Short messaging service (SMS) analytics are fundamental to modern marketing campaigns since consumers typically prefer mobile over other channels. How can entrepreneurs strategically use this tool to grow their startups?

What is SMS analytics?

SMS analytics uses various tools to track text messaging campaigns, revealing data-driven patterns in customer behavior. It shows companies how their mobile marketing performs by tracking quantifiable measurements in near real-time. This way, they see how many people receive and interact with messages.

Startups can add unique identifiers or trackers to text messages to record relevant data. They can also receive information from telecommunication providers. Alternatively, they can opt for an out-of-the-box solution from a third-party SMS analytics servicer, a customer relationship management (CRM) system or a marketing automation tool.

SMS analytics is a popular marketing medium. According to a 2020 study, just over six in 10 organizations use it as a market research method. While entrepreneurs may not have the subscriber base of larger enterprises, they should consider adopting this widely-used tool early on to accelerate their growth.

Key SMS metrics startups should track

While an analytics dashboard provides a range of metrics, some are more important than others. Knowing which to pay attention to can help startups optimize their text campaign. That said, their benchmark might initially be lower than average when they start.

If entrepreneurs don’t have a dashboard, they can manually calculate a metric by dividing it by the number of messages sent and multiplying that figure by 100. For example, if they send 120 messages and 80 subscribers perform a specific action, they’d get 66.7 percent.

Delivery rate

The delivery rate is the measure of messages reaching subscribers. It won’t hit 100 percent even with a reputable servicer because people often deactivate their numbers or block incoming messages. A low percentage means entrepreneurs are paying for texts they don’t use.

Response rate

The response rate is the number of subscribers who reply. A high percentage signals content is engaging and responding is worthwhile, while a low one indicates people are uninterested in the offer or call to action (CTA).

Opt-out rate

Sometimes, people no longer want to receive marketing messages. The opt-out rate is the measure of people who unsubscribe. If it’s high, the content is probably annoying or spammy. A low percentage signals it’s trustworthy, valuable, and welcome.

Open rate

The open rate is the amount of subscribers who view the message. Intriguing content will drive it up. Considering seven in 10 Americans check their phones within five minutes of receiving a notification, this metric should be relatively high. However, people won’t click if the content looks unengaging or if they’ve heard about it elsewhere.

Interaction rate

Many SMS messages contain a CTA, inviting subscribers to click a link, open an app or share the content. The interaction rate is the measure of those who follow through. A high percentage signals the prompt seems trustworthy and is worth interacting with.

How can SMS analytics benefit startups?

SMS analytics is particularly beneficial for startups because it helps them understand subscribers’ interests, enabling them to cultivate a loyal customer base. People are more likely to engage when content is tailored to their preferences.

Having an accurate, comprehensive overview at such a critical stage can give entrepreneurs a competitive advantage. With SMS analytics, they can see how text-based promotions and sales perform in near real-time, enabling immediate intervention. Those without this ability can only guess how their customers react to marketing messages.

Higher engagement is another benefit. As of 2023, 60.5 percent of business owners in the United States agree SMS marketing offers higher interaction rates than other channels. Moreover, 53.5% say it provides better open and click-through rates.

How to implement SMS analytics

Implementing SMS analytics is a multi-step process requiring a solid text-based marketing campaign and some kind of tracking tool. Founders and co-founders should follow each step to ensure they maximize their investment.

Select analytics software

Whether leaders choose CRM or marketing automation software, they need a platform to track SMS analytics. They should consider cost, the potential for integration with other technologies and usability before deciding. If possible, they should also get multiple quotes.

Double-check compliance

The Federal Communications Commission (FCC) and the Cellular Telephone Industries Association (CTIA) have SMS-related regulations. For example, the option to opt-out must be clear in the first message and available anytime. Upon unsubscribing, brands must send a final confirmation text.

Founders and co-founders should ensure their practices regarding recurring texts, contact information, opt-in, and opt-out align with the FCC’s and CTIA’s regulations. If they use a third-party vendor, they should conduct a compliance audit. This way, they avoid costly fines and protect their startup’s reputation.

Build a subscriber list

Founders should build a subscriber list if they haven’t already — SMS analytics is less valuable if it’s only tracking a handful of individuals. They can ask customers to opt-in to marketing messages during purchase confirmation, on their landing page or in an email newsletter.

Continuously track metrics

Text data is only valuable if founders use it to adjust their marketing campaigns. Having up-to-date metrics is key because they evolve as more people subscribe or opt out. Factors like seasonal changes and sales can also be impactful.

Implementation considerations for entrepreneurs

Startups can elevate their text marketing campaign if they keep some key tips in mind, the first being optimal delivery times. Morning texts might be a good strategy because 75 percent of people say they check their phone within 30 minutes of waking. However, it’s more complex than that — decision-makers should also consider geography, weekdays, seasons, and holidays.

Incentives are another consideration. Entrepreneurs who don’t have an extensive text messaging list should consider offering 10 percent off codes, limited-time deals, or free promotional merchandise exclusively to their subscribers to drive subscriptions.

The last significant consideration involves double-dipping, meaning startups shouldn’t send similar content through text and email. While the user base may differ, overlap is likely extensive. The content could push people toward the opt-out option if it doesn’t provide a unique experience on both mediums.

Entrepreneurs should give their text and email subscribers separate, valuable content. One way to accomplish this is to make them feel in the know or special by providing promotions, early access codes, or a first glimpse at new products just for them. In addition to lowering churn, this approach can drive up subscriptions.

Startups should continue adjusting to metrics

SMS analytics isn’t a one-and-done process — it’s an ongoing journey of minor adjustments. Entrepreneurs should continuously tweak their offerings, timing, demographic segmentation, and message content based on metrics to optimize their marketing campaign and achieve maximum growth early on.

Zac Amos is the Features Editor at ReHack, where he covers business tech, HR, and cybersecurity. He is also a regular contributor at AllBusiness, TalentCulture, and VentureBeat. For more of his work, follow him on Twitter or LinkedIn.

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