If you've spent any time in SMS marketing, you've probably heard about an elusive "98% open rate." Let me be clear: It doesn't exist. Anyone throwing that number around is likely trying to sell you something. In SMS, the reality is different, with other metrics offering deeper insights into campaign performance. Full disclosure, I work for ReadySMS, and today I'll guide you through the metrics that matter and those that don’t.
Why "Open Rate" Doesn't Exist in SMS
Let's put this myth to rest right away. Unlike email, SMS doesn't typically have metrics like open rates because tracking "opens" requires tracking the interaction. A text message is considered delivered when it reaches the recipient's phone, period.
What this means for you: Don't be swayed by claims of 98% or even 90% open rates. Focus on measurable variables like delivery rates and click-through rates that truly reflect engagement.
The Metrics That Matter
Here's a deep dive into the metrics worth your attention if you're committed to making the most out of your SMS campaigns.
Delivery Rate
Your text could have the wittiest line, but it's useless if it never reaches your customer. Delivery rate measures the percentage of successfully delivered messages over the total sent. Given the robust network protocols supporting SMS, delivery rates often hover around 95-98%.
- Calculation:
(Delivered Messages / Total Sent Messages) * 100 - Benchmark: Aim for above 95%. If you're below this, your list may have bad numbers or you might have carrier issues.
Click-Through Rate (CTR)
CTR is a tangible indication of engagement. It measures the percentage of recipients who clicked a link in your SMS message.
- Calculation:
(Number of Clicks / Successfully Delivered Messages) * 100 - Benchmark: CTR can vary widely, but a 15-25% rate is typical for effective campaigns, depending on your offer and audience.
Opt-out Rate
This measures how many recipients hit the "STOP" button on your messages. It's crucial for checking if your content is as engaging as you think.
- Calculation:
(Number of Opt-Out Requests / Successfully Delivered Messages) * 100 - Benchmark: An opt-out rate of less than 1% is generally considered healthy.
Revenue Per Recipient
This metric is gold for understanding the direct financial payoff from your SMS campaigns. It calculates the revenue generated per individual contact.
- Calculation:
Total Revenue / Number of Recipients - Benchmark: This will vary by industry and campaign type but should be a significant factor in ROI dilemmas.
Cost Per Conversion
A straightforward look at efficiency, this metric measures how much you're spending to get someone from your SMS list to convert.
- Calculation:
Total Campaign Cost / Number of Conversions - Benchmark: There's no "one size fits all" here. Depending on your margin and campaign type, the numbers will vary, but the aim is generally less than your profit margin.
List Growth Rate
SMS marketing relies heavily on the health of your list. Tracking list growth rate allows you to see if your audience is expanding, stagnant, or shrinking.
- Calculation:
((New Subscribers - Unsubscribers) / Total Subscribers at the Start) * 100 - Benchmark: This varies by campaign and market but aims for a steady, upward trajectory, at least 5% per month.
Benchmarks by Industry
Different industries see different benchmarks for these metrics, and it's crucial to anchor your expectations in real-world data. Here's a snapshot:
| Industry | Average CTR | Average Opt-out Rate | List Growth Rate |
|---|---|---|---|
| Retail | 20% | 0.8% | 6% |
| Healthcare | 25% | 0.5% | 4% |
| Restaurants | 18% | 0.6% | 7% |
| Nonprofits | 22% | 0.3% | 6% |
| SaaS | 15% | 1% | 5% |
Metrics That Lie (or Mislead)
Fake "Open Rates" and Vanity Metrics
As mentioned, any "open rate" claims in SMS should raise suspicion. Other vanity metrics to watch out for include sheer message count without quality context or engagement forewarnings. Always tie metrics back to actions or revenue to validate their relevance.
Sole Focus on Low-Cost Campaigns
Cheap messages aren't always better if they're not driving conversions. Dig into cost per conversion over any unsubstantial cost-per-message lens. ReadySMS's tiers (starting at $0.0074 per segment) are meant for sustainable campaign returns, not rock-bottom bait.
Practical Takeaway
Forget about hollow claims like "open rates". Instead, focus on metrics that tangibly impact your bottom line: delivery rates, CTR, opt-out rates, and cost per conversion. This pragmatic approach leads to more effective and sustainable campaigns.
If you're ready to dive in and see how real metrics can transform your SMS campaigns, learn more about ReadySMS here. Why stay in the dark when transparent, actionable data is within reach?