In the simplest terms, SMS marketing is a promotional tactic that involves sharing information with prospects and existing customers via text messages. Short Message Service, or SMS as just about everyone knows it, is direct, straightforward, and, when done properly, personal. It enables businesses, big or small, to attract new customers, increase sales, and improve customer retention.

The following text will examine different aspects and examples of SMS marketing and strive to provide insight into how and why it works.

Benefits of Using SMS Marketing

When considering text marketing, the critical question is WHY (it works)?

Promising Open Rates and Conversion Rates 

With the rise of messaging apps like Messenger, WhatsApp and Viber, it’s easy to believe SMS is a technological relic from the past. Something that reached its heyday when Nokia ruled the world. The reality, however, is different. SMS marketing open rates are exceptionally high, typically reported between 90% and 98% (depending on which study you read, the figures can vary, but they are never below the 90th percentile). In essence, far above the average email open rate of 20–40%, depending on the industry.

With that in mind, if you decide to incorporate SMS marketing into your overall marketing efforts, that means nearly everyone you message is likely to open it. Whilst engagement is not necessarily guaranteed, as you never know what the recipient might be doing in that moment, the chances are they would have seen it, and registered it in their mind.

For this reason, conversion rates are generally also impressive, usually between 5% and 15%, though targeted campaigns can sometimes reach 20% or more. MMS messages may perform slightly better thanks to visuals and links, though they come at a higher cost (for both parties, ultimately).

The Effects Are Instantaneous

SMS is straightforward. Once you craft a message and click send, it gets delivered within seconds.

As we already touched upon, most SMS messages are opened within just a few minutes of delivery, often far faster than email or push notifications. This speed makes SMS marketing an ideal tool for time-sensitive offers and real-time engagement, helping businesses strengthen both acquisition and customer retention.

Low Cost, High ROI

Next to email, SMS marketing is arguably the least expensive marketing channel to employ today.

As a small business, budgeting is always a challenge, especially if you are just starting. However, with over 7.2 billion smartphones worldwide in 2025, covering almost 90% of the global population, SMS remains one of the most reliable and effective ways to reach your audience directly. There is an argument to be made that you not only have ways to reach people directly, but also across the globe. One such example is the swimwear brand AussieBum. Even though they hail from Australia, their online shop has international shipping. Those who have provided them with the correct contact details, will be informed about their most recent sales via SMS, even if they are overseas.

Thanks to today’s modern technologies and increased interconnectivity, the cost of sending an SMS is quite manageable. In the US, for instance, prices for domestic bulk messages typically range between $0.01 and $0.05 each, though rates can vary depending on carrier, volume, and message type (SMS vs. MMS).

Suppose you want to send 1000 messages; that’s $0.05 x 1000. You’ll dedicate a budget of 50 dollars to sending messages to prospects.

Let’s say the conversion rate is 5% (0.05). When you multiply 1000 texts by 0.05, you get 50 sales. Now, let’s say customers spend, on average, $30 ordering from you. When you multiply 50 sales by $30, you get your revenue. It’s $1,500.

Fast forward to ROI. 

You can calculate your SMS marketing return on investment (ROI) using the standard formula:

ROI = (Net Income / Total Cost) × 100

For example, if 1,000 texts cost $50 and generate $1,500 in revenue, your net income would be $1,450.

ROI = (1,450 ÷ 50) × 100 = 2,900%

This is a hypothetical example, of course, meant to illustrate potential efficiency. Actual results will vary based on real-world factors like your offer, audience, and targeting.

How to Leverage SMS for Best Marketing Results

Text marketing may be a budget-friendly tactic, but it should not act independently. SMS should be one of the channels you’ll use to promote your products and services. Think about how effective a well-illustrated (images, graphic design) email campaign might go with a special bonus discount code sent not long afterward via SMS. The text message will be short and to the point, briefly referencing the specific campaign, whilst reminding them of the original email (if they opened it) or making them go and check their inbox for further details.

When employing text message marketing, the following should always be considered.

Tone of the Message 

At its core, SMS is an informal form of communication. It’s how you should approach it when creating copy for your next (or first) SMS campaign. The tone of the message will depend on your business offer and your target audience. The key is to strike a tone that feels friendly and conversational while still maintaining professionalism. 

The Content

SMS marketing is informative. You want to update prospects about upcoming events, exclusive deals, sales, etc. Given the format, your SMS must be concise yet detailed with a clear and easy-to-follow CTA (call to action).

Rules and Regulations

When it’s overused, SMS marketing can seem intrusive, making potential prospects less interested in your offer. Even a well-meaning, occasional SMS can arrive at the wrong time, during a moment of stress for the person (stuck in traffic, in a meeting), and it could create a lasting negative association and impression. It can also lead to potentially hefty fines if you violate certain legal standards. 

In the U.S., the Telephone Consumer Protection Act (TCPA) regulates how businesses can send promotional texts. Companies must obtain prior consent before messaging consumers and make unsubscribing as simple as replying “STOP.”

Depending on where you operate, other laws such as the CAN-SPAM Act, CTIA guidelines, or GDPR (in the EU) may also apply.

The primary legal requirement is obtaining prior express consent before sending any promotional texts. Equally important, businesses must provide a clear and easy-to-opt-out process for recipients. Think of it as an “easy come, easy go” kind of situation. It is also useful to consider how you might act in such a situation. You (or anyone else) wouldn’t want to be pestered by information you are not interested in.

That’s why, before launching an SMS campaign or even including it in your overall marketing strategy, consult a legal professional to ensure full compliance with the laws of your state or country.

Rely on Data

Two words: data and personalization. Information is the most valuable currency on the internet, and the more you know about someone (or something), the better you can communicate your message. Setting your brand up for long-term success heavily relies on how data-driven your business is.

Data collection and analysis help you better understand the market and your prospective customers. It can also help differentiate you from other competitors and help your company or business achieve even better success in meeting its clients’ needs.

You must first clearly define your target audience and craft text messages based on that. Once a prospect becomes a customer, use SMS to nurture the relationship and encourage repeat interaction.

SMS can help you build deeper connections. The simple act of using their names in texts or sending recommendations based on purchase history will signal your intent to have a long-lasting vendor-buyer relationship.

You can also use data to create SMS loyalty programs, rewarding the most loyal customers by offering exclusive deals and discounts.

Send at the Right Place at the Right Time

Remember, prospects may accept being on your texting list, but that doesn’t mean you can send them numerous texts, day and night. That is just basic human decency, really. Again, having access to good data will allow you many insights about your target audience, like their age and occupation, and help you define (and refine) the most effective time to send your message.

As a general rule, messages sent during typical working hours (late morning to mid-afternoon) tend to perform best. However, the ideal timing can differ by audience, and testing various send times would help better identify what resonates most.

Think about the quantity as much as you think of the quality of texts you send. Define whether it will be occasion-driven, meaning you’ll send them only when you have a new offer. Or, it will be a weekly, biweekly activity with reminders, follow-ups, and news. It really all depends on the size and nature of your business and how well integrated you are via a combination of channels.

Digital channels are powerful on their own, but paired with a dependable SMS marketing platform, they can take your business’s growth and retention to the next level, positioning your business for better long-term success.