What is SMS Marketing and How to Use it for Your Business

Marketing your company can require a significant amount of time and money. The sheer volume of emails most individuals receive daily and changes in social media algorithms can make it challenging for restaurant operators and other business owners to see results from their marketing campaigns.

Text message marketing, also referred to as SMS marketing, is a highly effective method for reaching customers and generating a significantly better return on investment. Customers favor it as well; 70% agree that it's a great way for companies to catch their attention.

In this blog, we'll discuss:

• What is SMS marketing?
• Is SMS marketing effective?
• Advantages of SMS marketing
• Best practices using SMS
• Rules and compliance for SMS marketing
• SMS marketing techniques to try
• Assessing the performance of your SMS marketing initiatives
• Monitoring the ROI of SMS marketing
• Examples of effective SMS tactics

What is SMS Marketing?

Businesses can use short message service (SMS) marketing to send promotional text messages to their customers. Simply put, text marketing and SMS marketing are interchangeable terms.

Similar to email marketing, text marketing requires customers to opt in. However, SMS messages are much shorter than emails and are more likely to receive quick responses.

Is SMS marketing effective?

SMS marketing works best when messages are carefully crafted and sent to the right audience.

SMS advertising is a highly effective marketing channel. With nearly 97% of US adults owning a cell phone, it's a direct way to reach a vast audience. Moreover, consumers are significantly more likely to engage with SMS messages compared to email, making it a compelling option for businesses seeking strong returns on investment.

This doesn't mean SMS marketing should replace emails; longer messages still have their place in marketing campaigns. However, SMS messages can be a valuable addition to a comprehensive approach, especially when you properly categorize your customer based on factors like location or past purchases.

SMS marketing has emerged as a highly effective tool for businesses to connect with their customers in a direct and personal manner.

Digital Marketer, Mahedi Hasan

Quote source: LinkedIn

Here are a few interesting stats about SMS marketing

These statistics are a great way to show businesses exactly why SMS marketing is effective: 

• Low unsubscribe rate (under 3%)
• High click-through rate (over 20%)
• Strong conversion rate (exceeding 29%)
• Rapid response times (within one hour)

How does SMS marketing work? 

With consent-based communication, SMS marketing allows you to interact with your contacts by sending text messages right to their phones.

To send text messages to the mobile number your contacts offer, you must first get their consent. After that, you can compose and send SMS messages with content or a call to action. Although your contacts cannot reply to you directly through the SMS message, you can provide them a URL to click in order to receive more specific information.

The advantages of SMS marketing

Compared to other digital marketing strategies, SMS marketing offers several benefits.

Speed

Text message marketing is remarkably fast. Unlike social media or email marketing, it requires no image creation. The character limit means concise messages, and they can be produced and sent swiftly.

SMS messages also reach people faster than emails or social media posts. When a text message is received, your customers' phones instantly notify them. In contrast, viewing other marketing materials requires opening an email customer or social networking app.

Easy to track and measure

SMS marketing campaigns are easy to track and measure. You can quickly see how many messages were sent, how many were opened, and how many recipients took action, such as clicking on a link or making a purchase. This data can help you assess the effectiveness of your campaigns and make informed decisions for future marketing efforts.

For this, you need to look at SMS tools like Twilio or Everlytics.

SMS marketing provides unparalleled transparency and measurability. With precise metrics like delivery rates, click-through rates, and conversion rates, businesses can make real-time adjustments to optimize their campaigns and improve ROI.

- Josh Malin, Marketing Director at SimpleTexting

High open rates

Texting is the most effective way to ensure your messages are opened. The open rate for marketing texts is an astounding 98%, nearly 100%. In contrast, email marketing struggles with significantly lower engagement rates, with Mailchimp reporting an average open rate of just 19.77% for restaurant emails. 

High response rates

High open rates lead to high response rates for SMS marketing. While email click-through rates typically hover around 7%, SMS marketing boasts an impressive average response rate of 45%. Customers are much more likely to click on a link in a text than in an email.

Opt-in marketing

SMS marketing is typically opt-in, meaning that your customers have already expressed interest in receiving your messages. This ensures that your audience is more receptive to your messages, as they have chosen to receive communications from your business. This opt-in nature can lead to higher engagement rates and a more positive customer experience.

Best practices for using SMS marketing

SMS marketing doesn't have to be complicated. Without the need for design components, it's even simpler than email or social media marketing.

Here are the steps to start using SMS marketing:

Obtain customer consent

In the US and Canada, it's illegal to text someone without their explicit consent. Ensure you have permission from your recipients before launching an SMS advertising campaign. Remove anyone whose consent status you can't verify.

Use a tool to send your SMS

Manually sending SMS messages to each customer is impractical, so you'll need software to automate your SMS marketing. You can use an integrated system like Eat App, that offers text message marketing.

With Eat App, you can manage your customer's contact information and put together SMS campaigns. By selecting a reservation software that integrates with your point-of-sale (POS) system, you can gather information, handle data, and send messages from the same platform where you manage bookings.

Create a message that makes sense

Text messages should be concise. Aim for one or two sentences or roughly 160 characters.

Introduce yourself briefly so your customers know who you are. Clearly state the purpose of your message—are you promoting an event, requesting a review, or seeking feedback?

Include a clear call to action at the end of your message and, if appropriate, add a link.

Get the right message across at the right time

Customize your messages to different customer segments. A customer who frequently visits your restaurant will respond differently than one who comes by for coffee occasionally. Similarly, a satisfied customer will be more receptive to certain marketing messages than a dissatisfied one.

Group your customers according to their behavior. Use a platform like Eat App that utilizes POS data to automatically segment customers, ensuring your messages are targeted and effective.

Monitor outcomes

After sending your message, monitor its effectiveness. Check how many people clicked on any included links. If you used a unique discount code for your SMS campaign, track how many customers used it and the revenue generated. Compare these figures to the number of messages sent.

Don’t just monitor—monitor efficiently. Manually tracking results can be time-consuming. Automated report generation through SMS marketing systems allows you to spend more time acting on the data and less time gathering it.

Give customers the option to withdraw

If you want your customers to stop receiving SMS communications, you should provide them with an option to opt out. Opting out is not only required by law but also demonstrates that you are acting in good faith. You want to connect, not bombard people.

Test and optimize regularly

Regularly test different elements of your SMS campaigns to see what resonates best with your audience. This includes experimenting with message timing, content, and call-to-action phrases.

Use A/B testing to compare different versions of your messages and determine which one performs better. Continuous optimization based on testing results will help you refine your strategy and improve overall campaign effectiveness.

As Neil Patel, a well-known digital marketing expert, says, "SMS marketing is one of the most effective ways to engage with your customers in real time. By personalizing your messages and testing different approaches, you can significantly increase your conversion rates and customer satisfaction."

The future of SMS marketing

If you're anything like us and notice the increase in AI and technology as marketing tools, you've probably wondered: what is the future of SMS, and how will this impact my marketing strategy?

Not too long ago, SMS was considered an outdated method of communication. But, as a Content Manager, I've realized that just because something was created years ago doesn't mean it's no longer effective. Take word of mouth, for example. No matter how much digital information we receive, knowing that a neighbor or friend enjoyed a product or visited a restaurant makes us more interested in trying it ourselves.

So, for the sake of argument, let's take a look at what the future holds for SMS marketing.

SMS trend you can expect

Staying updated with future trends is important for restaurants to remain competitive and effectively engage with their customers.

AI-Driven Personalization: Artificial intelligence is transforming SMS marketing by enabling highly personalized and targeted messages. AI can analyze customer data to create tailored content that resonates with individual preferences, leading to higher engagement rates and customer satisfaction. Or, so we hope! 

Rich Communication Services (RCS): RCS is set to revolutionize SMS by offering a richer, more interactive experience. Unlike traditional SMS, RCS allows businesses to send multimedia messages, including images, videos, and interactive buttons, creating a more engaging and dynamic customer interaction. This could also be achieved by WhatsApp. 

Impact of 5G on Mobile Marketing: The rollout of 5G technology is expected to improve the speed and reliability of mobile networks, making it easier for businesses to deliver real-time messages and rich media content. This will enable faster and more seamless communication with customers, improving the overall effectiveness of SMS marketing campaigns.

Eat App's AI Messaging: Struggling to come up with compelling descriptions to help promote your restaurant events? Eat App's AI-driven messaging offers advanced two-way SMS (and WhatsApp) communication and can auto-suggest content that turns viewers into customers. This feature helps restaurants have real-time conversations with their customers, giving personalized responses and improving the overall dining experience. By using AI-driven messaging, restaurants can stay ahead and offer a more effective and responsive communication channel.

Laws governing SMS marketing and compliance

Engaging in SMS marketing requires navigating a complex web of rules and regulatory requirements that can differ greatly depending on the industry and location.

Understanding the laws pertaining to consent is essential. Customers must voluntarily choose to receive communications, which is a strict requirement that varies by location. For example, the Telephone Consumer Protection Act (TCPA) in the US and the General Data Protection Regulation (GDPR) in the EU both require explicit agreement and provide simple ways to opt-out.

Every industry might also be subject to specific regulations, particularly in cases involving sensitive data, such as in the banking or healthcare sectors. Restaurants need to ensure they are correctly obtaining consent and that the content they deliver is appropriate and pertinent to their target audience.

Regulations are particularly strict for dealers of sensitive products like tobacco and alcohol. To avoid advertising to minors and ensure marketing communications are sent only to individuals who have given their express consent and are of legal purchasing age, these industries are subject to stringent regulations.

Many marketing platforms prohibit SHAFT content (sex, hatred, alcohol, guns, tobacco, and CBD) due to strict CTIA regulations. These restrictions can be burdensome for merchants, potentially making SMS marketing less appealing for certain industries.

Key points to remember

• Clear Consent: Customers must give their unambiguous, explicit approval to receive marketing communications. This often involves a double opt-in process where the customer confirms their consent through a second verification step.
• Age Verification: Restaurants must have strong age verification procedures at the time of opt-in and purchase if they wish to send SMS messages about products restricted to those over the age of 18. This ensures compliance with laws and targets only individuals of legal age.
• Sensible Messaging: Merchants must ensure their marketing materials do not promote excessive or careless use of alcohol or tobacco. Sentences should be carefully chosen to follow legal and moral requirements.
• Warnings about Health: Depending on the region, marketing messages for alcohol, tobacco, and health-related products may require specific health warnings to comply with regulations.
• Local Laws: Rules can vary significantly by area. For example, there may be prohibitions against using SMS to advertise tobacco products in some places. Specific local regulations should be considered, such as Florida's prohibition of SMS marketing between 9 PM and 8 AM local time and California's requirement for explicit consent to record SMS messages sent to consumers.

Restaurants seeking comprehensive and current information on SMS marketing laws should consult legal professionals in their specific area or sector. Resources like the Mobile Marketing Association provide valuable guidance and best practices to help businesses navigate complex SMS marketing regulations.

Try these SMS marketing techniques

Greeting texts

Try sending a welcome SMS once a customer joins your loyalty program, much like you would with an email. For new sign-ups, you can even provide a special discount to entice customers to make additional purchases from you. 

Delivery messages

For restaurants that offer delivery, using text messages and push notifications can efficiently keep customers updated on their order status. Provide your customers with the utmost convenience through text-in ordering—an interactive and user-friendly method for placing orders without needing to call.

Introduction of new products

Use SMS advertising to instantly notify customers about new product releases, driving immediate traffic to your website or store. This is a great approach to promote new products and increase traffic. We advise against doing this more frequently than once a season as you could end up spamming your clients. 

Reopening your restaurant

When your restaurant is scheduled to reopen after renovations or a temporary closure, promptly inform your loyal diners. Use SMS marketing to highlight changes like new dining protocols, updated menus, and revised hours. Engaging your dedicated SMS subscribers first ensures that everyone stays informed. 

Huge discounts 

Offering flash promotions to customers who have joined your loyalty program is a fantastic way to thank them. Send out an SMS to your customers informing them of a special offer that is exclusively available to them. 

A great method to let them know you appreciate their business is to give them first dibs on something or reserve a sale to an event just for them. 

Seasonal sales

Clear out your inventory and boost sales with a seasonal text campaign.

To deliver more tailored messaging, consider segmenting your sends based on specific customer groups. For example, send customers who have previously dined at your restaurant a text message with a link to your current special menu or promotions. Integrating your POS with an SMS marketing platform simplifies customer segmentation by providing instant access to valuable sales data.

Request survey responses from customers 

You can find out more about what your customers want from you by using surveys. Sending a survey link via SMS is a better way to boost response rates than using other marketing methods. With programs like Google Forms, Eat App's Guest Survey, or SurveyMonkey, you may quickly and simply build a brief survey. 

Cross-promote on multiple social media platforms

Expanding the social media presence of your company might take up a full-time job. Expand your social media following by encouraging SMS subscribers to connect with you on their preferred platforms. Adding a social media gift to this could make it more alluring.

"Cross-promoting on multiple social media platforms allows businesses to reach a larger and more diverse audience, increasing brand awareness and engagement. By leveraging the unique user bases of different channels, you can customize your messages to suit each platform's audience, improving overall interaction and loyalty," explains Julie Thompson, Senior Writer and Expert on Business Operation

How to gauge the effectiveness of your SMS marketing initiatives 

To fully grasp the impact of SMS marketing initiatives and to maximize future endeavors, it is imperative to measure campaign success. 

SMS marketing's key performance indicators (KPIs) 

You must first specify your desired condition of success. You must monitor KPIs unique to your SMS messages to achieve it.

The following are the primary KPIs to pay attention to:

The number of communications that reach their intended recipients is known as the delivery rate. A low rate suggests you need to purge your list of outdated phone numbers, whilst a high percentage suggests your contact list is in good health.

Open rate: this statistic is useful for assessing rapid engagement because SMS open rates are often high. Keep in mind that 98% of marketing messages are opened, therefore your targets for SMS open rates should be significantly higher than those for email open rates. 

The percentage of recipients that click on a link in your SMS is known as the click-through rate. It's essential to determine how successful your call to action is. You should take action if your open rate is 98% but your click-through rate is below 2%. Try to reach about 30%.

Unsubscribe rate: this measures the number of recipients of your SMS who choose to unsubscribe, providing insight into the effectiveness and relevancy of your message.

Monitoring the ROI of SMS marketing 

Specialized SMS marketing platforms and integrated marketing software with SMS tracking features are two examples of tools for monitoring these KPIs. 

These tools will help you understand how your campaigns stack up against industry averages by not just measuring performance but also offering insights into SMS marketing benchmarks.

Some helpful tools and strategies are as follows:

SMS marketing platforms: A lot of these platforms come with integrated analytics tools made especially for monitoring the effectiveness of text message campaigns. These platforms offer real-time insights into message delivery, open rates, click-through rates, and conversion performance.

URL shorteners and tracking: By utilizing URL shorteners, such as Bit.ly, in your SMS messages, you may track click-through rates in addition to saving valuable characters. These services usually provide analytics on the number of times a link was clicked, the geographic locations from which it was clicked, and even the kind of device that was used. This information can be quite helpful in determining how well your call to action is received and how engaged people are.

Integration with web analytics tools (like Google Analytics) and Customer Relationship Management (CRM) systems: By linking your SMS marketing platform with these resources, you can gain a better knowledge of how SMS campaigns support your entire marketing goals. By setting up tracking for specific conversion goals, you can monitor the customer journey from text message to desired website action.

A/B testing: Use A/B testing to test alternative versions of your message to audiences or audience segments in order to maximize the efficacy of your SMS marketing. This can assist you in determining which message variations have the highest open rates, engagement levels, and conversion rates. A/B testing is supported by a lot of SMS marketing solutions, which offer data to help you decide on content and approach.

Examples of effective text message marketing techniques

Simple SMS marketing is possible; a couple of strategically placed texts can have a significant impact.

Follow the lead of retailers who have had success with SMS marketing to ensure that yours is too. 

Spreading the word about new products with SMS marketing: Pinjarra Bakery

The specialty of Pinjarra Bakery is unique, savory pies. Targeted SMS marketing allowed Pinjarra to immediately notify their most devoted customers about exclusive pies, whereas they had previously depended on word-of-mouth and email marketing to spread the message.

On paper, the plan was straightforward: send their most devoted customers a promotional SMS about new limited-edition pies around midday. This allowed these customers to sample limited-edition pies first, which offers two advantages:

Customers who have already been won over are considered loyal. They only need to know that there is an exclusive pie available at the appropriate time; they don't need much more persuasion to come in and taste one.

A pleased and loyal customer is more inclined to recommend a company. Loyal customers can spread the news through word-of-mouth marketing by encouraging them to try new pies first.

Over the course of three months, just two of these straightforward but successful SMS campaigns accounted for 15% of Pinjarra's total revenue. 

Hyper-specific targeting with SMS marketing

Marketing works best when it reaches consumers at the right stage of their customer journey. T.C. Elli's classified their customers into the following buckets using information from their POS system: 

• Customers at Risk
• Top Customers
• Assurances for Customers
• New Clients
• Loyalty Program Members

Different messaging is required for lost and at-risk customers compared to loyalty program members and major spenders, as each group falls into a somewhat different set of behaviors and preferences.