How Much Does SMS Marketing Cost?

The number of mobile phone users has been rising rapidly, and it is happening worldwide. There are over 4.6 billion registered mobile users across the globe.

Statistical data indicates that 98% of SMS campaigns have an average open rate, which just goes to show how widely used SMS marketing has become. It is undoubtedly one of the most well-liked and profitable marketing strategies in use today, as 80.5% of consumers check their notifications within five minutes of receiving a text.

Infusing SMS solutions into your marketing plan allows you to interact with consumers in real-time, which improves brand awareness and helps you build stronger bonds with them. You can send notifications, invites, reminders, and announcements to your consumers using SMS marketing.

For instance, you can SMS clients a coupon code for an intending sale, ask them to sign up for your loyalty program, send them surveys and polls, and give updates on the launch of a new product.

How much does SMS marketing cost?

It is always best to consider the price before going into SMS marketing. This means you must consider the cost per message, keyword, and international SMS rates, all of which will determine the SMS marketing pricing ranges.

We will discuss the various factors to consider when calculating the cost of SMS marketing:

1. Cost per text message

Many factors affect SMS marketing costs ranging from the geographic reach, message volume, service provider of your choice, and any campaign keywords.

Longer texts will cost more money, for example, below is a quick table that shows the price according to text length.

The cost of sending SMS also varies according to the country in which they are being sent. Marketing products typically provide monthly plans with a text message-sending cap.

2. SMS campaign cost

A simple SMS message is not the same as an SMS campaign, a campaign is typically sent to plenty of contacts and is highly personalized. Companies use SMS campaigns to communicate with customers by providing offers, news, and updates.

Multiply the cost per SMS by the desired number of texts you want to send so you know the cost of your SMS campaign. For cost estimation, you should also take the message’s length and the platform into consideration.

For instance, for a campaign of 1000 texts in the US, using one of the figures above will be: $0.015 x1000=$15

3. Cost per keyword

Keywords are brief, targeted words or phrases that users text to a specific shortcode (a shortened phone number commonly used for SMS campaigns). Such keywords have a specific meaning; for example, users text NEWS to 1234567 to subscribe to your platform’s news service.

NEWS is the keyword and 1234567 is the short code- The prices may range from $0.02 to $0.10 depending on the location of where it is sent.

4. International SMS marketing

Where you send SMS messages will also affect the cost because different countries have different SMS rates.

The cost per message can vary depending on the carrier costs and SMS restrictions in different countries, but certain service providers may be able to save costs because of their ties with local carriers.

The normal price range for international SMS marketing is between $0.25 and $0.50 per message.

Hidden Fees (The Unseen Costs)

• Carrier Fees: SMS communications are routed through carriers, and each one has the potential to charge extra, which can drastically increase your total cost.
• Compliance and Regulatory Fees: Making sure your campaigns abide by regulations such as the TCPA or GDPR may need you to spend additional money on compliance tools or legal counsel.
• Integration and Automation Costs: You may spend more if custom solutions or premium plans are needed to seamlessly integrate SMS marketing with your Shopify store and other marketing tools.

How to calculate SMS marketing ROI?

Return on investment (ROI)is the long-term financial success of a specific investment made in a company, that means your ROI essentially indicates the return on your investment in a plan.

Calculating your return on investment (ROI) for SMS marketing is simple: dividing the net return by the investment cost and multiplying the outcome by 100.

SMS marketing ROI

The entire amount you invested in the SMS marketing approach is the investment cost, and your entire earnings from the SMS marketing plan is known as the net profit.

For instance, let’s say you ran an SMS campaign of 2000 messages monthly, and it is at the rate of $0.049 per text, the total cost of investment would be:

$0.049 x 2000=$98

Imagine you had a total of $1000 from that campaign, your ROI would be;

($1000/$98)x 100=1020.41

That means your ROI for the month is 1020.41%, but there are some factors that affect ROI, let’s take a look at how to calculate them;

1. Calculate the SMS cost per click

The cost per click on any embedded URLs in your campaign will immediately impact your net earnings. When it comes to SMS marketing, cost per click (CPC) is the amount you have to spend each time one of your clients clicks on a link in the message.

Divide the SMS campaign’s total cost by the total number of clicks to determine the cost per click (CPC). The following is the formula:

For example, if you spent $60 on an SMS campaign and received 40 clicks in the SMS message:

CPC=$60/40 clicks= $1.5

2. SMS conversion rate

The percentage of customers who take the desired action after reading your SMS is your SMS conversion rate. Divide the total number of conversions by the total number of delivered messages, then multiply the result by 100 to get the percentage.

3. Calculate cost per lead

The cost per lead (CPL) measures the cost of generating a potential customer for your business. To calculate this, you divide the total cost of SMS lead generation by the total number of customers.

For example, if you spent $300 on lead generation and got 20 leads, your CPL would be:
$300 / 30 = $10

Cost-saving strategies for SMS marketing

Putting cost-saving strategies into practice while optimizing SMS marketing ROI (Return on Investment) requires a strategic approach that balances effectiveness and efficiency. These tips and strategies can help you, particularly if you’re running a Shopify-powered eCommerce site, make the most of your SMS marketing efforts while spending less money.

1. Segment your audience

Segmentation helps you send messages only to the subset of your audience most likely to interact with them. By categorizing your audience based on their purchase history, preferences, and behavior, you can tailor your messages more precisely, increasing conversion rates and reducing wasted messages.

2. Optimize send time

Timing can also affect SMS marketing- Make sure you analyze your customer data to know when they will most likely read and act on your messages. Avoid sending messages during off-hours when they are less likely to engage.

3. Use A/B Testing

A/B testing allows you to compare different versions of your SMS campaigns to see which one performs better. This can include variations in messaging, offers, or timing. By continually optimizing based on A/B test results, you will improve your marketing efficiency, reduce costs, and increase your ROI over time.

4. Negotiate Volume Discounts

Negotiate with your SMS provider for better rates if you’re sending SMS messages in large volumes. Providers often offer tiered pricing or discounts for high-volume senders, which can significantly reduce your cost per message.

5. Integrate SMS with Other Channels

Integrating your SMS marketing with other channels (email, social media) creates a good customer experience. You can use SMS for time-sensitive or high-priority communications and other channels, like WhatsApp and e-mail, for long-form content. This integrated approach maximizes your overall marketing efficiency and effectiveness.

Conclusion

You need to understand SMS marketing prices if you’re looking for an efficient and pocket-friendly marketing technique.

Also, think about other things than price when selecting a service provider, things like message volume, geographic reach, customer support, and integration possibilities and once you’ve chosen the right SMS marketing pricing plan, it will surely help drive engagement and reach your customers.