SMS Marketing ROI Measurement: Turning Data into Growth

SMS remains one of the most powerful channels in the marketing mix. It offers lightning-fast delivery, sky-high open rates, and direct access to your target audience’s pocket. But with budgets under pressure, proving that every message drives business impact is more important than ever.

Many enterprise marketers struggle to link SMS performance to revenue and broader business goals. Click-through rates and engagement metrics are useful, but they only tell part of the story. Without tying results to sales and retention, SMS risks being undervalued.

Measuring return on investment (ROI) changes that. It turns SMS from a “blast and hope” tactic into a reliable growth engine, cementing its role in profitability and enterprise strategy.

What is SMS marketing ROI?

The ROI of SMS marketing is the percentage of revenue a campaign generates compared to its total costs. It’s the clearest way to show marketing efforts are paying off and to justify budgets with hard numbers. Beyond revenue, ROI measurement can reveal cost savings and efficiency gains. 

However, ROI isn’t confined to direct sales. It helps optimize campaigns, align marketing with sales goals, and contribute to overall enterprise marketing ROI by capturing long-term impact like customer retention and profitability.  

Over the next few years, ROI measurement is expected to evolve significantly. Stricter privacy laws and the decline of third-party cookies will push marketers to rely more on first-party and zero-party data. Predictive analytics and machine learning will also play a larger role, enabling teams to forecast behavior and lifetime value—shifting focus from immediate conversions to future growth potential. 

How to calculate SMS ROI

The SMS ROI formula is straightforward: 

ROI = [(Revenue - Costs) / Costs] × 100 

The challenge is identifying all your true costs. Start with platform fees (e.g., monthly or annual subscriptions) and break them down per campaign to see the real share of the expense. 

True costs also include the number of messages you send, the cost per message, and any overage charges. Don’t forget compliance-related expenses, like legal reviews, along with the labor required to manage campaigns.  

Once costs are clear, connect revenue back to your SMS marketing efforts using methods such as:

• Promo codes: Assign unique discount codes to specific text campaigns.
• UTM parameters: Add UTM tags to links in messages to track clicks in analytics tools. 
• Landing pages: Create dedicated landing pages for each campaign to make traffic easier to measure.
• Call tracking: Use unique phone numbers in messages to attribute inbound calls and offline conversions to SMS. 

Applied to the formula, here’s a simple example: if a campaign generates $50,000 in revenue and costs $10,000 to run, the ROI would be: 

[(50,000 - 10,000) / 10,000] × 100 = 400%

In other words, the campaign earned $4 for every $1 spent. 

Key metrics that shape ROI

Understanding SMS ROI starts with the right metrics. Tracking meaningful data helps marketers see what’s working and uncover new opportunities. The following key metrics act as a compass, guiding SMS marketing strategies toward greater efficiency and measurable growth. 

Response rate 

The average response rate for SMS surveys is 40–50%. Benchmarks vary by industry, so it’s important to measure your own performance against what’s typical in your market.

Response rate measures the percentage of recipients who engage with your SMS, such as replying, clicking links, or using promo codes. It shows how effectively your messages spark interaction and attention.

Higher rates signal strong relevance and timing, showing that your audience is both seeing and acting on messages. Even incremental gains can significantly improve profitability and campaign efficiency.

Click-through rate (CTR)

CTR measures the percentage of SMS recipients who click a link within a message. A higher CTR indicates active engagement and interest in your content. 

Optimizing CTR comes down to making sure your calls to action (CTAs) are clear and compelling. Use concise, action-oriented language and place links strategically so they’re easy for customers to act on. 

CTR benchmarks vary widely by industry and campaign types. Retail and ecommerce often see higher engagement because of promotional offers, while sectors like education or nonprofit tend to generate more modest interaction.

Conversion rate 

Conversion rates track the percentage of recipients who complete the desired action, like signing up or making a purchase, after receiving your message. It’s a direct indicator of how effectively your SMS campaigns deliver tangible results. 

Across industries, SMS tends to deliver higher conversion than other marketing channels. With its immediacy, high open rates, and personal reach, SMS makes recipients more likely to act quickly compared to email or social media. 

Opt-out rate 

Opt-out rates (or unsubscribe rates) measure the percentage of SMS subscribers who choose to unsubscribe after receiving a message. Lower rates are always better, while higher rates may point to issues with message relevance or frequency. 

Spikes in opt-outs can result from sending too many messages, delivering content that lacks personalization, or overwhelming subscribers with offers that don’t meet expectations. 

To prevent opt-outs, make sure your messages are timely, personalized, and aligned with subscriber preferences. This keeps engagement steady and reduces the risk of losing contacts from your list.

Cost per acquisition 

Cost per acquisition (CPA) measures how much it costs to acquire a new customer through your SMS marketing campaigns. It includes all campaign-related expenses, from platform fees to message costs, and serves as a key metric for understanding efficiency. 

To assess profitability, compare CPA against the customer lifetime value (CLV). If acquisition costs are lower than the revenue a customer generates over time, the campaign is profitable. SMS often delivers lower CPA than other channels because of its high engagement and immediacy. 

Common ROI measurement challenges (and solutions)

While the formula for SMS ROI is simple, measuring it in practice can be complex. A frequent challenge is multi-channel attribution—customers interact across email, social, web, and SMS, making it difficult to pinpoint which touchpoints drive conversions. Unique tracking codes and multi-touch attribution models help capture SMS’s true impact across the customer journey.

Delayed conversions create another hurdle. SMS influence isn’t always immediate, especially for higher-consideration purchases. Many marketers rely on attribution windows that are too short, which causes them to miss conversions that occur days or even weeks later. Extending the window gives a more accurate picture of campaign performance.

Siloed data is also a major barrier. When SMS results are disconnected from customer relationship management (CRM) and analytics platforms, it’s hard to see how campaigns contribute to overall growth. Unified reporting tools like Tenon solve this problem by consolidating campaign, sales, and engagement data. This provides a clearer view of ROI, including indirect benefits such as stronger retention and cross-channel lift. 

Strategies to optimize SMS ROI

Maximizing SMS ROI takes more than sending messages—it requires strategy. Every text should have a clear purpose, with smart targeting and measurable outcomes guiding campaign design. This focus turns SMS into a reliable growth driver and ensures each message delivers real value. 

Personalize your text messages 

Personalization makes SMS feel tailored and purposeful, creating a better customer experience. Incorporating details such as a recipient’s name, past purchases, or behavior-driven triggers (like browsing a product) can significantly lift engagement and conversions. 

For instance, a generic message might say: “Check out our latest deals!” That’s easy to ignore. A personalized version could read: “Hi Sarah, we noticed you loved our running shoes. Get 25% off your next pair today!” 

Customizing content to the individual increases the likelihood they’ll act, building stronger connections and delivering higher ROI.  

Manage your lists carefully 

A healthy subscriber list starts with clear opt-in consent and careful management. When your messages reach the right people at the right time, engagement goes up, and you avoid spending on contacts who aren’t interested. 

Remove inactive numbers and bounced contacts to keep your list clean. Segment audiences by factors like demographics, past purchases, or stated preferences to make messages feel more relevant and personal. 

Give subscribers control over what they receive through preference centers. This builds trust, reduces opt-outs, and ensures each message counts. 

A/B test your campaigns 

A/B testing is a practical way to compare two versions of a message and see which performs better. Focus on one variable at a time (like the CTA, message length, offer type, or timing) so results clearly point to what drives higher engagement and conversions. 

Run tests at scale to ensure reliability. Sending each variant to at least 1,000 recipients produces statistically meaningful results, rather than outcomes driven by chance. This disciplined approach makes it possible to turn small adjustments into measurable gains, maximizing ROI without guesswork. 

Choose optimal timing 

Timing has a major impact on how well SMS messages engage recipients and drive conversions. General best practices (and federal regulations) recommend sending messages between 8 a.m. and 9 p.m., but the most effective times within that window vary by industry. 

For example, concert promoters often see the best results by sending texts right before tickets go on sale—usually around 10 a.m. in the local market. A retailer, on the other hand, might schedule messages for Thursday evening, when customers are winding down after work and more likely to engage with upcoming weekend sales.

Ultimately, the right timing depends on your audience. Analyze past engagement data and run A/B tests to pinpoint when your campaigns will deliver maximum impact. 

Integrating ROI insights with your marketing stack 

When SMS data sits in a silo, it creates blind spots that make it harder to see how campaigns influence sales and customer engagement across channels. Incomplete attribution and fragmented reporting can leave marketers guessing, while disconnected systems reduce the ability to optimize campaigns. 

Integrating SMS with your marketing stack eliminates those gaps. Tenon brings SMS performance directly into ServiceNow, linking engagement data with customer records, support interactions, and sales pipelines. This integration enables more accurate attribution, automated reporting, and insights into both short- and long-term customer value. 

As a single source of truth, Tenon helps teams confidently plan, execute, and measure SMS campaigns. Consolidated data reduces errors and empowers smarter, cross-channel decisions. 

Connect SMS campaign data to ServiceNow with Tenon and unlock stronger ROI.

Turn data into revenue growth with Tenon 

SMS delivers exceptional ROI when campaigns are measured and optimized. But connecting those valuable insights across the business is what unlocks their full potential. ROI data can guide sales strategies, strengthen customer success, and support leadership decisions that improve the bottom line.

Tenon makes this possible by embedding SMS ROI measurement directly into ServiceNow. Marketing teams can connect campaign performance to customer data and revenue outcomes, showing how messages move deals forward and help accounts grow. With SMS results visible in the same dashboards executives use to track business performance, marketing gains a clear seat at the table in revenue discussions.

Ready to elevate text message marketing as a strategic growth driver? Book a Tenon demo to see how you can measure and scale SMS ROI.

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