What Is SMS Marketing?

SMS marketing has enormous potential for local businesses that want to reach, communicate, and engage with their customers in relevant, cost-effective ways that align with today’s lifestyles. For many people, that’s a text message. But what is SMS marketing?

Since around 85% of people now own a smartphone, getting in front of them with a text message is a great way to grab their attention in real-time and inspire them to take action — whether it’s booking an appointment, making a purchase, leaving a review, or something else. 

While SMS marketing is nothing new, it’s grown significantly in the past few years. According to Grand View Research, the SMS marketing industry will be worth 12.6 billion by 2025. And it’s growing at a compound annual growth rate (CAGR) of 20.3%. 

As a business owner or marketer, this means if you’re not already adopting SMS marketing, you may be falling behind in terms of your marketing efforts. In fact, Gartner predicts that by 2025, 80% of service-oriented organizations will use SMS and other messaging channels as the preferred means of communication, making SMS useful for more than just marketing and promotions. 

The good news is that many SMS marketing platforms for small businesses are easy to implement and use, allowing you to get started relatively quickly and reap the rewards.

Learn more about SMS marketing and what it can do for your local business. 

Definition of SMS marketing

What is SMS marketing? Let’s start with SMS. SMS stands for “short message service,” otherwise known as texting. SMS marketing, a.k.a. text message marketing, enables you to quickly and effectively engage with your customers via a text message. You can use texting to share promotions, event announcements, discount codes, customer service updates, appointment confirmations and reminders, surveys, and much more.

With SMS marketing, you control the means of communication and the message, which makes it ideal for authentic, personalized, real-time interaction between your business and your customers. 

How SMS marketing works

SMS marketing is generally considered a quicker, easier way to reach your customers than traditional marketing channels, and it has a better engagement rate than email. Text open rates are as high as 98%, whereas email open rates are only around 20%. 

To get started with SMS marketing, you first need to build a list of subscribers. You can do this in a number of ways:

  • Collect phone numbers on your website
  • Invite your social media followers to sign up
  • Ask for phone numbers in addition to email when building a contact list
  • Advertise a QR code on your store signage that customers can scan to subscribe
  • Provide a number code that customers can text to subscribe
  • Offer discounts or special offers like free shipping to customers who sign up

It’s important that you only text customers who have provided double opt-in. In other words when you ask for phone numbers or when customers sign up in some other way, you need to disclose what they’re signing up for, then text them once they sign up to get explicit written consent. 

Each text you send also needs to include an opt-out, or unsubscribe, option to comply with the Telephone Consumer Protection Act (TCPA), which governs and regulates texting. This allows your customers who are no longer interested in getting your texts to opt-out immediately. If you’re unfamiliar with SMS marketing compliance, be sure to review the guide below.

SMS Compliance Guide

Learn how to properly get opt-in from your customers

Once you have a list of subscribers, you can start sending a variety of text communications. It’s a good idea not to bombard your customers with too many texts, as this can annoy them and they may unsubscribe. But for the most part, once a customer has opted in, they expect to see texts from your business, as long as they are relevant. 

Benefits of SMS marketing

There are many benefits of SMS marketing, especially for local businesses that want to grow a loyal customer base and stay competitive. With SMS marketing, you can:

  • Reach more people: The widespread use of smartphones and the popularity of texting makes SMS marketing one of the best channels you can use if you want to reach more of your audience.
  • Increase customer engagement: Because texts are so immediate — a customer sees it quickly and can respond right away — your message doesn’t get lost or ignored for hours or days, as it might in an email inbox. The response rates of texts are also higher than email — about 45% for texts vs. 6% for email. 
  • Optimize the customer experience: Texting customers with valuable, relevant, personalized content shows them that your business understands their needs, behaviors, and preferences — all which help deliver a better customer experience overall. 
  • Improve customer loyalty: Local businesses excel when they’re able to develop great relationships with their customers. The personal, authentic nature of texting helps you establish more trusting and emotional connections with your customers that improve and deepen customer loyalty.
  • Get started easily: Many texting platforms are quick and easy to fire up, minimizing the time you have to spend learning a new tool. Also, you don’t need a graphic designer or to spend tons of time writing content to send out a simple yet effective text. 
  • Get a great ROI: With a relatively low cost to get started and the wider reach and better engagement that comes with texting, you get more for your investment than you do with other marketing and advertising methods and tools.

What is an SMS campaign?

An SMS campaign is similar to any other marketing campaign: You define the audience, come up with a goal, decide on timing, create a message or promotion, and determine how you will measure the campaign’s success. With SMS, you share the message or promotion as a single text or a series of texts, depending on your objectives.

When you run an SMS campaign, it’s important to adhere to the character limits of texting. A single text message should be no more than 160 characters. If your message is more than that, it will be broken up and sent as multiple messages, which can be disjointed and annoying for your customers on the receiving end. It’s better to stick to a short, to-the-point message, but if that isn’t doable, you might consider sending it as an email instead.

It’s also important to always include a clear call to action (CTA) — meaning, what do you want the customer to do when they read the message? Provide a link or instructions so they can easily take the next step, such as “fill out a short survey here” or “buy it online here.” 

SMS marketing campaigns are especially effective when you use audience targeting and personalization. You can segment your customers into different groups, then create and send texts that are specific to those audiences and will have special appeal for them.

For example: 

  • Send new SMS subscribers a special thank-you gift or offer for signing up. This kicks off engagement with them right away and can inspire them to become bigger fans of your brand or business.
  • Alert customers who have recently purchased a specific product about an upcoming promotion or sale on the product. By personalizing the communication based on past purchase history, you can boost revenue and strengthen the customer relationship.
  • Ask any customer who made a purchase in the last 48 hours to leave a review and offer a free gift for doing so. The net result is that you can get more customer reviews, which helps maintain a positive online presence and increase conversions.
  • Invite your long-term customers to be beta users of a new product or service in exchange for a discount or extra points in a loyalty program. Customers like to feel special, and this is an excellent way to include them in your business and ensure they remain customers for life.    

Get Started with SMS Marketing

A comprehensive guide on how to start and scale your SMS marketing services

Why is SMS marketing growing?

SMS marketing is having an economic and cultural moment. There are many reasons for the strong growth of SMS marketing:

For one, texting used to be expensive back when phone plans charged per text. Today, many plans offer unlimited texting, which has allowed the public to make full use of it — extending it beyond just a way to chat with friends and family.

SMS marketing was already on the rise, but the COVID pandemic that began in 2020 only accelerated it. More consumers started using their smartphones and mobile devices to shop while they were staying at home. Temporarily unable to maintain contact with customers face to face, businesses had to get creative about how to stay engaged with them — which made texting a natural solution. 

Now, many consumers are comfortable shopping and interacting with brands and businesses on their phones. Different studies have found that around half — if not most — of consumers prefer getting texts from businesses over other channels. And the convenience factor is a big plus as well. Customers see a text from a favorite brand or business and can take immediate action. Everything can be done right there in real time on one device, with very little effort.

Texting also reflects the shorter attention spans of many consumers. Fewer people are willing to take the extra time to open up and read marketing emails, or they avoid emails altogether because they don’t want to deal with spam. Texting gets around the attention challenges of other marketing channels with its immediacy, brevity, and relevance.

In short, SMS marketing occupies the sweet spot between changing consumer behaviors and expectations and technology advancements that make texting easier and more convenient for everyone.

Which industries does SMS marketing work best for?

SMS marketing works well for a variety of industries. Local businesses in the following industries can see particular success with it:

  • Home services: Businesses that provide home services like plumbing, roofing, electrical, cleaning, and others can use SMS to engage with customers about quotes and estimates, appointment reminders, customer support responses, seasonal promotions, and discounted services. SMS helps home services businesses stay competitive and earn customer loyalty by being visible, responsive, and helpful to customers.
  • Healthcare: Healthcare businesses can use HIPAA-compliant SMS to engage with patients efficiently about appointment confirmations and reminders, notifications of lab results, patient surveys, and patient education. SMS helps healthcare businesses create a human connection with patients that’s quicker and more personal than other forms of healthcare communication.
  • Retail/restaurants: Retail and restaurants can use SMS to engage with customers about order completion and abandoned carts, order status updates, product or menu updates, reservation confirmations and reminders, deals and discounts at peak shopping or dining times, and feedback requests. SMS helps retail and restaurants stay top of mind with new and repeat customers so businesses can avoid revenue loss and better understand how to improve the customer experience.
  • Real estate: Realtors can use SMS to engage with buyers and sellers about property information, new listings, price updates, showings, open house schedules, and follow-up messages. SMS helps realtors gauge interest from and stay in communication with buyers and sellers quickly and easily in an industry in which trustworthy relationships are key and offers, negotiations, and sales happen fast. 

As you can see, there are countless ways to use SMS marketing to your advantage. If you’re just starting out and learning about what SMS marketing is, we’re here to help! Check out all of our resources on the topic below:

Consider GatherUp for your SMS Marketing Platform

GatherUp extends the impact of SMS marketing by combining your SMS marketing strategy with your reputation management. With GatherUp, you can gather and listen to customer feedback, then engage with them through strategic SMS campaigns. You can send targeted text campaigns, track performance, and glean valuable insights to drive better customer experiences. Using GatherUp for your SMS marketing needs allows you to: 

  • Easily obtain written explicit consent to build and maintain a compliant SMS subscriber list 
  • Create segmented lists of customers for more personalized communications
  • Test and schedule messages to improve engagement rates 
  • Use customer feedback and insights to inform your SMS campaign strategy 
  • Incorporate Net Promoter Score data to identify and win back your detractors, thank your promoters, and influence your neutrals 

To learn how GatherUp can support an SMS marketing strategy for your local business or agency clients, contact us today.



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