SMS Marketing Campaigns that Increase eCommerce Sales

Every company wants to sell more and acquire more customers. Businesses have known for ages that deals, discounts, and offers help achieve that aim. The internet is no exception - for 71% of consumers, coupons and discounts were identified as the biggest factor which influenced their online shopping behavior. Ecommerce companies cannot afford to ignore this high-impact method to increase their sales.

(Source: “U.S. internet user purchase influence factors 2016”, Statista, 09/2018)

But what good are offers when they’re ignored? The default channel used for marketing campaigns is social media for broadcast marketing and email for direct marketing. However, with spam making up 55% of email in 2018, people are beginning to ignore promotional emails. Between 2016 and 2018, open rates for retail emails dropped from 43.8% to 30.3%. Even click-through rates (CTRs) plummeted from 30.3% to 2.7% in just two years.

(Source: “Spam: share of global email traffic 2014-2018”, Statista, 12/2018)

(Source: “2016 SendGrid Global Email Benchmark Report”, & “2018 SendGrid Global Email Benchmark Report”, SendGrid)

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Mobile Messaging is the new channel for online promotions

SMS is seen as a better alternative because it leverages cell phones, the most ubiquitous consumer device to have ever been created. 95% of all Americans own cell phones, and 77% of those own smartphones. With 79% of online purchases made from mobile phones in 2018, businesses should be using SMS to send promotions to their audience.

(Source: “Mobile Fact Sheet”, Pew Research Center, 02/0518)

(Source: “Mobile eCommerce Statistics (Updated 2019) Percentage of Mobile mCommerce Shopping Trends”, OuterBox, 04/22/2019)

The excellent engagement rates seen for promotional SMS demonstrates the channel’s potential. Open rates are nearly 4x that of email marketing and attract nearly 15x more click-throughs. Getting eyes on your promotions and offers is key - if a campaign isn’t generating sales, interest, and brand awareness, it isn’t a worthwhile investment.

(Source: “Email Marketing Benchmarks”, MailChimp, updated 03/2018; “How effective is SMS Marketing in 2018”, Wayne McMahon, 05/04/2018)

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Why are online promotions important?

Discounts have a disproportionately large impact on consumer behavior. More than 64% of online consumers wait for a sale before buying things, and 59% look for discounts and promotions before finishing their purchase. Nearly 2/3rds of all surveyed consumers indicated that a coupon or discount can push them over the edge when they still aren’t certain whether or not they want to buy. Online promotions and discounts are often the critical difference that closes a sale, and all eCommerce brands must use this tool wisely to boost revenues, clear stocks, and get through lull periods. Promotions are the fuel that ignites eCommerce sales.

(Source: “How Discounts Affect Online Consumer Buying Behavior [Infographic]”, Stacey Rudolph, 06/19/2016)

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Which online campaign should I start with?

There are various different types of promotions and discounts campaigns that your eCommerce store can offer. Picking the right one depends on your business goals and what you are trying to accomplish - you have to strike the difficult balance between driving sales and making the campaign too expensive by offering too much.

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Buy one, get one free!

When to use:

• Clearing inventory of slow-moving goods
• Generating quick cash and sales
• Acquiring more customers

Pros:

• Best value ‘perception’ to customer
• Drives sales and increases cash flow

Cons:

• Expensive; loses some meaning if it’s repeated too often

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Percentage discounts

When to use:

• Carts are being abandoned
• A substitute is competitively priced
• To boost seasonal/holiday sales runs

Pros:

• New customers and greater traffic
• Increase in sales

Cons:

• Striking the right balance of discount and cost is difficult

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Free add-ons

When to use:

• When two products in your portfolio are designed to be used together
• Big price disparity between products
• To boost sales when discounts are difficult to offer

Pros:

• Helps ‘bundle’ products in consumer’s heads
• Showcases value of secondary product\

Cons:

• Doesn’t always work - people need to see value in what they’re getting

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Flat discount - $$$ off

When to use:

• When you want to encourage sales across your company’s portfolio
• Promote sales when the budget is tight
• Drive big ticket sales

Pros:

• Usually conditional - requires purchases of a threshold value
• Helps you control total expense easily

Cons:

• Requires careful calculation to make sure it works out positively

Different campaigns and discounts work differently on different customers. This creates a problem when initiating a campaign. However, technology now offers a solution. Voyage, for example, allows you to curate and segment your customers on the basis of different characteristics.

What does this mean? You can automatically segment your audience based on how frequently they buy, how much they spend, and how recently they bought from your online store. If someone who usually buys a lot from your store hasn’t bought anything for a while, you can send them an extra special discount to get them back. Personalization and automation is a key tool for driving and increasing eCommerce sales.