behavior Ecommerce SMS Testing

October 18, 2023

I want to talk about a topic that gets comparatively little attention in the world of paid media, but is becoming progressively more critical to success: SMS.

Before we want to dive in, I want to provide a little context on how I’ve come to this perspective. Let’s start with the facts: the average US smartphone user spends between four and seven hours per day (yes, you read that correctly) on their device. The vast majority of that time (>85%) is spent on on-screen activities/applications (i.e. not calling). Finally – and perhaps most crucially – upwards of 70% of text messages are opened within 5 minutes of receipt; a staggering number when compared to email’s open rate during the same time (~5%). All of this boils down to one inescapable conclusion: people live on their phones.

Anyone who has followed this newsletter or attended one of my conference presentations knows that I’m a huge proponent of fishing where the fish are. And, in the case of connecting with consumers, those fish are on their smartphones.

Most of our paid media + marketing efforts have progressively shifted toward mobile devices: we built apps and mobile-first websites; we shoot vertical video; we optimize Google + Meta ads for mobile devices first; we tailor our SEO strategies to maximize viewability on mobile SERPs vs. desktop. It’s always been curious to me that this trend stops the second we transition to nurture + loyalty marketing – both of which revert back to a ~2005 email + call strategy for the vast majority of brands.

That’s bonkers. And that’s always why I’m bullish on SMS for both eCommerce + lead generation cases.

For this article, I want to cover three things:

The Advantages of SMS
Core SMS Use Cases
A 15-Point Checklist for Selecting A Platform

The Advantages of SMS:

Despite everything mentioned above (all of which are compelling reasons to use SMS!), I think the single-greatest benefit of SMS for brands is the data capture. Phone numbers are among the most durable + resilient primary keys available: most people don’t change their cell number for 10+ years. In fact, I surveyed 50 people between the ages of 25 and 55. 84% of them have never changed their cell phone number. Of the other 16%, 83% had only changed their number once.

There is no better, widely-available unique identifier out there. This is confirmed by enhanced conversion + user match data from both Google + Meta, where lists including opted-in cell phone numbers had significantly (20%+) higher match rates than lists that included only name, email and zip code.

Every day, two things become more critical for brands to succeed in digital advertising: data + direct connectivity. SMS provides better data that can be used to power LALs, customer lists and exclusions, along with the ability to reach your prospects/customers at staggeringly high rates (~95% open rates within 24 hours for SMS vs. ~21.5% for email).

The Core SMS Use Cases:

The key to maximizing the impact of SMS is to have absolute clarity about its use case. In an ideal world, SMS should feel like a natural part of the user/buyer journey – with triggered messages complementing your existing touchpoints. This enables every SMS to serve a specific purpose – maximizing value to your target audience, minimizing wasted sends and expediting the path toward your desired outcomes.

If you’re still struggling to see how SMS could be used in your business, here are 7 common use cases:

Informational: this includes everything from order/product/service updates to appointment/receipts/delivery confirmations to general announcements that are relevant to your audience (PSA: don’t send new hire announcements via SMS).
Promotional: SMS is a high-impulse medium that can effectively drive prospective + current customers to buy. The key is to not overuse SMS for sales; don’t be like those bad Big Box Brands who just send coupons or sale announcements all the live-long day. Balance is key to a successful SMS program.
Event-Specific: I love SMS for event management. The reality is most event apps are hot garbage, and most event attendees are on their phone constantly. There’s no better way to provide real-time updates on what’s going on.
Customer Service: Online chats suck. Email support sucks more. SMS is an ideal mechanism to provide quick, convenient, on-demand support to customers.
Nurture: SMS is a wonderful way to nurture prospects. This is doubly true for brands with a clear set of required actions or trigger-specific processes. Instead of desperately trying to get on a call to ask about pain points or challenges, use SMS to allow prospects to answer those questions on their terms. Follow up with relevant materials (links in SMS are magic). Voila! A high-converting, dynamic nurture flow that puts less demand on your sales team.
Upsell & Cross Sell: SMS + LLMs is a magical combination for cross-selling + upselling your existing customers. Use LLMs to segment your audience (no data scientist required!), then send those segments targeted offers to upsell or cross-sell them. Done well, this is a money printer for both ecommerce and lead generation businesses.
Customer Reviews, Surveys & Feedback: getting customers to provide feedback is brutally difficult. That being said, SMS is a great way to remind customers to provide a review; some platforms even enable in-text reviews, which are absolutely fantastic.

17 Questions To Ask A Potential SMS Provider:

Platform Performance – what is the platform’s average SMS performance? It’s usually given as a “XX ROI” or “$YY dollars for every $1 spent” format. Bear in mind that these figures are usually juiced by big spenders or well-known brands. To combat this (and to ensure that the platform is capable of helping your brand), ask for case studies/performance metrics from current brands in your industry, size and spend tier. If the platform isn’t able to provide these, that’s a major red flag.
Attribution — As important as overall performance is, understanding how that performance is calculated is even more important. Ask: are these metrics based on view or click attribution? What are the attribution windows (usually: 1 day, 7 day, 30 day, 90 day). Bear in mind that view-based attribution in SMS tends to inflate revenue; the longer the window, the less likely SMS drove incremental revenue. The ideal platform should offer click-only attribution with the ability to set your own attribution window.
Setup – who is setting up the SMS platform? What are the resources required on your end to handle implementation? I know a lot of platforms promise to make it easy, but the reality doesn’t match that. As part of your due diligence, ask to speak directly with the implementation team, not the sales team. If they refuse to bring the implementers onto the call, it’s time to run. I know of many brands who thought they were getting a free implementation, only to find out that they were on the hook for over $10,000 in development costs.
Contract Terms – SMS should be a partnership, not a lifetime marriage. Ask to see the platform’s Master Service Agreement up-front. If you see a 12+ month lock-in with no termination rights, run. If you see restrictions on who can access your SMS account, run. If you see provisions that allow the platform to own, control or otherwise use your SMS list, run very, very fast.
List Ownership – I truly can’t believe this is a thing, but it is. One of my very first questions when vetting an SMS provider for a client is this: Is [brand] permitted to download their SMS list at ANY TIME for ANY REASON? If the answer is anything other than an unequivocal “absolutely” – run. End the call. Save yourself the headache.
Cost Preview – Ask to demo the platform and watch a sample send. One major thing to look for: are you given a cost read-out before sending a campaign? It’s very easy for platforms to obfuscate the true cost of a send by defaulting to “credits” or “tokens” – these systems use funny-money math to confuse + dupe. A winning platform provides a simple, easy-to-read, dollars-and-cents cost preview for your send.
Discount/Offer Codes – does the platform generate unique discount codes // offer codes? If not, you’re likely to get Honey’d. You want single-use, unique discount codes – this ensures that your codes aren’t going to be shared, and that they’ll only be used one time.
Integrations – does your SMS list sync directly into Shopify / WooCommerce / Your CMS? If not, pass. No one has time for manual uploads every day. It’s 2023.
Migration Support – if you have an existing SMS list/provider, will the platform handle your migration for you, or is this something you (the brand) are required to do?
List Cleaning – The single-largest source of waste in SMS is sends to invalid or otherwise bad numbers. It’s imperative to understand your SMS platform’s approach to list cleaning. Ask questions like: What is the list-cleaning process? How often does this process run? Do you have any control over it? Can you set custom rules? Is there an incremental cost for list-cleaning? A great platform will have automated cleaning that is done free of charge, and includes customizable rules so you can tailor it to your needs.
MMS/SMS Pricing – Are MMS + SMS charged differently? If yes, then you’re likely going to pay ~2x more than you need to.
Subscription Pricing – are you charged per subscriber? If yes, run. Run faster if the platform doesn’t offer list cleaning, or doesn’t offer transparency into how + when they clean your list. If you don’t, the only thing that will be cleaned out is your bank account.
Conditionals + Logic – what types of conditional splits + logic does the platform offer? Can you customize flows or segments? What operators are available to you? How many operators can be used in a given flow? Just about every platform will say they offer this; the devil is in the details. It’s important to go beyond the top-level + get into the details, else you might find yourself in a position where you can’t segment and exclude within the same flow.
Dynamic Linking – does the platform support dynamic welcome or flow links (i.e. to a campaign page or a last-viewed page)? If not, it is unlikely that the platform will maximize your SMS performance.
LLM/”AI” Integration – does the platform support integrations with any LLM or have specific functionalities to customize your messaging based on the user + their behavioral history? Recart is the pioneer in this space, and I can honestly say it’s one of the best applications of LLMs in marketing today. There’s nothing better than being able to send a tailored, segmented SMS campaign from your phone in 5 minutes.
Reporting – can they provide sample dashboards that show exactly what you’ll get, along with what dependencies are on that data? There’s nothing worse than selling senior leadership on a dashboard, only to find out later that the data required to power it isn’t available or not given to someone at your spending level. Ask for levels of granularity provided, along with what types of segmentation is supported – things like device, operating system, location, etc. are all helpful to understand your SMS performance.
Creative Testing – does the platform support A/B and/or Multivariate testing? If not, why not? Experimentation is a necessary component of optimization.

At the end of the day, SMS done well can have a transformational impact on your business (in some cases, adding 20%+ to your top-line and accelerating lead-to-close times by upwards of 25%). The simple reality is most businesses aren’t using SMS to its full potential. The sooner you get started, the sooner you’ll start to unlock more revenue, more intimate customer relationships and better customer data.

That’s all for this one!

Cheers,

Sam

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