What Is the ROI of Text Marketing? 3 Examples of Successful Campaigns
You’ve probably heard of text marketing. You’ve probably even heard a few of the reasons why you should try text marketing.
- People are almost always with or near their phones (91% of adults keep their smartphones within arm’s reach as reported by Forbes).
- Text messages have an incredibly high engagement rate (90% of text messages get read within three minutes of delivery also reported by Forbes).
- Text messages produce rich user data and immediate results. You can read all about those benefits in our post: You're Using Email Marketing -- But Why Not Text Marketing?
But if you are like many marketers, you may still be overlooking text marketing as a powerful way to reach and stay in touch with customers -- and you might be missing out.
Text marketing can produce meaningful results.
Let’s look at how you can calculate the ROI of text marketing and review a few examples of how our text marketing campaigns have produced positive results for our customers.
What’s the ROI of Text Marketing?
The ROI of text marketing will vary by campaign, but we can look at the averages of past campaigns to determine an average return. The average ROI of our text marketing campaigns is about a 500% return. Customers can expect to produce about five times their investment when running a strategic text marketing campaign tied to an offer or deal.
How to Calculate the ROI of Text Marketing
To calculate the ROI of text marketing, you need to know your investment and return.
- Your Investment: How much does it cost to run a campaign?
- Your Return: How much revenue did the campaign produce?
When you know how much you invested and how much revenue you generated, you can easily determine the ROI of text marketing by calculating:
Return - Investment = Text Marketing ROI
From here, you can figure out the ROI percentage of your text marketing campaign.
(Text Marketing ROI / Investment) X 100 = Text Marketing ROI Percentage
The way that you determine your return will vary depending on how you run your text marketing campaign. We suggest trying a unique offer or deal to your text marketing campaign so you can easily calculate the ROI. For example, if the offer includes a deal for dinner for two for $30, you can count how many people redeemed the offer in the restaurant. This allows you to see the amount of revenue generated from the campaign.
Investments in text marketing may vary as well. Each vendor has different rates, but the average cost to send a marketing text message is between $0.01 and $0.05 per text.
There may also be costs associated with managing and setting up your database. For example, you may need to spend resources on collecting customer contact information and adding users to your database. You may need to spend money on digital advertising to get people to opt-in to your text marketing campaign. Once you have an existing list, you will be able to produce a higher ROI since your investment will be smaller.
Consider all of your costs when calculating your investment to get a full look at text marketing ROI.
3 Examples of Text Marketing Campaigns
Now, let's look closer at the exact ROI we've produced through text marketing for clients at MyArea Network. You can see that you don’t need a large investment to produce real results for a local business.
Text Marketing ROI Percentage - 525%
Our client was a high-end restaurant that didn’t have a large existing text marketing list, so their campaign started with a contest. We created a landing page that asked audiences to enter their phone number to be entered to win a dinner for two. Each person who entered also received a coupon to use at the restaurant. The landing page was promoted to targeted audiences on Facebook.
The one-time campaign built the restaurant’s contact database while also driving in-store visits. It drove 6,989 impressions, 335 clicks, and 297 entries. Ten coupons were redeemed at the restaurant where the average check is $100, producing a strong ROI for a small $160 investment.
- Investment: $160
- Return: $1,000
- ROI: $840
Text Marketing ROI Percentage - 600%
Another high-end restaurant saw a similar ROI in their text marketing campaign. The investment was a bit larger than the last example, and the campaign ran for three months, not one.
For the client, we also created a landing page and contest. The goal was to build the database while also driving customers into the restaurant for a dinner-for-two special. The landing page received 72,291 impressions through Facebook ads. There were 2,235 clicks and 1,405 entries.
If we estimate that only 5% of people who received coupons visited the restaurant and had an average check of $60, the ROI of this text marketing campaign is 6X the investment.
- Investment: $600
- Return: $4,200
- ROI: $3,600
Text Marketing ROI Percentage - 350%
Let’s look at one final example of a similar text marketing campaign for a restaurant. While the other clients were high-end restaurants, this example is a mid-level restaurant where average checks are about $20.
The campaign was structured similarly to the other two examples and ran for three months. The contest landing page had 255,472 impressions, 1,775 clicks, and 867 entries. We were also able to track the number of redeemed coupons which was 274 uses.
Because the restaurant’s average check size is smaller than the other examples, their return is lower than the more high-end restaurants. But the return is still strong, producing an ROI of $4,280 plus 867 new subscribers to their list that they can continue to market to.
- Investment: $1,200
- Return: $5,480
- ROI: $4,280
Learn More About Text Marketing
Text marketing is a powerful way to reach customers where they are. It is a direct connection to audiences who have already previously engaged with your brand, which means they are more likely to convert and do business with you.
To learn more about bringing text marketing to your business, check out our industry guides.
Or request your free consultation with the MyArea Network team to see how we can create a text marketing campaign for your business that produces high-return results that you see here.