Maximizing ROI: How to Predict the Success of Your SMS Campaigns

April 4, 2024 | By Sam Pelton
Maximizing ROI: How to Predict the Success of Your SMS Campaigns


If conversion rates for your SMS campaigns are difficult for your business to predict, or if conversions aren't your primary goal, 2 other areas you can consider in regards to evaluating potential ROI are click rates and message engagement data.


It’s something every business is concerned about.

Something every team considers. Something every business leader pays attention to.

That something is ROI.

And the same is true when it comes to SMS campaigns. You want to know—what’s the return going to be?

So let’s go over some ways you might be able to evaluate your campaign’s anticipated and actual ROI, so that you can make sure you’re getting the most bang for your buck.

First, we’ll set the stage…

A Tale of Tommy and Lisa: The Need for Accurate ROI Prediction

Let’s say there’s a consumer—we’ll call him Tommy.

Tommy is a subscriber to his favorite book brand’s text alert system.

Tommy often clicks on the links in the book brand's text messages to see what’s new, and he frequently makes purchases.

On the other hand, we have Lisa.

Lisa only signed up for the book brand’s text alert system so that she could get free shipping per an offer they made, because she wanted to make a one-time large purchase.

Lisa rarely even opens the text messages, although she always sees when they come in.

Tommy and Lisa represent the range of types of audiences you may have for your text messages, and they help illustrate why having a way to predict ROI is important. Your text messages to Tommy will often be clicked and acted upon. Your text messages to Lisa will largely be ignored.

With such a potentially wide range of audiences, you'll want to have a way to predict if your SMS campaign will be actually and tangibly beneficial for your business.

Despite the unpredictability of people’s behavior, you could still observe trends over time and calculate averages to help you make somewhat accurate predictions about ROI.

The most direct metric in regards to determining ROI in general is, of course, conversion rates.

But what if conversion rates are difficult to predict in your situation? Or what if your campaign isn't looking for conversions but is looking more for engagement or brand awareness?

Click rates would be another metric to consider, as well as message engagement data. We'll explore both of these concepts here.

Assign a Dollar Value to Each Click

Although ROI goes beyond click rates, one of the most direct ways to predict possible ROI could be by assigning a dollar value to each expected click you’ll receive in your text messages.

In many cases, this wouldn't be too difficult, because you can estimate how much money you’ll make from people clicking on the links in your texts, and then you can use that to estimate how much each click is worth.

For example, if you find that usually around 10% of users that click your link end up purchasing, with an average lifetime value (LTV) of $500, then you can estimate that each click is worth approximately $50.

In that scenario, if you were planning on spending $1,000 on text blasts for a month and expect to get 100 clicks, you’ll receive approximately $5,000 worth of clicks. You therefore will have positive (estimated) ROI.

You would, of course, want to check that your actual ROI corresponded to that once the campaign was initiated. How many purchases did you actually end up receiving out of your text message campaign?

Compare your actual numbers to your predictions in order to determine if you need to make any changes to your approach or process.

Data to predict ROI for SMS campaigns infographic

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Message Engagement: Response Rates, Response Time, Sentiment Analysis

Unfortunately, ROI isn’t always quite as cut-and-dry as a customer directly clicking and purchasing, as you well know.

Another thing to consider is the value of brand engagement.

How much, if any, engagement are your text messages getting from customers and prospective customers? What is the quality of that engagement?

This could go beyond simply the number of people responding and could include concepts such as:

  • Response rates
  • Response time
  • Sentiment analysis

How many responses did you get compared to the total number of recipients? This is a simple and easy metric to find.

How long did it take for people to respond to you? This can be determined with the help of your SMS platform’s timestamps and an AI tool such as ChatGPT.

What is the content of the responses you’re receiving? You can use AI solutions to help you analyze this as well.

How can all of this data help?

Message Engagement Value: Examples

Here are some examples…

  • Let’s say you find that response rates are lower than expected, which helps you determine that your “reply” CTA was not strong enough. You therefore are more intentional about creating a CTA that better appeals to your audience in your next text blast.
  • Let’s say you find that people are taking a long time to respond to your message, which helps you determine that you’re not communicating enough urgency in your copy. You therefore create a stronger sense of urgency in your subsequent text blast.
  • Let’s say you find that a lot of people are responding with concerns about a specific aspect of your solution. You therefore create some help documentation to help ease people’s concerns and are able to get that in front of your prospects and customers.

You can determine whether or not these kinds of data points are valuable for your campaigns, and whether or not you can assign dollar values to these data points to help you calculate ROI.

After all, the conclusions you’re able to come to based on the data you find may end up bringing a big boost to your profit as it informs your decisions moving forward.

How Can You Maximize ROI for Your Own Business?

What’s the best way for your business specifically to measure and maximize ROI for your own SMS campaigns?

Think about how you can use SMS—and how you can use it better, especially if you’re getting lower than expected click rates and engagement:

  • Can you use stronger CTAs?
  • Can you create better offers?
  • Can you research your audience to find out better messaging that resonates with them?
  • Can you improve your opt-in process?
  • Can you clean out subscribers that aren’t truly interested?

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