Key SMS Metrics for Higher ROI

SMS marketing in Australia delivers unmatched results, with 98% open rates, 45% response rates, and an ROI of up to 7,100%. To make the most of this channel, focus on tracking key metrics like delivery rates, conversions, and opt-out rates. These metrics help refine your campaigns, improve engagement, and maximise returns.

Key insights:

• Delivery Rate: Ensure messages reach valid recipients; aim for 95%+.
• Open Rate: SMS dominates with a 94%+ benchmark in Australia.
• Response & Conversion Rates: Track engagement and actions; SMS averages 45% response and 36% click-through.
• Opt-Out Rate: Keep this below 2% by delivering relevant, well-timed messages.
• ROI: SMS generates A$45–A$71 per A$1 spent, far outpacing email.

With 61% of Australian businesses increasing SMS budgets, success hinges on clean contact lists, personalised messaging, and compliance with local laws like the Spam Act 2003. By leveraging these metrics, you can fine-tune your SMS strategy and achieve measurable growth.

How To Get Massive ROI & More Sales Using SMS Marketing

Core SMS Metrics That Impact ROI

Knowing which metrics to track can make a huge difference in the success of your SMS campaigns. These five metrics are key to understanding how well your efforts are translating into results and ensuring your marketing dollars are spent wisely.

Delivery Rate

The delivery rate measures the percentage of messages that successfully reach valid recipients. It’s the starting point for any SMS campaign - if your messages aren’t being delivered, they can’t drive engagement or revenue.

Low delivery rates often result from invalid numbers, disconnected lines, or messages being flagged by carrier spam filters. To improve this metric, keep your contact list clean by removing invalid numbers and monitoring bounce rates. Using trusted SMS platforms with strong connections to Australian carriers like Telstra, Optus, and Vodafone can also help. Avoid spammy language and maintain consistent sending habits to protect your deliverability.

Open Rate

SMS boasts an impressive 98% open rate [7], meaning nearly every message you send is read. Even better, most of these messages are opened within minutes - 97% are read within 15 minutes of delivery [8]. This immediacy makes SMS perfect for time-sensitive promotions, flash sales, or urgent updates.

In Australia, where mobile phones are an essential part of everyday life, people tend to check their text messages almost instantly. This gives SMS a unique edge over other communication channels.

Response and Conversion Rates

Response rates show how many recipients engage with your messages, while conversion rates measure how many take the desired action, like making a purchase or signing up. On average, SMS campaigns see a 45% response rate and a 36% click-through rate - figures that directly translate into more traffic and sales for Australian businesses [2][7].

To maximise these metrics, use analytics tools to track what’s working. For example, monitor the time it takes for recipients to convert after receiving a message, or analyse the average order value from SMS-driven traffic. This data can help you fine-tune your campaigns and link SMS performance directly to your revenue.

Opt-Out Rate

The opt-out rate is a critical indicator of how well your SMS campaigns are resonating with your audience. When customers unsubscribe, it’s often a sign that your content, timing, or frequency isn’t hitting the mark. A high opt-out rate could mean you’re sending messages too often or that your content isn’t relevant [4].

By closely monitoring when and why people unsubscribe, you can adjust your approach. For instance, if opt-outs spike after certain types of messages or during specific times, tweak your content or schedule accordingly.

It’s also vital to comply with Australian regulations. Businesses must provide a simple way for recipients to unsubscribe, usually through a "STOP" reply keyword [11]. Ignoring this can lead to hefty fines - up to A$2.5 million for companies and A$500,000 for individuals [11]. Keeping an eye on opt-out rates isn’t just about improving your campaigns; it’s also about staying on the right side of the law.

Cost per Acquisition and ROI

SMS marketing is known for its affordability and high returns. On average, it delivers an ROI of A$45–A$71 for every A$1 spent [7]. Some campaigns even report returns as high as 7,100% [10].

Take Princess Polly, for example. By targeting inactive segments with flash sales and revenue-focused SMS campaigns, they achieved a 73x ROI [7].

"SMS marketing delivers an average ROI of A$45–A$71 for every A$1 spent, though this can vary depending on your industry, campaign type, and execution strategy." – Sandra Posavac, Content Marketing Specialist [7]

To calculate your SMS ROI, divide the revenue generated by your campaign costs, including platform fees, message expenses, and staff time. Tracking this regularly - say, monthly - can reveal trends and help you optimise future campaigns for even better results.

These metrics lay the groundwork for improving your SMS strategy, from perfecting message timing to personalising content and refining your contact lists.

Practical Ways to Improve SMS Performance

Boosting SMS performance involves strategic actions that enhance engagement, conversions, and ROI. By focusing on these practical techniques, you can refine every aspect of your SMS campaigns, ensuring they deliver maximum impact.

Message Timing

Timing plays a huge role in the success of SMS campaigns. In Australia, 94% of people open their text messages, with 78% reading every SMS they receive [6]. The key isn’t whether your message will be seen - it’s sending it when your audience is most likely to act on it.

For the best results, send messages on weekdays between 9 AM–12 PM or 5 PM–9 PM. Promotions for food or retail often perform well during lunch breaks (12 PM–3 PM), while ongoing offers tend to see better engagement after work hours (5 PM–9 PM) [12].

"Timing is everything in SMS marketing. And picking the best time to send SMS marketing campaigns can mean the difference between high engagement and wasted potential." [12]

Target specific days like Thursdays, Fridays, and Saturdays for even higher engagement. Testing different times through A/B experiments can help you figure out what resonates most with your audience [12]. Keep in mind that what works for a Brisbane retailer might not work for a Perth restaurant due to time zone differences. Since 86.1% of recipients read SMS messages within 30 minutes, a poorly timed message risks being ignored altogether [6].

Personalisation and Audience Segmentation

Once you’ve nailed the timing, personalisation is the next step to drive engagement. Research shows that 72% of consumers interact only with personalised messages, and 80% are more likely to buy from brands that personalise their communication. On the flip side, 66% of people say they’d abandon a purchase if the messaging wasn’t tailored to them [13].

Start small by incorporating personalisation tokens, such as including the recipient’s first name or company name in your messages [13]. Then, use audience segmentation to group customers based on their behaviour, purchase history, or location [15][16].

Here’s an example: A Sydney fashion boutique sent out this targeted SMS to its subscribers:

“VIP Sale: 40% off this weekend only. Reply YES for early access.”

By sending this message on a Friday afternoon to 2,000 subscribers, they received 300 replies and generated A$15,000 in sales - a 15% conversion rate [3].

Here are some segmentation ideas to consider:

• Location-based segments: Tailor messages to local conditions. For example, promoting winter coats might work in Melbourne but not in Darwin [15].
• Engagement-based segments: Offer exclusive deals to your most active subscribers, while using incentives to re-engage less active ones [15].
• Purchase history segments: Suggest related products based on what customers have bought previously.

Gathering customer preferences during the opt-in process can also provide valuable insights for creating highly targeted campaigns [15].

Contact List Management

Keeping your contact list up-to-date is crucial for effective SMS campaigns. Regularly clean your list by removing invalid numbers, disconnected contacts, or those who are no longer engaged. This improves your delivery rates and ensures your messages reach the right audience [18].

Segment your list based on engagement levels. For example, active subscribers can receive more frequent updates, while less engaged ones might benefit from fewer messages or re-engagement efforts [18]. Additionally, maintaining detailed records of when and how each contact joined your list is essential for compliance and accountability.

Training your team on best practices for managing customer data and keeping the list organised will also go a long way in maintaining quality.

Australian Legal Requirements

Staying compliant with Australian SMS marketing laws is non-negotiable. The Spam Act 2003 and Privacy Act 1988 require businesses to obtain explicit consent before sending marketing messages [14]. A double opt-in process is a great way to ensure consent is clear and verifiable.

Each SMS must clearly identify your business and include opt-out instructions, such as “Reply STOP to unsubscribe.” These instructions need to remain active for at least 30 days, and unsubscribe requests must be processed within five working days [14][17].

It’s also critical to store personal data securely and limit access to authorised personnel. Keeping detailed records of consent can protect your business in case of regulatory audits [14].

To simplify compliance, consider using platforms with built-in features like automatic opt-out links and compliance tracking [14]. Non-compliance can result in hefty fines - up to A$2.5 million for companies and A$500,000 for individuals - so investing in proper systems is a smart move.

SMS Metrics Comparison

When it comes to SMS marketing, knowing how different metrics compare can help you zero in on the ones that align best with your campaign goals. Each metric sheds light on specific aspects of your strategy, offering opportunities for targeted adjustments. Below is a table that breaks down key SMS metrics and their benchmarks in Australia.

Metrics Comparison Table

This table underscores the importance of tailoring your metric selection to your campaign’s objectives while keeping the Australian market in mind.

SMS: A Powerful Marketing Tool

The numbers don’t lie - SMS marketing consistently outperforms other channels. For example, the 45% response rate dwarfs email’s 6%, proving that SMS messages don’t just get seen - they prompt action [1].

Take Dahmakan, an eCommerce platform, as an example. By leveraging SMS for customer loyalty campaigns, they doubled their conversion rates and cut costs by 30% [9].

The potential ROI is equally striking. SMS marketing can deliver returns of up to A$71 for every A$1 spent, compared to email’s A$42 return [9]. That’s a 69% higher ROI, making SMS an appealing choice for Australian businesses aiming to stretch their marketing dollars further.

Real-world examples back up these claims. Management Financial Group saw a 20% increase in open rates, a 15% rise in response rates, and a 30% uptick in customer interactions after putting SMS at the centre of their strategy [9]. Their success highlights the value of tracking multiple metrics to get a well-rounded view of campaign performance.

For Australian businesses, the 94% open rate means your messages are almost guaranteed to be seen [3]. Even better, 90% of SMS messages are read within three minutes, ensuring your message reaches your audience quickly [3]. But while visibility is a given, the real challenge lies in boosting response and conversion rates, which depend heavily on factors like timing, message content, and industry specifics.

Another standout case is Hrvatski Telekom, which partnered with Infobip to focus on revenue-driven metrics. This approach resulted in a 20% year-on-year revenue increase and a 10% rise in customer interactions [9].

Matching Metrics to Goals

The key to SMS success lies in aligning your metrics with your campaign goals. For a flash sale, focus on conversion rates and revenue per message. If you’re running a brand awareness campaign, open rates and reach should take priority. For customer service messages, pay attention to response rates and satisfaction scores.

And don’t forget, SMS marketing can deliver up to a 2000% ROI during peak shopping periods like Black Friday [10]. This kind of potential makes it essential to track the metrics that genuinely drive revenue - not just the ones that look impressive on a report.

Australian Business Examples and Market Trends

Australian businesses are showcasing the power of SMS marketing with real-world achievements and emerging trends that are reshaping the way they connect with customers and drive returns.

Australian Business Case Studies

Businesses across Australia are tapping into SMS marketing, with 66% adopting SMS software by 2025 and 67% planning to increase their budgets [20]. These numbers highlight how SMS strategies are translating into measurable success across industries.

Take Vinomofo, for instance. This wine retailer integrated SMS with their HubSpot platform, achieving an incredible 120x ROI and 21% conversion rate. Their focus on re-engagement campaigns helped reduce customer churn significantly. Jobeth Harvey, Email Marketing Manager at Vinomofo, shared:

"The SMS for HubSpot integration has been a fantastic addition to our marketing arsenal with 120X ROI and 21% conversions!" [19]

Meanwhile, Muse Pilates saw a 16% increase in click-through rates after incorporating SMS into their marketing. They’ve used bulk SMS to promote class packs and offers, with personalisation through custom fields. In 2023, 56% of their outbound messages were MMS, achieving an average click-through rate of 23%. Mackenzie Ford, Group Marketing and Sales Manager at Muse, remarked:

"Since we started using Sinch MessageMedia and SMS, our conversion rate has consistently gone up." [19]

Yarn, a corporate sales-focused business, achieved a 3x ROI by blending SMS and MMS for event promotions. They’ve also used two-way SMS to nurture client relationships. Adam Benz, Virtual Marketing Officer at Yarn, explained:

"Using SMS alongside other channels like email helps us push our messages to the front of what can be a very long queue - and we know they're much more likely to respond because they're always on their phones." [19]

For Hamper Emporium, SMS campaigns aimed at repeat customers boosted repeat purchases by 36%, with revenue spikes occurring within minutes of sending messages. Nikki Barnett, Head of Marketing, expressed her amazement:

"I was amazed at the difference in open rates, engagement, and click-throughs. It's so instant. The minute after I send an SMS, you can see revenue from our website spike. It's crazy!" [19]

Other major retailers have also embraced SMS with impressive outcomes. Target Australia encouraged customers to text "JOIN" for exclusive discounts, growing their subscriber list while staying compliant with regulations [21]. Catch.com.au uses SMS reminders for abandoned carts, recovering A$800,000 annually with messages like "Forgot these? 10% off to complete your order!" [21]. Similarly, Rebel Sport launched an "SMS Squad" offering early sale access, increasing redemption rates by 25% [21].

These case studies underline the effectiveness of SMS marketing and pave the way for trends that are reshaping the industry.

New Trends in SMS Marketing

The SMS marketing landscape in Australia is evolving, with businesses adopting strategies that enhance engagement and deliver better results.

Personalisation has emerged as a key driver of engagement. Research shows 51% of consumers are more likely to engage with messages tailored to their interests or purchase history [16]. For example, a Melbourne fitness chain segmented its audience into "newbies" and "veterans", sending new members a free class invitation that doubled sign-ups [21]. Pizza Hut Australia takes this further with messages like, "Hi Sarah, your fave pizza's half-price today!" [21].

Automation is also gaining traction, helping businesses save time and cut costs. A Perth boutique automated shipping confirmation texts, reducing customer inquiries by 35% [21]. This shift towards automation is helping businesses maintain consistent communication without adding to their workload [5].

Two-way communication is becoming increasingly important as customers expect interactive experiences. Many Australian businesses now use conversational SMS platforms to meet this demand, moving away from one-way broadcasts [6].

Multi-channel integration is another game-changer. For example, Myer sends email promotions followed by SMS reminders 48 hours later, doubling engagement rates [21]. This reflects the fact that SMS drives 3x more engagement than email alone [21].

Timing optimisation is also evolving. Data analysis has helped businesses fine-tune when to send messages. A Brisbane bar tested "Happy hour" texts at 3 PM and 5 PM, finding that 5 PM messages tripled turnout [21]. Most businesses now recognise that peak engagement happens between 10 AM and 8 PM [21].

Finally, compliance has become a critical focus, especially after an Australian company was fined A$79,800 in March 2024 for sending unsolicited marketing messages. Staying compliant with the Spam Act 2003 is now a top priority [6].

Despite the progress, there’s still plenty of room for growth. Currently, only 43% of Australian consumers engage with brands via SMS [22]. Globally, the SMS marketing sector is expected to grow 20.3% annually through 2025, with spending projected to hit A$50 billion [20].

The statistics are hard to ignore: 75% of consumers prefer receiving promotions via SMS [20], and SMS marketing delivers an ROI of A$21-A$41 per A$1 spent [20]. With 78% of Australians reading every SMS they receive [6] and 90% of texts read within 3 minutes [5], these trends are not just shaping the future - they’re delivering results right now.

Conclusion: Using Metrics to Improve Results

SMS marketing offers impressive returns, with campaigns achieving up to 98% open rates and 29% conversion rates. These figures highlight how tracking the right metrics can directly translate customer behaviour into revenue[7].

In Australia, SMS marketing proves its value with businesses earning between A$45 and A$71 for every A$1 spent[7]. These results underscore the importance of using key performance indicators to guide strategy and maximise returns. Regularly refining campaigns based on performance data is what sets high-performing efforts apart. For instance, personalised SMS campaigns can generate up to 40% more revenue when businesses align messages with what resonates most with their audience[7].

One of SMS marketing's standout features is its rapid feedback loop - with an average response time of just 90 seconds[7]. This speed allows businesses to make real-time adjustments, maintaining relevance and gaining a competitive edge.

For Australian businesses, success hinges on establishing strong metric tracking systems, using data to inform decisions, and adhering to local compliance requirements. The combination of high engagement rates, instant response times, and clear ROI positions SMS marketing as one of the most effective tools available - provided businesses are committed to leveraging these insights.

Data-driven SMS strategies not only maximise marketing budgets but also turn SMS into a profit-driving channel. Companies that embrace this approach can transform their marketing spend into measurable and sustainable growth.

FAQs

What steps should I take to ensure my SMS marketing campaign complies with Australian laws?

To stay on the right side of Australian SMS marketing laws, particularly the Spam Act 2003, it’s crucial to secure explicit consent from your recipients before sending any messages. A great way to do this is by using a double opt-in process, which confirms that customers knowingly and willingly agree to receive your communications.

Every SMS you send must also provide a clear and simple 'STOP' option, allowing recipients to unsubscribe whenever they choose. On top of that, make sure your messages are sent only during reasonable hours. This shows respect for your audience's time and helps avoid unnecessary complaints. Following these rules not only ensures compliance but also strengthens trust and credibility with your customers.

How can I reduce the opt-out rate in my SMS campaigns?

To keep your SMS opt-out rate low, focus on sending messages that matter to your audience. Start by dividing your subscribers into smaller groups based on their interests or behaviours. This way, your messages feel more personal and relevant.

Be upfront when people sign up. Let them know what kind of messages they'll receive and how often. Stick to a reasonable message frequency - no one likes to feel bombarded. Also, make it simple for people to opt out if they want to.

It's a good idea to regularly tidy up your subscriber list. Remove numbers that are no longer active and make sure your messages consistently offer something of value, like exclusive deals or important updates.

How can I accurately calculate the ROI of my SMS marketing campaigns?

To figure out the ROI of your SMS marketing campaigns, you can use this simple formula:

ROI = (Revenue generated – Campaign costs) ÷ Campaign costs

First, pinpoint the revenue that came specifically from your SMS campaigns. Then, subtract all the costs tied to running those campaigns - this includes software, message fees, and any labour involved. Finally, divide that result by the campaign costs to get your ROI.

This calculation gives you a clear picture of how well your SMS marketing is driving business growth. By keeping an eye on these numbers regularly, you can tweak your campaigns and make smarter, data-driven decisions to get the most out of your investment.