Digital Marketing
XX min read

The Power of SMS Marketing: How To Increase Customer Engagement

Published on
April 15, 2023
SMS marketing is one of the most common business strategies today. But how does it work and why should you do it? Learn the answers in this article.

Approximately 6.2 billion people use cell phones worldwide today, a jump of 4.2 percent from last year. The figures make SMS marketing highly viable almost by default. However, The power of this marketing strategy does not rely merely on assumptions. Facts and numbers prove it.

According to Grand View Research, the SMS marketing segment in the US can reach a value of $12.6 billion by 2025. The best thing about text message marketing is its flexibility. It works for any industry, from physical stores and e-commerce to corporations and small businesses.

Of course, actual results will vary according to the marketer's expertise. This fact makes it crucial for business owners to understand SMS marketing thoroughly and, more importantly, partner with a trusted specialist.

Key Takeaways

  • SMS marketing ranks among the most effective methods of increasing customer engagement today.
  • Several types of SMS marketing engage customers in different ways.
  • SMS marketing should be part of an overall marketing campaign to boost results.
  • Working with experts is the most efficient way of implementing SMS marketing for any business.

Never miss another story

Stay ahead of the game with Archive. Automatically capture every Instagram Story, Feed Post, Reel, and TikTok Video your brand is tagged in.

Understanding SMS Marketing and Customer Engagement

SMS marketing is digital marketing that uses text messages to connect with existing and potential customers.

Also called automated text marketing, this method is often compared to email marketing, which has an open rate of 6 to 20 percent. According to Gartner, SMS marketing is superior in this aspect, with an open rate of up to 98 percent.

The high open rate implies that the method offers excellent opportunities for customer engagement. Salesforce research shows that 80 percent of customers give equal importance to their experience with a brand or company and the actual products or services it provides. This revelation about customer engagement further highlights the value of SMS marketing.

How SMS Marketing Works

Marketing SMS is unique from personal SMS, not just content-wise but also technically. Unlike regular texts from conventional cell phone numbers, marketing texts are sent from shortcodes. Businesses and organizations use these five- to six-digit phone numbers to send bulk SMS messages. Shortcodes are naturally "short" to make them easier for customers to remember.

Content-wise, SMS marketing messages are business-oriented and may be one of two general types: campaign or transactional. Campaign messages communicate promotions, such as sales or freebies, while transactional messages are specific to an event or behavior, such as order confirmations, abandoned cart alerts, or appointment reminders.

Common Forms of SMS Marketing

There is no limit to the campaign or transactional marketing messages a company can send subscribers. The team can get as creative as possible and use the most innovative marketing tools available, but it's usually best to include the classics, such as:

Virtual coupons

In 1887, Coca-Cola distributed the world's first coupons offering customers a complimentary glass of soda and a discount if they bought a few bottles. Over a century later, the strategy lives on. Couponing continues to boost business sales by offering people incentives for their purchases. The technique has also evolved into more modern forms, including virtual coupons.

These methods are more efficient today, especially with SMS marketing software allowing text automation and smooth integrations. These virtual coupons can also offer various types of customer perks, such as pricing reduction codes and discounts through QR codes.

Besides efficiency, SMS coupons offer many more advantages than regular coupons, such as cost-effectiveness and single-use assurance. With advanced auditing processes, SMS marketing campaigns can be documented more accurately and extensively. Best of all, SMS coupons have greater extended validity than their physical counterparts.


Promos are time-sensitive offers that give customers all kinds of treats, such as discounts, freebies, or clearance sales. This technique creates a sense of urgency in people to buy products now because they know the offer will end soon.

Marketers create promos around the scarcity principle, which leads to increased demand and sales. Hence, businesses invest their money now and then, even at a loss initially. Another good thing about this technique is its immediate impact on sales.

Unlike other types of marketing, strategic promos can pull up sales on the spot. SMS promos are particularly advantageous because they are cost-effective and straightforward to run and track. The technology itself, which banks on quick communication, makes the technique even more effective.

Mass messaging

Sending text messages in bulk is another form of SMS marketing, and there are plenty of reasons to do it. Consider this scenario: your brand is scheduled to launch a new product on a particular date and time. Several activities are in store for this event, including contests people have previously signed up for.

If you suddenly need to postpone the product launch due to reasons beyond your control, mass messaging will allow you to reach people and announce the postponement using the most efficient SMS marketing platforms.

Through mass messaging, you can make changes to the event's time, date, and venue in a very timely manner. People need to know about any changes as soon as possible, and mass text messaging is the fastest way. For customers, this is beyond speed. It's about a brand that cares about them enough to tell them what they need to know promptly.

SMS contests

SMS contests are another engaging way to build relationships with customers. Contests are traditional crowd drawers, building on the excitement of a possible prize. Contests through SMS are some of the easiest for marketers today.

It’s a straightforward process where you send a text message about the contest, rules, and deadline. The system selects the winners and informs them through SMS. Winners can receive various prizes, such as gift cards, complementary products or services, or even cash. SMS contests are one of the most accessible marketing techniques to pull off and also one of the most engaging.

Loyalty programs

Loyalty programs encourage people to patronize a brand and keep choosing it over competitors. Loyalty programs can vary in mechanics, depending on the campaign.

For example, a company may assign a level to each customer based on the number of times they've purchased within a certain period. Each level corresponds to a set of incentives. The more purchases the customers make, the higher their level goes and the more perks they get.

Another loyalty-based SMS marketing program encourages customers to recommend a brand or product on their social media accounts or in person. Each time someone brings in a new customer, they receive an incentive, such as special offers or free products.

Loyalty programs are highly effective in building long-term relationships with customers. When people feel valued, they usually reciprocate by giving their loyalty. For this reason, many businesses are willing to invest in loyalty programs because they know the payback is enormous.

Celebratory messages and emergency warnings

Among the ways marketers can make customers feel genuinely valued is by communicating without asking for anything. For example, brands can send out holiday greetings just to spread cheer or weather alerts to show they care.

Customers usually appreciate it when brands communicate without making them purchase anything. Some may find such messages annoying, but the marketing in those texts still works. According to the mere exposure principle, people respond better to familiar brands. Hence, the more people feel a brand's presence, the likelier they will patronize it.

Image by Charles de Luvio on Unsplash

How To Use SMS To Increase Customer Engagement Rates

SMS marketing can roll out in many ways, depending on the marketer's approach and resources. It's also the reason not all SMS marketing generates the same results. Some campaigns succeed, while others fade away with a loss to the business. While there are no clear-cut guidelines for implementing SMS marketing, below are at least six cardinal rules every text marketer must follow:

Ensure opt-ins and unsubscribe links

SMS marketers have a lot of freedom in conceptualizing their strategies, but there are critical components they must always take notice of. One is the opt-in condition. No business should send marketing messages to anyone who has not expressly indicated a desire to receive them.

Otherwise, these messages become intrusive and may work against the sender. People can usually subscribe to marketing texts through the business's website, social media accounts, or mobile devices. Once people have opted in, the company can send them marketing texts. However, the recipients must still have the choice to opt out through an unsubscribe link.

As with the opt-in condition, adding an unsubscribe link is crucial because people should always have a choice about the messages they receive. Furthermore, this is a sign of respect — one of the most vital SMS marketing best practices that customers always appreciate.

Master timing

Timeliness is one of the essential requirements for a successful SMS campaign, especially with time-sensitive transactional messages. The business should always consider that customers may need to take specific steps after each update they receive.

For example, delivery notifications should reach customers in real-time and reasonably in advance. People then have ample time to prepare payment or be present during the delivery.

While timing is important, SMS marketers should also pay attention to the nature of the message and keep common courtesy in mind. No one wants to receive non-emergency messages in the middle of the night, especially marketing notifications.

CTAs with a branded link

As with any other marketing technique, a call to action (CTA) boosts the power of a text marketing campaign. With a CTA, people can click or tap a link to learn more details instead of forwarding them to the business's website.

Branded links, however, have more authority and higher click-through rates than non-branded links. A brand is more than just a look or feel. It can also provide technical advantages, such as getting higher click-throughs.

Simply put, brands give credibility to text messages, especially with scams destroying the reputation of legitimate SMS marketing automation. Branded links increase customers' trust, and this helps increase an SMS campaign's chances of success.

Encourage feedback

SMS marketing goes beyond promoting products or services or providing updates or alerts to customers. It also serves as a channel for a business to understand its customers. With the overwhelmingly large number of mobile phone users today, SMS marketing makes a logical option to solicit feedback. The company can add a feedback form link to the SMS or provide an opportunity to reply directly to the text.

A brand's willingness to listen helps improve customer satisfaction and loyalty. It shows that the company is interested in what people have to say.

This additional avenue for customers to express themselves is also helpful to a business aiming to improve its offerings. Through this form of community marketing, brands can create more valuable customer experiences with better products and services, ultimately leading to its success.

Text messaging customization

Customization works in marketing because it is one of the ways that customers can feel a brand's sincerity. It tells them this business truly wants to reach customers outside of doing it as a commercial transaction.

Of course, customization requires knowledge of the customer's personal details, most especially their name. You can usually get these details from the forms people fill out when purchasing or sending inquiries.

Personal details allow a brand to tailor each message to the customer, making it more persuasive. And one of the simplest ways you can customize a marketing text is by adding the recipient's name to the message.

With their name in the SMS, a customer can feel like the message was created specifically for them, even if it was made for an entire customer list. It is also a more personal but indirect way of making the customer feel the brand's presence.

Company or brand name in the shortcode

Many companies send marketing texts from a shortcode that doesn't bear their name. This is bad practice for branding and may defeat the purpose of the SMS campaign to an extent.

Text marketing is a great way to reinforce a company's branding. The business loses that precious opportunity when its name isn't even in the text.

Indeed, a marketing text from "Pioneer" will do better for the brand than one that only shows "1234" as the sender. Adding the brand name to the shortcode can help boost SMS marketing campaigns by increasing the chance that your company stays top of mind.

Measuring the Success of SMS Marketing

Image by Tima Miroshnichenko on Pexels

SMS marketing is similar to other marketing methods in that its results must be scientifically quantified. Unless progress is trackable with established metrics, marketers will never know how effective their strategies are. Below are typical parameters used to determine the success of an SMS campaign:

Interaction or response

Interaction or response is measured by dividing the total number of text recipients by the number of SMS subscribers that took action after receiving the text. This action can be a click, an app open, or a click-to-call, for example.

A high interaction or response rate means users are finding the SMS campaign relevant. Conversely, a low interaction rate means people are not acting on the message, and improvements should be in order.


The delivery rate refers to the number of messages that arrive in the recipients' inboxes relative to the total number of messages sent. This number is crucial because it can indicate problems with the carrier, spam filters, or other technical issues. No matter how good the SMS marketing strategy is, it amounts to nothing if people aren't getting the messages.

Withdrawn subscriptions

When an SMS campaign's unsubscribe rate is high, it could mean that the recipients no longer find the messages helpful. It could also indicate they feel they're getting too many messages or getting spammed. In other cases, they may not recognize the sender or even remember opting in to your mailing list.


An SMS campaign's conversion rate reflects the number of people who completed an action desired by the sender. It could be redeeming a coupon or signing up for a list. SMS messaging generally has high conversion rates. After all, when someone gives out their phone number, it usually means they're interested.

Return on investment (ROI)

ROI for SMS campaigns can be exact since the calculations are based on particular incentives. A business may calculate its SMS messaging ROI yearly or monthly, depending on the type of campaign they're running. In any case, it's wise to compare ROIs from other marketing channels to know which gives the highest returns.

Did you know? The world's first mobile ad was shared via SMS in the 2000s by a Finnish news provider that sent sponsored headlines to users. This development paved the way for more innovative mobile marketing techniques, such as MMS marketing, in-game mobile marketing, and QR codes.

Work With a Tested Expert in SMS Marketing

Compared to email and other digital marketing channels, SMS marketing remains unsaturated to this day. Therefore, it is one of the best customer engagement techniques businesses from most industries can employ.

Then again, despite the unique and proven advantages of SMS marketing, it cannot work independently. The guidance of experts is critical, primarily because this technique works best when part of a comprehensive marketing plan and strategy.

To ensure good results and avoid wasting marketing effort, time, and resources, it's often best to work with a seasoned SMS marketing service, such as Archive.

The benefits of SMS marketing are easy to understand, but the work behind it requires time and focus. Contact us today, and we'll help you maximize your gains from SMS marketing.

FAQs on SMS Marketing

What legal obligations come with SMS marketing, if any?

Companies must observe the legal and privacy guidelines set by the Telephone Consumer Protection Act (TCPA) and the state's privacy laws before implementing SMS marketing. Violators pay liability charges of as much as $1,500 per text. The Federal Communications Commission also has its own rules governing all electronic and media communications, including SMS marketing.

What is the importance of audience segmentation?

Audience segmentation allows a marketer to reach the right target audience with the right marketing text at the right time. For example, it will enable a company to send a targeted message promoting a store opening to people local to the area. It can also help restaurant owners identify regular customers who haven't returned in a while and send them a tempting come-back offer.

What is an owned marketing channel?

An owned marketing channel is a channel that comes under the complete control of a brand. It is a space where the brand sets all the rules and has no competitors vying for the same customers.

Examples of an owned marketing channel are a website, app, social media page, and forum. Owned marketing channels are vital because they grab their audiences' exclusive attention, with no competitors. As a result, these channels also have higher ROIs.

Elevate your UGC management from chaos to artistry with Archive
Begin using Archive for free and discover the amount of time you can save with its powerful capabilities at your disposal.

Join Archive's Newsletter

Subscribe to Archive's newsletter for exclusive insights, tips, and industry trends delivered to your inbox.
Awesome, you're in! Get ready for some epic updates!
Oops! Something went wrong while submitting the form.