What is SMS Marketing & How Does it work?

What is SMS Marketing?

Definition: SMS Marketing messages still play a role in the age of the internet and smartphones. They can be used together with other marketing tools to create synergy effects . Content differs in SMS marketing in that the space for advertising is much smaller and therefore needs to be used more effectively. This sets limits, but at the same time creates unique opportunities that are not captured by other advertising methods.

How SMS Marketing Works

Companies usually use this form of marketing on a broad scale. This means that conventional messages are not sent from cell phone to cell phone, but that computers take over the sending of messages in bulk. Since each message can only be 160 characters long, advertisers have no time to waste and must get to the actual content immediately. This varies depending on the objective of the marketing campaign:

• The links it contains forward recipients to a website whose offer is described in more detail in the SMS message. Online shops, for example, achieve higher sales as a result .
• Coupons , which consist of a short character set, can also be included in an SMS. Here, too, there is a chance of an increase in profits.
• Aside from optimizing profits, SMS messages can also contain links that lead to surveys. This would make it possible to collect demographic data on a broad basis.

SMS marketing can be used for all purposes for which the short character set is sufficient. It is also not possible for a recipient to miss an SMS because the smartphone is not switched on. In this case, the message would be delivered as soon as the mobile phone is actively available again. In the end, the spent budget is guaranteed to end up with the recipient . Experts also deduce from this that there is a high probability of interaction on the part of the recipient.

SMS marketing as a universal resource

Not every smartphone is equipped with all available apps to receive messages. So-called feature phones without capacities for high computing power and without suitable operating systems are also guaranteed to be able to receive SMS messages.

As soon as a customer’s telephone number is available via which SMS marketing can and may be carried out, the chances are very good that that customer will also be reached via his device.

With other forms of online marketing, on the other hand, it is never guaranteed that users have compatible operating systems, browsers, apps and hardware. Outside of USA, SMS marketing is also widespread in emerging countries.

Important measures for SMS marketing

When using SMS marketing, it is important to pay attention to the following rules, among others:

• The legislator stipulates that advertising may only be carried out if potential SMS recipients have previously given their consent via an opt-in procedure . Merely owning a cell phone number does not entitle companies to advertise through that number. In addition, it is stipulated that those SMS messages must also offer the possibility of permanently opting out of the advertising program. Consent can also be obtained beforehand via websites or emails and does not necessarily have to be requested directly.
• SMS marketing only works if advertisers collect a high level of data about the recipients . This is the only way to deliver advertising in a way that is appropriate for the target group. A distinction is made, among other things, in region, age, gender, interests, purchasing behavior and much more. This segmentation is particularly useful for existing customers: they do not want to receive a “welcome voucher“, but rather advertising that is specially tailored to their situation. However, advertisers must inform the recipients of this data collection.
• Analytics methods also exist in SMS marketing. They allow important key figures to be obtained and evaluated. This is especially important when monitoring budgets : advertising that doesn’t work poses a financial risk for companies in the long run. By monitoring the ROI, advertisers quickly learn whether advertising is worthwhile – and if so: whether it is there is still room for improvement.

Purpose of SMS Marketing

Similar to other marketing measures, SMS messages can also be used in a variety of ways. Therefore, successful companies conduct an action determination in advance. Key data such as the content orientation and thus also the target group orientation are determined therein.

There is great potential here for fine adjustments depending on the customer: SMS messages can be aimed at premium customers as well as those looking for discounts, at women or men, young people or seniors, at people in mountainous regions or by the sea (e.g. leisure and sport equipment for sale) and the like.

That exact orientation for a higher willingness of customers to interact with the messages sent. Links in the SMS messages can lead to websites where customers can find out more about the topic being advertised. Identifying a purpose in advance is key.

SMS messages that are not focused are confusing due to the extreme scarcity of characters and do not achieve the desired effect of engaging the customer with the material provided by the advertiser. A meaningful call to action can also increase the recipient’s willingness to act.

Attraction of SMS Marketing

For advertisers, SMS marketing is an instrument that, unlike various variants of online marketing, generates a certain call for action on the part of the recipient. Most smartphone and cell phone users do not respond very quickly to emails or messages in apps and instant messengers, since this form of messaging is now constantly occurring and has therefore lost its urgency.

Smartphone users, on the other hand, receive SMS messages less frequently today – often not at all in private circles – which is an advantage for SMS marketing.

Messages received via SMS are therefore often read quickly and extensively. The latter point is justified by the fact that a message can only have a character set of 160 characters. Messages of this length can be read completely even under the greatest time pressure , which is what most recipients then do.

From this, advertisers can deduce that their advertising message reaches the customer 100{b2e062dacaa682ac06b65f50eda167b816e329330e76ab97664011f321ee08e4}. This distinguishes SMS marketing from longer blog posts in content marketing, for example, which customers rarely read to the end.

Errors in SMS marketing

Steps that do not lead to success or even achieve the opposite effect also exist. These three points indicate that:

• If the frequency of SMS delivery reaches a critical level, customers no longer feel informed. Instead, the feeling of being spammed by a particularly intrusive company takes over. Analysis methods help here, which determine at which distribution frequency per month recipients react positively and when the delivery turns into negative reactions.
• It is not a good time to receive text messages early in the morning or late at night . In these times, most people want to spend their time undisturbed. Here, SMS marketing also suffers from the fact that it often does not reach its goal. If a person reads a message from a company at the wrong time, the user quickly deletes it.
• Non-targeted advertising also quickly annoys customers. People aged 40 and over do not want to be addressed as teenagers – and vice versa. Unsubscribes from the SMS procedure are the result if demographic information is not included in the delivery. It is all the more important to determine the purpose in advance at the start of the campaign.

Challenges for Companies

Compared to other advertising measures, SMS marketing can be quite expensive depending on the region and the volume of messages sent . In addition, the integration of software solutions for the mass dispatch of messages is necessary.

Those costs can be a hurdle , especially for small businesses , as it takes a little time to align the budget spent and the ROI. Another problem could arise from the fact that once messages have been sent, they cannot be undone.

Inappropriate content can turn potential customers away from the company. With other forms of online marketing, it would be possible to change banners, blog entries or tweets. Therefore, the company should carefully check their messages in advance and only  deliver text messages with correct content to the recipients