On Jul, 23 2019
SMS marketing is one of the most effective ways to increase e-commerce sales. Although proven to be more lucrative than other marketing channels, SMS is an underused tool that holds endless untapped opportunities for savvy e-commerce marketers.
This article explains the basics of e-commerce conversion rate optimization, then provides tips to optimize your conversion rate fast using SMS marketing.
What is the conversion rate of SMS marketing?
Open any article about the benefits of SMS marketing and you’re bound to find one particular statistic: SMS marketing campaigns have a conversion rate of 45%.
But what does this actually mean? Before an e-merchant can properly understand how to drive conversions with SMS marketing, they first need to grasp two key concepts:
What is an e-commerce conversion rate and how do I calculate it?
An e-commerce conversion rate is the percentage of website visitors who make a sale and become a paying customer. A generally accepted baseline conversion rate for e-commerce stores is 2%, however this changes depending on many factors such as what a store sells, the average cost of products, etc.
Use this simple formula to calculate an e-commerce conversion rate:
The number of sales in a set period of time / the number of website visitors in the same timeframe.
Let’s say over a one month period a store had 1500 website visitors and made 50 sales, their conversion rate would be 3%.
What is an SMS marketing conversion rate?
The term ‘SMS marketing conversion rate’ refers to the average increase in sales attributed to either SMS marketing as a whole, or a specific SMS campaign. Calculating the SMS marketing conversion rate is the best way to understand how beneficial SMS marketing really is.
There are two ways marketers can calculate their SMS conversion rate:
- Simply compare overall conversion rate before and after launching an SMS marketing campaign
- Or, calculate the percentage of SMS messages in a campaign that resulted in a sale
Each of these metrics holds a different purpose and is relevant in different e-commerce situations.
How does SMS marketing drive e-commerce conversions?
SMS marketing may sound old-school, but it has some unique characteristics that make it relevant in the age of digital marketing.
Thanks to its immediate nature, SMS is best used to prompt users to take an action (purchase an item, recover an abandoned shopping cart, use a discount code, etc.) in the moment. They create a sense of urgency crucial for maximizing conversions on limited time offers.
More than 80% of consumers have notifications turned on for native SMS apps, meaning their phones will alert them as soon as they receive a text and trigger them to engage with the sender then and there.
SMS also allows e-merchants to meet customers where they spend their time, on a mobile device. The average time that an adult spends on their mobile device is 3 hours and 23 minutes per day. In October 2016, mobile internet usage surpassed desktop worldwide for the first time ever and it’s gaining more ground year after year.
It’s clear that if e-merchants want to reach customers on their preferred device, they need to optimize their websites for mobile and focus their marketing efforts on mobile channels like SMS.
How does SMS stack up against other marketing channels?
SMS conversion rates are so high because texts reach people immediately on their mobile devices. But what are its specific advantages compared to other mobile marketing channels?
Firstly, 2.29 billion of the 5 billion cellphones in the world are non-smartphones, which means that using SMS marketing gives e-merchants access to the 50% of cellphone owners can't be reached via other mobile marketing channels. For e-merchants breaking into developing markets, this isn’t something to ignore.
Secondly, people don’t receive nearly as many promotional text messages as they do emails. Texts are generally perceived as more personalized and less spammy, which may explain why text messages have an extremely high open-rate. 82% of this survey’s respondents said that they read every single text message they receive. Other studies have reported a 98% open rate for SMS as opposed to only 20% for email.
Customers don’t just open SMS more, it’s also their channel of choice with 66% of customers preferring to communicate with brands via messaging over any other channel.
For more benefits of SMS marketing, check out this article.
How to optimize e-commerce conversions with SMS marketing
E-merchants with a high SMS marketing conversion rate are well on the way to sustained e-commerce growth. Here's how to achieve e-commerce conversion rate optimization using SMS marketing:
Engage customers with concise, relevant, personalized SMS
When it comes to writing an SMS, e-merchants only have 160 characters to shine. Make sure messages are as short, simple, and straightforward as possible. The more focused and concise the copy, the more likely the SMS will lead to a conversion.
Customers engage best with an SMS when it’s personally relevant to them. This means both addressed to them by name, and containing content that genuinely interests them. Segment contacts into lists and tailor SMS campaigns to specific audiences, rather than an entire contact list at once.
For more e-commerce SMS template examples, check out this article.
Drive traffic with a clear CTA
Use SMS to send customers shortened links to either an online store, a specific product page, or to return directly to a cart they abandoned. To make the customer to take immediate action, be sure to minimize the effort required to take that action. Don’t expect customers to search a website for a summer sale or their abandoned cart: hand it to them on a silver platter.
Trigger SMS to send automatically
Using a marketing automation platform, e-merchants can automatically send SMS messages in response to a customer performing a specific action on their site. Potential triggers include:
- Abandoning a cart
- Leaving your store
- Completing a purchase
- Canceling an order
- Failing to complete a payment
Such triggers help e-merchants reach visitors when their intent-to-buy is at it's peak, which is a great way to achieve e-commerce conversion rate optimization.
For example, a potential customer browses a site then leaves without making a purchase. In response to this, an e-merchant triggers an SMS to send immediately offering a special discount.
Thanks to the fast opening time of SMS messages, the potential customer will open and view the SMS while they're still interested in the product, a sure-fire way to increase conversions.
Use SMS to complement other marketing channels
The best way to achieve e-commerce conversion rate optimization is using SMS marketing is as part of a multi-channel campaign.
A well-timed SMS works as the perfect complement to a marketing email. Use email to visually showcase a new range of products, then, just as the customer is considering a purchase, blast them with a 5% discount sent over SMS to bring the sale across the line.
Use a marketing automation software to optimize a multi-channel campaign. Automatically send an SMS 5 minutes after the customer clicks and opens the email to ensure that the customer reads the SMS immediately after viewing the products on offer.
This complimentary use of multiple channels is true multi-channel marketing, and the most powerful way to increase e-commerce conversions.
Increase audience reach with fall-back logic
The problem with single-channel marketing is that each message will only reach customers who:
- Have given their correct (and current) details for that channel
- Have given the details to their regularly checked account
- Respond well to that specific channel
Any potential customers who aren’t reachable over the one chosen channel are effectively removed from the campaign. Don’t give up on these potential sales. Use SMS as a fall-back channel to maximize the audience reach of a campaign.
Let’s say an e-merchant sends a mass marketing email to 10,000 potential customers, 8500 of these emails send successfully and 1500 bounce. E-merchants with a multi-channel approach can automatically send the same basic information in an SMS to the 1500 potential customers who didn’t receive the email.
Going a step further, e-merchants can also split the workflow to identify contacts who received the initial email but didn’t open it within a few days, then send them an SMS as well.
Send discount codes over SMS
To increase e-commerce conversions fast, send a discount code over SMS. Discount codes sent via SMS have a 10x higher open rate than discounts sent over any other marketing channel.
Use discount codes to:
- Thank VIP customers for their loyalty to your brand
- Give cart abandoners that extra push to complete the sale
- Get rid of old stock
- Boost profits fast with a flash sale
Using SMS marketing as part of a multi-channel campaign is imperative for e-merchants wanting to achieve e-commerce conversion rate optimization.
Follow these tips to increase your SMS marketing conversion rate and you're well on your way to sustained e-commerce growth.