What is SMS marketing? Your guide to the fastest-growing ecommerce marketing channel

“No one wants a text message from my brand.”

That’s the most common SMS marketing myth Ashley Ismailovski, director of email marketing at SmartSites, hears from clients.

“To that, I always say, ‘How will you know if you’ve never tried?’ Just because you don’t personally like to receive SMS marketing campaigns does not mean that your customers won’t,” Ismailovski points out. “More often than not, we find that consumers are more receptive and more engaged with SMS campaigns than over email.”

Ismailovski is right: According to Klaviyo’s SMS consumer sentiment report, more than twice as many shoppers would rather hear from you via text message than over social media—and 96% are willing to receive a text from a brand at least once a week.

Plus, those who do subscribe to SMS tend to take action on what they receive. According to G2, 33% of SMS recipients react to calls to action (CTAs) in SMS marketing messages, and 47% of them end up making a purchase.

For years, marketers have relied on email due to its wide reach, massive return on investment (ROI), incredible speed, and stable costs.

Now, SMS or text message marketing is gaining similar traction among both large and small businesses that want to build genuine, long-term relationships with their customers: According to Klaviyo’s marketing mix report, 30.47% of all ecommerce brands and over half of businesses that make $20M+ in annual revenue are currently using SMS as a marketing channel.

Ecommerce brands that incorporate SMS marketing into their broader owned marketing strategy are driving more revenue by creating unparalleled customer experiences. But how can you make sure you’re getting the most out of this burgeoning channel?

Let’s start with the basics.

What is SMS marketing?

SMS marketing is the practice of sending customers and prospects marketing messages, promotions, coupons, announcements, appointment reminders, and more via text message.

The term “SMS” stands for “short message service,” and brands use this form of opt-in marketing communication to interact with their customers on a more personal level. “Opt-in marketing communication” means you can only send SMS messages to people who have explicitly consented to receive them.

Besides SMS messages, you can also send MMS messages—text messages that contain pictures, GIFs, or other animated images.

And remember, like email marketing, SMS is an owned digital marketing channel. This means you have complete control over who receives an SMS marketing message, what content you share, and when you decide to send it.

What are the main types of SMS marketing?

When you implement SMS messaging as part of your marketing strategy, there are 3 types of communications you might send to your audience:

1. Promotional SMS marketing

Promotional SMS marketing includes messages or texts you send to increase sales, promote a product, or build brand awareness.

Promotional messages might be one-off SMS campaigns or SMS marketing automations—SMS messages triggered by the actions someone takes on your website.

Sportswear brand Montirex, for example, has found success with browse and cart abandonment texts—especially when they personalise SMS messaging based on each shopper’s behaviour, such as including a discount only when someone abandons a high-value cart. Montirex’s browse abandonment SMS flow alone drives a 32% click rate.

Whether they’re campaigns or flows, you can use promotional SMS messages to:

• Inform your customers about the launch of a new product.
• Offer a special sale or promotion.
• Share company announcements.
• Promote branded events.
• Provide tips on how to best use the products you’re selling.

2. Transactional SMS marketing

Transactional SMS is any text message you send to a customer to inform them about the status of their order. Several types of SMS are considered transactional, including:

• Order confirmations
• Shipping updates
• Shipping delay notifications
• Delivery confirmations

Unlike promotional SMS, which is typically focused on making a sale, transactional SMS is a form of customer service that aims to keep customers informed about a purchase. Klaviyo’s recent consumer sentiment survey found that out of all the SMS messages they could receive from brands, consumers want transactional messages the most:

One thing to note: The Telephone Consumer Protection Act (TCPA) requires explicit consent for transactional SMS. When someone opts in for transactional SMS, that does not mean they’ve opted in for promotional text messages as well.

On the other hand, if you have promotional SMS consent, you can send a transactional text, too—but any unsubscribe is a blanket SMS unsubscribe from your brand.

3. Conversational SMS marketing

Whereas two-way SMS involves responding to specific words as prompts, conversational SMS uses natural language processing to carry on digital conversations with more nuance.

True conversational SMS systems use a combination of this automated text technology and human customer service agents who can fill in the blanks when conversations are beyond the algorithm’s abilities.

A main use case for conversational SMS is customer service enhancement, which leads to higher retention, higher average order value, and even higher customer lifetime value (CLTV).

What are the top benefits of SMS marketing?

At this point, you might have a few questions. Why should you consider using SMS marketing? How can you tell if there’s an opportunity on this channel with your target audience? And is it actually worth the effort to add text message marketing if you’re already seeing incredible results from email alone?

Here are 5 key reasons why ecommerce businesses invest in SMS marketing—and why it might be right for yours, too.

1. SMS marketing drives customer engagement

According to Klaviyo’s SMS marketing industry benchmarks, SMS campaigns drive, on average:

• 10.14% click rates
• .09% conversion rates
• $0.09 revenue per recipient

“SMS as a channel is very in the moment, so brands can expect a more dedicated consumer,” says Suze Dowling, co-founder and chief business officer at Pattern Brands. “We see SMS campaign click rates that are 6-8x higher than email.”

That’s not to say email marketing is dead. Far from it, according to our marketing mix report. But “email is crowded and it’s becoming increasingly more crowded,” says Blair Peterson, VP of strategy at ethical jewelry brand Dana Rebecca Designs. “Especially for the people who are really engaged with your brand, SMS is a way to speak to them more directly.”

“You need to consistently be finding new ways to talk to your customers that keep them engaged, and SMS is one of them,” Peterson adds. “It’s a miss not to try it.”

2. SMS marketing reaches customers instantly

Unlike emails, which may languish in the dreaded promotions tab for hours, days, or even weeks, texts tend to garner immediate attention.

“I don’t know about you, but I don’t receive email notifications on my phone. I do get text notifications,” points out Jacob Sappington, head of email at ecommerce growth marketing agency Homestead Studio. “SMS marketing gives you a faster way to interact with your customer.”

If you have a special offer you want your subscribers to take action on right away, notifying them via email means they may miss your message. But if you send them your time-sensitive message via text, they’re more likely to see it—and take the action you’d like them to take, right away.

That’s what bag brand Dagne Dover discovered when they decided to mitigate high acquisition costs from Google and social media by cracking the code on how to best use SMS as a more cost-effective marketing channel.

The brand didn’t want to go overboard with SMS out of respect for their audience, so they decided to reserve it for the most important moments during the customer journey—like when someone is right on the edge of converting. The strategy works: Dagne Dover saw a 12,000% ROI increase during their first year on Klaviyo SMS—and email and SMS make up 25% of the brand’s overall revenue each quarter.

“It’s diversification of channels,” explains Elliot Scott, founder and CEO of London-based retention agency ElliotDigital. “SMS cuts through all the noise straightaway.”

“It’s very immediate, so for the right messaging types, it’s extremely effective,” Sappington agrees. “SMS is fantastic for product launches, it’s fantastic for flash sales—it’s fantastic for sales, period.”

3. SMS marketing creates personal connections

Texting is how people communicate with their friends and loved ones, which means their mobile device is often only an arm’s length away.

It also means, compared to their email address, people tend to be pickier about who they share their phone number with. Klaviyo’s consumer sentiment report found that 95% of consumers subscribe to less than 7 brands via SMS—and over half subscribe to only 2-3 brands.

In other words, if you have someone’s phone number, they really want to hear from you—and they’re more likely to be a loyal customer or brand advocate than a one-time or occasional buyer.

As Scott points out, “I don’t email my friends—we text. I don’t think I email anyone outside of work. So that ability to chat to someone through a phone, within boundaries—you can spark up some really good conversations with people who are more likely to remember you.”

4. SMS marketing complements—and enhances—your email marketing strategy

Because consumers are more selective about who they’ll share their phone number with, your SMS list tends to be smaller than your email list—which is why mobile marketing strategies tend to work best when paired with a strong email marketing strategy.

“We never advocate for clients using just one or the other,” Sappington says. “Whenever they leverage both email and SMS, it always works better together.”

Healthtech brand Mira, for example, solved a declining engagement problem by switching from Attentive to Klaviyo. With email and SMS marketing under one roof, Mira is able to create distinct customer journeys that vary by acquisition source and health goal—and deliver the kind of relevant content that’s reflective of the diversity they’re proud to showcase on their website.

This kind of omnichannel marketing approach is crucial for reaching today’s consumer where they are, Sappington explains: “People are busy. They’re very distracted in their day to day. As many touchpoints as we can get with them, as many ways as we can plant seeds and plant reminders, that’s the goal.”

“More brands should look at ways to improve cross-pollination between their different channels,” agrees Wei Tan, co-founder of The Orchard Agency. “Not all your fans are following you on your social channels, or subscribing to your email or SMS contact lists. Improve message visibility by reaching out to your customers across all your various marketing touchpoints.”

5. You own your SMS marketing efforts

In the aftermath of iOS 14.5, the world is moving toward enhanced customer privacy by blocking third-party tracking.

Fortunately, this doesn’t affect SMS and email marketing, because neither channel relies on third-party data to reach customers with personalised communications.

When you collect a phone number or email address, you own that information. You can communicate with your subscribers at any time, and there are no algorithms that decide when or how they’ll see your message.

Plus, you know they want to be there. As Sappington puts it, your SMS and email lists are “a self-selected audience of people who’ve said they’re willing to hear from you on multiple channels.”

Want more SMS strategy tips and examples? We go beyond the basics to help you start from a place of value and end with loyal, lifelong customer relationships in this ecommerce SMS marketing series. Check out:

• SMS marketing strategies
• SMS marketing in Europe
• SMS best practices
• Top SMS marketing software
• SMS integrations

SMS marketing FAQs

Does SMS marketing really work?

Yes, SMS marketing really works. Klaviyo’s SMS consumer sentiment survey found that 73% of consumers have made a purchase based on receiving a text message from a brand—and over half of them have done so 2-3x.

And according to Klaviyo’s latest SMS marketing industry benchmarks, the average text message campaign earns a 10.14% click rate, a .09% conversion rate, and $0.09 in revenue per recipient.

How do I run SMS marketing?

Many brands get started with SMS marketing by turning on transactional SMS marketing. Consumers prefer transactional SMS messages from brands the most because these texts contain important order information.

But brands also often begin an SMS marketing program by building their SMS subscriber lists through tactics such as:

• Messaging their existing email list and encouraging them to sign up for VIP deals via SMS
• Launching a pop-up on their website offering a discount for first-time buyers who sign up for SMS

Keep in mind a strong SMS marketing strategy doesn’t exist in a silo, but rather integrates with email marketing.

Is SMS marketing free?

SMS marketing is not free because sending SMS text messages is not free. In the same way you must pay for a mobile phone plan with a carrier like Verizon that allows you to send text messages, most SMS marketing platforms require brands to purchase a number of credits to send text messages to consumers.

Brands using Klaviyo SMS, for example, receive a set number of SMS credits per month. You can use your credits toward any combination of SMS and MMS messages (a text message over 160 characters or containing an image or GIF).

What is an example of SMS marketing opt-in?

Having a customer’s phone number does not mean they gave you permission to send them SMS marketing. While you do need a phone number to text someone, they must also explicitly opt in to receiving marketing text messages (see SMS Compliance in UK; and SMS strategies for Europe) Explicit SMS consent can be collected when someone:

• Checks a box to receive texts at check-out
• Submits their phone number in a form on your website
• Uses a keyword like “JOIN” to opt in

When should I use SMS marketing?

You should use SMS marketing when your brand has something urgent to communicate, such as a flash sale, back-in-stock notification, or order status update. You can also use SMS to send your VIP customer special offers before anyone else on your list gets them. You should avoid using SMS for communications that are not time-sensitive or exclusive, such as brand-related or educational content.