What is SMS marketing? Your guide to the fastest-growing ecommerce marketing channel

Profile photo of author Jax Connelly
Jax Connelly
12min read
SMS marketing
May 2, 2023
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“No one wants a text message from my brand.”

That’s the most common SMS marketing myth Ashley Ismailovski, director of email marketing at SmartSites, hears from clients.

“To that, I always say, ‘How will you know if you’ve never tried?’ Just because you don’t personally like to receive SMS marketing campaigns does not mean that your customers won’t,” Ismailovski points out. “More often than not, we find that consumers are more receptive and more engaged with SMS campaigns than over email.”

Just because you don’t personally like to receive SMS marketing campaigns does not mean that your customers won’t.
Ashley Ismailovski, director of email marketing, SmartSites

Ismailovski is right: Your customers and potential customers want you to text them. According to Klaviyo’s recent SMS consumer sentiment report, more than twice as many shoppers would rather hear from you via text message than over social media—and 96% are willing to receive a text from a brand at least once a week.

For years, marketers have relied on email due to its wide reach, massive return on investment (ROI), incredible speed, and stable costs—not to mention ownership of the relationship with customers, instead of relying on third-party channels or marketplaces.

Now, SMS or text message marketing is gaining similar traction among both large and small businesses that want to build genuine, long-term relationships with their customers: According to Klaviyo’s recent marketing mix report, 30.47% of all ecommerce brands and over half of businesses that make $20M+ in annual revenue are currently using SMS as a marketing channel.

Ecommerce brands that incorporate SMS marketing into their broader owned marketing strategy are driving more revenue by creating unparalleled customer experiences. But how can you make sure you’re getting the most out of this burgeoning channel?

Let’s start with the basics:

  1. What is SMS marketing?
  2. The 3 types of SMS marketing
  3. Is this new marketing channel effective? 5 benefits of SMS marketing
  4. SMS marketing FAQs

What is SMS marketing?

SMS marketing is, quite simply, the practice of sending customers and prospects marketing messages, promotions, announcements, reminders, and more via text message.

The term “SMS” stands for “short message service,” and brands use this form of opt-in marketing communication to interact with their customers on a more personal level. “Opt-in marketing communication” means you can only send SMS messages to people who have explicitly consented to receive them.

Besides SMS messages, you can also send MMS messages—text messages that contain pictures, GIFs, or other animated images.

And remember, like email marketing, SMS is an owned channel. This means you have complete control over who receives an SMS marketing message, what content you share, and when you decide to send it.

The 3 types of SMS marketing

When you implement SMS messaging as part of your marketing strategy, there are 3 types of communications you might send to your audience:

1. Promotional SMS marketing

Promotional SMS marketing includes messages or texts you send to increase sales, promote a product, or build brand awareness.

Promotional texts might be one-off SMS campaigns or SMS marketing automations—SMS messages triggered by the actions someone takes on your website.

If a shopper has consented to receive text messages from your brand and adds an item to their cart, for example, you could send them an abandoned cart text to encourage them to complete their purchase.

Whether they’re campaigns or flows, you can use promotional SMS messages to:

  • Inform your customers about the launch of a new product.
  • Offer a special sale or promotion.
  • Share company announcements.
  • Promote branded events.
  • Provide tips on how to best use the products you’re selling.

2. Transactional SMS marketing

Transactional SMS is any text message you send to a customer to inform them about the status of their order. Several types of SMS are considered transactional, including:

  • Order confirmations
  • Shipping updates
  • Shipping delay notifications
  • Delivery confirmations

Unlike promotional SMS, which is typically focused on making a sale, transactional SMS is a form of customer service that aims to keep customers informed about a purchase.

Transactional texts are pretty simple, and unlike with emails, you don’t have a lot of creative liberty in terms of content or design. But Klaviyo’s recent consumer sentiment survey found that out of all the SMS messages they could receive from brands, consumers want transactional text messages the most:

  • 64% want delivery confirmations from brands.
  • 60% want shipping confirmation messages from brands.
  • 50% want order confirmation messages from brands.

One thing to note:The Telephone Consumer Protection Act (TCPA) requires explicit consent for transactional SMS. When someone opts in for transactional SMS, that does not mean they’ve opted in for promotional text messages as well.

On the other hand, if you have promotional SMS consent, you can send a transactional text, too—but any unsubscribe is a blanket SMS unsubscribe from your brand.

3. Conversational SMS marketing

Whereas two-way SMS involves responding to specific words as prompts, conversational SMS uses natural language processing to carry on digital conversations with more nuance.

True conversational SMS systems use a combination of this automated text technology and human customer service agents who can fill in the blanks when conversations are beyond the algorithm’s abilities.

A main use case for conversational SMS is customer service enhancement, which leads to higher retention, higher average order value, and even higher customer lifetime value (CLTV).

Is this new marketing channel effective? 5 benefits of SMS marketing

At this point, you might have a few questions. Why should you consider using SMS marketing? How can you tell if there’s an opportunity on this channel with your target audience? And is it actually worth the effort to add text message marketing if you’re already seeing incredible results from email alone?

Here are 5 key reasons why ecommerce businesses should invest in SMS marketing—and why it might be right for yours, too.

1. SMS marketing drives higher customer engagement rates

It’s now common knowledge that the massive open rates often cited in SMS marketing are a misleading vanity metric.

But depending on the content you share, text messages can outperform email on both click-through rates and conversion rates. According to this SMS marketing industry benchmarks report, SMS campaigns drive, on average, over 5.6x higher click rates and 1.4x higher conversion rates than email campaigns.

“Consumers are smart—they’ll opt in to the channels that make sense for them,” says Suze Dowling, co-founder and chief business officer at Pattern Brands. “SMS as a channel is very in the moment, so brands can expect a more dedicated consumer. We see SMS campaign click rates that are 6-8x higher than email.”

That’s not to say email marketing is dead. Far from it, according to our marketing mix report. But “email is crowded and it’s becoming increasingly more crowded,” says Blair Peterson, VP of strategy at ethical jewelry brand Dana Rebecca Designs. “Especially for the people who are really engaged with your brand, SMS is a way to speak to them more directly.”

“You need to consistently be finding new ways to talk to your customers that keep them engaged, and SMS is one of them,” Peterson adds. “It’s a miss not to try it.”

You need to consistently be finding new ways to talk to your customers that keep them engaged, and SMS is one of them. It’s a miss not to try it.
Blair Peterson, VP of strategy, Dana Rebecca Designs

2. SMS marketing allows you to reach customers instantly

Unlike emails, which may languish in the dreaded promotions tab for hours, days, or even weeks, texts tend to garner immediate attention.

“I don’t know about you, but I don’t receive email notifications on my phone. I do get text notifications,” points out Jacob Sappington, head of email at ecommerce growth marketing agency Homestead Studio. “SMS marketing gives you a faster way to interact with your customer.”

If you have a special offer you want your subscribers to take action on right away, notifying them via email means they may miss your message. But if you send them your time-sensitive message via text, they’re more likely to see it—and take the action you’d like them to take, right away.

“It’s diversification of channels. You cut through that inbox saturation, especially during heavy promotional periods like Black Friday, when everyone is sending 10x the emails they normally send,” says Elliot Scott, founder and CEO of London-based retention agency ElliotDigital. “SMS cuts through all the noise straightaway.”

“It’s very immediate, so for the right messaging types, it’s extremely effective,” Sappington agrees. “SMS is fantastic for product launches, it’s fantastic for flash sales—it’s fantastic for sales, period.”

3. SMS marketing creates more personal customer relationships

Texting is how people communicate with their friends and loved ones, which means their mobile device is often only an arm’s length away.

It also means, compared to their email address, people tend to be pickier about who they share their phone number with. Klaviyo’s consumer sentiment report found that 95% of consumers subscribe to less than 7 brands via SMS—and over half subscribe to only 2-3 brands.

In other words, if you have someone’s phone number, they really want to hear from you—and they’re more likely to be a loyal customer or brand advocate than a one-time or occasional buyer.

As Scott points out, “I don’t email my friends—we text. I don’t think I email anyone outside of work. So that ability to chat to someone through a phone, within boundaries—you can spark up some really good conversations with people who are more likely to remember you.”

4. SMS marketing complements—and enhances—your email marketing strategy

Because consumers are more selective about who they’ll share their phone number with, your SMS audience tends to be smaller than your email list—which is why mobile marketing strategies tend to work best when paired with a strong email marketing strategy.

“We never advocate for clients using just one or the other,” Sappington says. “Whenever they leverage both email and SMS, it always works better together.”

This kind of omnichannel marketing approach is crucial for reaching today’s consumer where they are, Sappington explains: “People are busy. They’re very distracted in their day to day. As many touchpoints as we can get with them, as many ways as we can plant seeds and plant reminders, that’s the goal.”

“If a brand hasn’t already adopted a multi-channel approach, I would highly recommend they start to leverage both email and SMS via Klaviyo,” agrees Sam Alder, lead CRM strategist at Ragnarok. “This would ensure the most relevant messages are being delivered to the consumer at the most opportune moment. Accelerating ROI cannot be done by one channel alone.”

Accelerating ROI cannot be done by one channel alone.
Sam Alder, lead CRM strategist, Ragnarok

By combining SMS with your email marketing program, you can elevate your messaging to create unique customer experiences your subscribers won’t be able to find on other channels—or with other brands.

“More brands should look at ways to improve cross-pollination between their different channels,” says Wei Tan, co-founder of The Orchard Agency. “Not all your fans are following you on your social channels, or subscribing to your email or SMS contact lists. Improve message visibility by reaching out to your customers across all your various marketing touchpoints.”

5. You own your SMS marketing efforts

Another benefit of text message marketing is that you own the relationship with subscribers.

In other words: no data privacy issues.

In the aftermath of iOS 14.5, the world is moving toward enhanced customer privacy by blocking third-party tracking. Fortunately, this doesn’t affect SMS and email marketing, because neither channel relies on third-party data to reach customers with personalized communications.

When you collect a phone number or email address, you own that information. You can communicate with your subscribers at any time, and there are no algorithms that decide when or how they’ll see your message.

Plus, you know they want to be there. As Sappington puts it, your SMS and email lists are “a self-selected audience of people who’ve said they’re willing to hear from you on multiple channels.”

Use SMS and email to reach the right customer, at the right time—without relying on third parties that dilute your message and prevent you from creating an exceptional customer experience.

Want to go beyond the basics? We cover everything you need to know to make sure you start from a place of value and end with loyal, lifelong customer relationships in this ecommerce SMS marketing series. Check out:

SMS marketing FAQs

Does SMS marketing really work?

Yes, SMS marketing really works. Klaviyo’s recent SMS consumer sentiment survey found that 73% of consumers have made a purchase based on receiving a text message from a brand—and over half of them have done so 2-3x.

And according to Klaviyo’s latest SMS marketing industry benchmarks, the average text message earns an 8.5% click rate, a .14% conversion rate, and $0.14 in revenue per recipient.

What are the types of SMS marketing?

There are 3 main types of SMS marketing:

  1. Promotional SMS marketing: alerts customers to deals and sales, and works to build brand loyalty
  2. Transactional SMS marketing: keeps customers informed about their orders with messages like order confirmations, shipping confirmations, and delivery confirmations
  3. Two-way SMS marketing: typically used for support services in which customers and a support agent can have an active SMS conversation, as with Klaviyo’s Zendesk integration

How do I run SMS marketing?

Many brands get started with SMS marketing by turning on transactional SMS marketing. Consumers prefer transactional SMS messages from brands the most because these texts contain important order information.

But brands also often begin an SMS marketing program by building their SMS subscriber lists through tactics such as:

  • Messaging their existing email list and encouraging them to sign up for VIP deals via SMS
  • Launching a pop-up on their website offering a discount for first-time buyers who sign up for SMS

Keep in mind a strong SMS marketing strategy doesn’t exist in a silo, but rather integrates with email marketing.

Is SMS marketing free?

SMS marketing is not free because sending text messages is not free. In the same way you must pay for a mobile phone plan with a carrier like Verizon that allows you to send text messages, most SMS marketing platforms require brands to purchase a number of credits to send text messages to consumers.

Brands using Klaviyo SMS, for example, receive a set number of SMS credits per month. You can use your credits toward any combination of SMS and MMS messages (a text message over 160 characters or containing an image or GIF).

Ready to get started with SMS marketing?
Try Klaviyo today
Jax Connelly
Jax Connelly
Lead editor
Jax Connelly (they/she), lead editor at Klaviyo, started their career doing SEO at a small digital ad agency and spent most of their twenties managing a financial magazine for a trade association based in Washington, DC. Most recently, she studied and taught writing at Columbia College Chicago during the peak years of the pandemic. Outside of their day job, Jax is an award-winning creative writer who has received honors including 3 Notables in the Best American Essays series, contest awards from publications like Nowhere Magazine and Prairie Schooner, and a residency from the Ragdale Foundation. Jax lives in Chicago a block away from Lake Michigan with her elderly Jack Russell Terrier, Cloo.