SMS Marketing: The Channel Most Brands Are Using Wrong

SMS marketing is the practice of sending text messages to opted-in customers and prospects to drive sales, retention, or engagement. It is one of the most direct channels available to marketers, with open rates that dwarf email, and a format so constrained it forces clarity. Done well, it generates revenue fast. Done badly, it burns your list and your brand in equal measure.

This article covers how SMS marketing actually works, where it fits in a modern channel mix, and what separates the campaigns that generate a return from the ones that just generate unsubscribes.

SMS sits within a broader mobile marketing ecosystem that includes paid media, app-based engagement, and push notifications. If you want to understand how all of these channels connect, the Mobile Marketing Hub covers the full picture.

Why SMS Still Deserves a Serious Look

I have been in rooms where SMS gets dismissed as old technology. The conversation usually goes: we have push notifications, we have in-app messaging, we have email automation. Why bother with text?

The answer is reach and immediacy. SMS does not require an app. It does not require an internet connection at the moment of delivery. It does not sit in a folder that gets checked twice a week. It lands on a device that most people look at within minutes of receiving a notification.

That is not a trivial advantage. When I was at lastminute.com, we were constantly chasing immediacy. The entire business model depended on converting people who were close to a decision. The channels that worked best were the ones that reached people at the right moment, not the ones with the most impressive targeting parameters. SMS is the most direct expression of that principle.

The channel is also undervalued in B2B, though that is changing. Forrester has tracked the slow but steady shift toward mobile in B2B marketing, and SMS is increasingly appearing in appointment reminders, event logistics, and time-sensitive alerts for professional audiences. It is not the primary B2B channel, but writing it off entirely is a mistake.

How SMS Marketing Actually Works

The mechanics are straightforward. A business collects phone numbers from opted-in contacts, uses an SMS platform to compose and schedule messages, and sends them to segmented lists. Recipients receive the message in their native SMS app. They can reply, click a link, or ignore it.

Most SMS platforms sit between the brand and the mobile carriers. They handle delivery, compliance tools, opt-out management, and reporting. The major players include Klaviyo (which has built SMS tightly into its email automation), Attentive, Postscript, and Twilio for more technical implementations. Each has different pricing structures and different strengths depending on whether you are running e-commerce, SaaS, or service-based campaigns.

Message types broadly fall into two categories. Transactional messages are triggered by a customer action: order confirmations, shipping updates, appointment reminders, password resets. These are expected, welcome, and have the highest engagement rates of any SMS type. Promotional messages are broadcast or segmented sends: sale announcements, new product drops, loyalty rewards, limited-time offers. These require more care because they are interrupting rather than responding.

There is also a third category that sits between the two: behavioural triggers. Abandoned cart reminders, browse abandonment, re-engagement sequences. These are promotional in intent but transactional in feel because they are responding to something the customer did. They tend to perform well when the timing is right and the message is relevant.

The Compliance Layer You Cannot Skip

SMS compliance is where brands get into trouble, and the consequences are not theoretical. In the United States, the Telephone Consumer Protection Act sets strict rules around consent. In the UK, the Privacy and Electronic Communications Regulations govern the same territory. Both frameworks require explicit, documented opt-in before you can send marketing messages to a mobile number.

The common mistakes are predictable. Importing a list of email subscribers and assuming SMS consent carries over. Burying the opt-in in a terms and conditions page nobody reads. Failing to provide a clear opt-out mechanism in every message. Sending to numbers collected at an event or trade show without a specific SMS opt-in at the point of collection.

None of these are grey areas. They are compliance failures, and the fines that accompany them are significant enough to wipe out whatever revenue the campaign generated.

The practical standard is double opt-in or a very clear single opt-in with a confirmation message. The confirmation message serves two purposes: it documents consent, and it sets expectations about what the subscriber will receive and how often. Setting those expectations accurately at the start is one of the most effective things you can do to reduce unsubscribes later.

CrazyEgg’s overview of building an SMS marketing program covers the compliance groundwork in practical terms and is worth reading before you set up your first campaign.

Where SMS Fits in the Channel Mix

SMS is a conversion and retention channel. It is not a discovery channel. People do not find new brands through a text message the way they might through a search result or a social ad. They receive SMS messages from brands they already have a relationship with, or brands they have actively opted into.

That positioning matters for how you allocate budget and set expectations. If your primary problem is awareness, SMS will not solve it. If your primary problem is converting people who are already in your funnel, or retaining customers who are at risk of lapsing, SMS is genuinely effective.

The channel pairs well with email. Email handles longer-form communication, nurture sequences, and content. SMS handles time-sensitive nudges, confirmation, and recovery. Running them as complementary rather than competing channels is more effective than trying to make either one do everything.

It also pairs well with paid media. Google Mobile Ads can drive initial intent and capture leads, and SMS can follow up on those leads with speed that email cannot match. In categories where response time matters, the combination is powerful.

For brands with a mobile app, SMS and push notifications overlap in function but serve different audiences. Push reaches users who have your app installed and have granted notification permissions. SMS reaches opted-in contacts regardless of whether they have the app. For re-engagement campaigns targeting lapsed app users, SMS can be the more reliable channel precisely because it does not depend on app installation status.

What Good SMS Campaigns Look Like

The format forces discipline. You have 160 characters before a message becomes a multi-part send, and even with MMS and longer message support, brevity is the default expectation. That constraint is actually useful. It eliminates the waffle that creeps into email copy and forces you to make a single, clear point.

Good SMS messages share a few common characteristics. They identify the sender immediately. They make the offer or action clear within the first sentence. They include a link that goes somewhere relevant, not to a homepage. They include an opt-out instruction. And they are sent at a time that makes sense for the recipient, not just for the marketing calendar.

Timing is one of the most underestimated variables. Sending a promotional message at 6am or 10pm is not just ineffective, it is actively damaging. Most platforms allow you to set send windows that respect local time zones, and using those controls is basic hygiene.

Segmentation matters more in SMS than in almost any other channel because the tolerance for irrelevance is lower. An email subscriber who receives an irrelevant message might ignore it. An SMS subscriber who receives an irrelevant message at an inconvenient time will unsubscribe, and the list damage is permanent. You cannot re-acquire that number without starting the opt-in process again.

Mailchimp’s breakdown of SMS marketing for gyms is a useful vertical example of how segmentation and timing work in practice for a service business with predictable customer behaviour patterns. Similarly, their look at SMS marketing in insurance shows how the channel adapts to a more regulated, relationship-driven industry where trust is the primary asset.

The Metrics That Actually Tell You Something

Open rate is the vanity metric of SMS. It is high by default because of how the channel works, and citing it as evidence of campaign success tells you almost nothing about commercial performance.

The metrics worth tracking are click-through rate on links, conversion rate from click to desired action, opt-out rate per campaign, and revenue attributed to SMS sends. Opt-out rate is particularly telling. A spike in opt-outs after a specific campaign is a clear signal that the message, the timing, or the frequency was wrong. Most brands do not look at this carefully enough.

Attribution is genuinely difficult in SMS, as it is in most mobile channels. Last-click attribution will undervalue SMS because many conversions happen on a different device or session from the one where the text was received. Mobile marketing analytics requires a more nuanced approach than standard web analytics, and SMS is no exception. Incrementality testing, where you hold out a segment from receiving a message and compare conversion rates, gives you a much cleaner read on actual impact than any attribution model.

I spent a lot of time at iProspect building measurement frameworks that clients trusted. The honest answer is that no measurement system is perfect. What matters is that you have a consistent methodology, you apply it the same way across campaigns, and you are honest about what it can and cannot tell you. SMS attribution is an approximation. A good approximation, used consistently, is more useful than a precise number that is measuring the wrong thing.

For a broader view of how mobile analytics should be structured, Unbounce’s mobile marketing statistics resource provides useful context on benchmarks and what metrics are worth benchmarking against.

SMS and App Marketing: How They Connect

For brands with an app, SMS and app marketing are more intertwined than most teams treat them. SMS can drive app installs through direct linking to app store pages. It can re-engage dormant users who have the app installed but have not opened it recently. It can prompt users to take a specific in-app action, particularly effective for subscription renewals, feature adoption, or time-sensitive events.

The connection to app store optimisation is less obvious but worth understanding. If SMS drives a volume of installs to an app store page, the conversion rate of that page directly affects whether those SMS-driven clicks become installs. A weak app store listing is a leak in the funnel that SMS spend cannot fix. App Store Optimization techniques matter here because they determine what happens after the click, not before it.

If you are working with an external partner on app growth, it is worth understanding how they approach the relationship between paid and organic channels, including SMS. App marketing agencies vary significantly in how they think about channel integration, and the ones who treat SMS as part of a connected mobile strategy tend to produce better results than those who run it as a separate workstream.

ASO and SMS are not obviously connected, but they share a dependency on the same conversion logic. Optimizing ASO improves the conversion rate of every channel that drives traffic to your app store listing, including SMS campaigns that link directly to download pages. Treating them as separate problems means you are optimising in silos.

The Frequency Problem

Most brands that fail at SMS fail because of frequency. They build a list, see strong early results, and then send more messages to chase those results. The list degrades. Opt-out rates climb. Deliverability suffers. Revenue per message drops. They conclude that SMS does not work and move on.

What actually happened is that they burned a permission-based asset by treating it like a broadcast channel with no consequences.

Early in my career, I learned something that has stayed with me across every channel I have worked in: the most valuable thing a customer can give you is their attention. When they give it voluntarily, through an opt-in, you have something genuinely valuable. The fastest way to destroy it is to take more than you were given.

The right frequency depends on the category and the relationship. A flash sale retailer can sustain higher frequency than a financial services brand. A loyalty programme can send more often than a cold list. But in every case, the unsubscribe rate is the honest signal. If it is climbing, you are sending too much, and no amount of revenue attribution analysis will change that fact.

Most brands that get SMS right send fewer messages than they think they should. Two to four per month for promotional sends is a reasonable starting point for most categories. Transactional messages are different because they are expected and relevant by definition, but promotional sends should be rationed.

Building an SMS List That Holds Its Value

List quality degrades over time. Phone numbers change. People opt out. Engagement drops among long-standing subscribers. A healthy SMS list requires active management, not just acquisition.

The acquisition side is where most brands focus, and there is a range of approaches that work: website pop-ups with a clear value exchange, checkout opt-in, loyalty programme enrolment, keyword opt-ins promoted in physical locations or advertising. The value exchange matters. “Sign up for texts” is not compelling. “Text SAVE to 12345 for 15% off your first order” is.

The retention side is where the long-term value is built. Subscribers who remain on a list for twelve months and continue engaging are worth significantly more than subscribers who opt in for a discount and leave. Keeping them engaged means giving them messages that are relevant, timely, and worth receiving. That is a content and segmentation problem as much as a channel problem.

Re-engagement campaigns for dormant subscribers can recover some of the list, but they need to be honest about what they are doing. A message that says “we have not heard from you in a while, here is something worth your attention” is more effective than a generic promotional send to the whole list. And if someone does not re-engage after a re-engagement attempt, removing them from the active list is better than continuing to send to an unresponsive contact.

One thing I have seen consistently across the agencies I have run and the clients I have worked with: the brands with the best SMS programmes treat their list like a relationship, not a resource. They think about what the subscriber gets out of being on the list, not just what the brand gets. That orientation produces better creative decisions, better frequency decisions, and better results.

For a broader perspective on what mobile marketing campaigns look like when they are done with that kind of intentionality, Unbounce’s collection of mobile marketing campaign examples is worth reviewing. And for those thinking about the ROI side of the equation, MarketingProfs’ analysis of mobile advertising ROI provides useful historical context on what has and has not worked across mobile channels.

SMS marketing does not operate in isolation. It is one piece of a mobile strategy that includes paid media, app engagement, and analytics. The Mobile Marketing Hub pulls those threads together if you want to see how SMS connects to the broader picture.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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