SMS Marketing: Pros & Cons of an SMS Strategy

Ryan Nead
January 13, 2022

Text messaging has become a ubiquitous form of communication over the past 15 years. It’s the modern equivalent of sending a postcard at warp speed.

These short, personal messages are delivered instantaneously from one device to another – offering a frictionless alternative to more time-consuming methods like phone calls or emails.

Though they’re often used for frivolous purposes – like sharing GIFs or making weekend plans with friends – text messaging can actually serve as a foundational pillar for marketing and customer support.

But before you go “all in” on texting, you need to understand the pros and cons so that you can generate maximum value with minimum resources.

Table of Contents

The Lowdown on SMS

The technical name for text messaging is Short Message Service, better known as SMS. And while it’s only just become a popular mode of communication over the past couple of decades, it was actually invented in the 1980s.

SMS messages are sent over a cellular network and can be sent between any two devices with an active wireless plan. As you know, they allow one user to send a short-form message to another user.

These messages are limited to 160 characters (hence the “short” in Short Messaging Service). For many years, messages longer than this character limit would be split into multiple parts. Today, carriers automatically chain longer messages together so that they appear as a single message.

Before we dig into the power of SMS as a business tool, let’s zoom out and look at the bigger picture. Here are a few data points that may surprise you:

5 billion people in the world have the ability to send and receive an SMS message. That amounts to roughly 65 percent of the entire global population. It’s a particularly staggering number when you realize that as many as half of all mobile phone users don’t own a smartphone (meaning they don’t have an easy way to access the internet), SMS ensures these individuals are still reachable by businesses. However, research suggests that 8.2 billion people worldwide will use mobile phones within just a few years.
98 percent of American adults own a mobile phone with SMS capabilities. This means virtually 100 percent of every brand’s target market is reachable via text messaging. It’s simply a matter of reaching them.
9-in-10 customers prefer to receive a text message over a phone call. Likewise, half of all consumers say they prefer to receive direct communication from SMS (when compared to any alternative option). This makes SMS a much more practical option for sending business-related messages.
SMS is the #1 preferred channel of brand communication for consumers. Email, apps, and direct mail follow, respectively.
6 billion text messages are sent on a daily basis, which equates to roughly 180 billion per month and 27 trillion per year. In total, the 97 percent of Americans who text on a weekly basis are responsible for 45 percent of the world’s entire text volume.
On average, Americans text 2x as much as they call. And though it is seen as a more personal mode of communication than email, 75 percent of consumers are comfortable receiving an SMS from a brand (as long as they voluntarily opted in to receive messaging).
64 percent of customers believe brands should contact them via SMS more often. In fact, 3-in-4 customers want to receive more texts with special offers and discounts.
Over half of people surveyed say they’d rather send an SMS to a business than call customer service and wait on hold. Additionally, 67 percent of people prefer to text a business about appointments than reach out via phone or email.

There are dozens of other statistics just like these, but you get the idea. SMS is not just a communication tool that people use in their personal lives. It’s also a viable option for business communication. As more businesses realize this, the SMS marketing industry will explode.

7 Ways SMS Can Be Used in Business

SMS is an extremely flexible mode of communication and can be deployed in a variety of ways. This versatility makes it the perfect tool for any brand’s growth “toolkit.” Here are a few of the most common options:

1. Customer Service

As the statistics above show, consumers want to interact with businesses via SMS. However, just 7 percent of businesses actually take advantage of text-based customer support.

SMS is ideal for customer service situations where a customer needs to share a picture in order to describe an issue. It’s also great for scenarios where the customer wants to remain fairly discrete and/or avoid waiting on hold for long periods of time.

2. Appointment Reminders

By now, most customers have received an SMS-based appointment reminder from a doctor, dentist, or other service business. Even HVAC companies and real estate agents now send appointment reminders as text messages.

In addition to serving as reminders, these messages often offer additional options like canceling the appointment and/or tracking the appointment status. (The latter scenario is common for contractors visiting a property. Depending on the company’s native SMS integration, you may be able to pull up a map with the service professional’s GPS location to pinpoint when they’ll arrive.)

3. Shipping Notifications

All major ecommerce platforms now offer customers the option of opting in to receive shipping notifications. These notifications can be used to track progress and even make changes to the order or delivery.

SMS shipping notifications are particularly powerful in situations where the customer has to be present in order to receive the delivery. These up-to-the-minute notifications make it easy for the customer to plan their day accordingly.

4. Password Confirmations

In a day and age where cybersecurity is vital to the integrity of all businesses, SMS can add an additional layer of security to your strategy. It’s commonly deployed as an airtight method of verifying/confirming passwords.

SMS works as part of an advanced two-factor authentication strategy. Instead of simply requiring a password to log into an account (which can easily be compromised), the user also needs to have their mobile device on hand. A short four- or five-digit pin code is sent to the device, which must be retrieved and then inputted as part of the login process for two-factor authentication.

5. Internal Communication

SMS can be deployed as part of an internal communications strategy and leveraged at scale to provide HR updates, building and facilities alerts, staff scheduling updates, company meeting reminders, and even project management updates. It’s the perfect tool for reaching a large number of people with speed and efficiency. And, as we’ll discuss momentarily, the impressive open rate of SMS instills confidence that the message will be seen.

6. Surveys

Did you know that email survey response rates tend to fall below the 25 percent threshold? By adding SMS to your strategy, you should be able to generate better results and hit your feedback targets. (The key is to keep surveys short and simple.)

7. Promotions

When running a promotion, you want as many eyeballs on the promo as possible. And depending on the nature of the promo, there may be a very concentrated window of time where customers can take advantage of the discount, sale, or offer. SMS provides a fast and convenient way to reach customers at scale. When utilized alongside other traditional methods, it’s highly effective and engaging.

The Pros of SMS

As you can see, SMS can be used for much more than GIFs and emojis. When integrated as part of a larger strategy, it has the ability to support other initiatives and endeavors. Here are a few of the pros:

Impressive open rate. It’s widely known within the industry that text messages enjoy an open rate of 98 percent. (For perspective, most marketing emails are lucky to achieve an open rate of 15 to 20 percent.) Not only that, but 9 out of every 10 SMS messages are read within just three minutes! If you’re sending an important message and you want it to be read quickly, there isn’t another mode of communication that gives you direct and immediate access quite like SMS.
Superior response rate. SMS has a 209 percent higher response rate than email, phone, and Facebook. Not only that, but people respond quickly. (The average person takes just 90 seconds to shoot over a reply.)
Higher conversion rate. Consumers who receive a coupon via SMS are far more likely to redeem the coupon than other types such as email, web-based, or mailers. This is partially due to the fact that SMS coupons are far easier to use. All the customer has to do is pull out their phone and input a short code (and it works whether the customer is making an online or in-store purchase).
Low competition. Despite the clear efficacy of SMS, only a small percentage of businesses are currently using it as part of their marketing strategies. This is good news for the brands that do use it. This low level of competition gives you an even louder voice – making it possible to cut through the noise and quickly reach your audience with the right messages.
Cost-effective. When you look at SMS from a dollars and cents perspective, it’s far more affordable than almost any other marketing channel (especially when you consider the higher-than-average conversion rate). While costs decrease as you send more messages, the average SMS will set you back just a few pennies. That’s far less than physical mailers, advertisements, or even email (when you account for expensive CMS contracts).
Intuitive tracking. While SMS doesn’t give you nearly the same depth of insights that a website or email platform may, it’s far simpler to use. If you’re looking to track and measure revenue from an SMS campaign, you don’t have to worry about filtering through a bunch of complicated KPIs. It’s as simple as studying open rates and click-through rates. Based on these numbers, you can tell just how effective your campaign is.

SMS has clear potential. It’s all a matter of how you use it. When intentionally implemented with your budget and target market in mind, it can provide a rather impressive ROI. Having said that, it comes with a learning curve.

The Cons of SMS

While SMS has plenty to offer, it’s not perfect by any means. Here are some of the drawbacks and limitations that are worth considering:

It’s another “thing.” As any small business owner or marketer knows, it’s never as simple as adding a new tool, software, or promotional strategy. Though it may seem easy on the surface, SMS becomes another “thing” on your to-do list. And if you’re already stretched thin, you’ll have a hard time dedicating the time and creative resources that are required to make it a success.
Useless without phone numbers. SMS isn’t like PPC advertising in that you can flip a switch and reach people. In order for text message marketing to work for your business, you need a library of phone numbers. Nobody is going to give you their phone number voluntarily – you have to ask for it and get people to opt in.
Strict legal requirements. SMS is highly regulated and businesses that deploy text messaging as part of their marketing strategies must adhere to strict privacy laws. There are four primary stakeholders who oversee SMS laws in the U.S.: Cellular Telecommunications Industry Association (CTIA), Mobile Marketing Association (MMA), Federal Communications Commission (FCC), and Federal Trade Commission (FTC). You’ll have to follow their rules – specifically when it comes to obtaining explicit written consent to add a subscriber to your list – otherwise risk hefty penalties and other legal consequences.
Copy challenges. SMS service providers require you to keep your messages within a certain character limit. And in cases where you’re able to surpass this character limit, you pay a steep premium for doing so. This creates significant copy challenges. Your copy has to be tight and straight to the point. There’s a delicate balance between staying professional and using abbreviations and acronyms. You’ll have to decide how far you want to go.
Poor UX. SMS marketing is still pretty far behind in terms of user experience (UX). Not only do you have to keep messages text-based, but there’s no easy way to embed links with anchor text, bold key parts of the text, or optimize for visual clarity. Thankfully, users know this and have no expectations for anything greater, but it can provide an inconsistent experience when compared to other aspects of your marketing strategy.
Sensitive nature. SMS is seen as a very private mode of communication. Unlike email, which is regularly used by marketers, SMS is still primarily a person-to-person medium. In some cases, customers may find a promotion to be intrusive. This is why it’s very important to always get consent and to properly convey expectations ahead of time.

Hopefully these drawbacks don’t totally push you away from SMS. However, we’d be doing you a disservice if we didn’t at least mention some of the main challenges. Keep them in mind as you consider how to proceed.

How to Choose an SMS Marketing Platform

When you contrast the pros and cons, you’ll most likely find that SMS has the potential to be a net positive for your business. And if you do decide to go this route, you’ll need a plan to get started.

With so many different SMS marketing platforms on the market, we recommend carefully analyzing each based on a few factors. This may include:

Reliability. An SMS service is only as good as its reliability. It should feature 99.9 percent uptime to ensure your messages are able to be sent day or night. It’s also imperative that messages are delivered right away, so as to allow for quick visibility and timely action.
Ease of use. It doesn’t matter how reliable the platform is if it’s difficult to use. Consider a tool’s ease of use and request a trial or demo prior to signing on (if possible).
Integration. SMS doesn’t work very well as an isolated tool. In order to enjoy the full features and benefits, you’ll have to use it in tandem with other aspects of your marketing strategy. It’s for this reason that you want to think about integration. It’s for this reason that SMS tools with open APIs are attractive.
Cost. Most SMS service providers offer a variety of monthly plans that scale up in price as you send more messages. For example, you’ll pay a much cheaper rate for sending 100,000 messages per month than you would for sending just 1,000. You’ll also pay a premium for certain features and additional services.

With dozens of different SMS service providers to choose from, you’ll have to spend some time analyzing and comparing options. At the end of the day, choose the one that offers the best potential for scaling with your business over time.

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If you’re looking to develop a comprehensive digital marketing strategy that combines a variety of modes and mediums (like SMS), we’d love to chat. Contact us today, and we’d be happy to discuss the power of the content and how it can help your business grow in a sustainable manner.

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Ryan Nead

VP of Business Development at SEO Company

Ryan Nead is the Vice President of Business Development at search engine optimization services company, SEO.co. Ryan has spent the last 10 years as a digital marketing consultant working with enterprise clients and top brands on digital marketing initiatives that drive digital results. He has worked with brands like Smashburger, Fatburger, PHH Mortgage and Con-Way (now XPO Logistics). He resides in Texas with his wife and three children.