The SMS Commerce Revolution is Here to Stay

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With marketers seeing upwards of 97% open rates and 30%+ clickthrough on SMS commerce messaging, texting with your favorite brands is now verified as an essential conversion tactic. Our latest Exit Intent podcast spoke with Growthbuster Founder and Outer Aisle CMO Vasa Martinez to give us insight into the burgeoning category. Here are the questions we asked him:

Why is SMS making its way into tons of marketing and commerce conversations? (:34)

Short answer: It’s a very human channel.

Is the average person ready to text with their favorite brand? (2:10)

Short Answer: Yes, and 70% of people prefer to contact businesses via text. (Source)

What percentage of ecommerce revenue can SMS be attributed to? (3:03)

Short Answer: 10-20% if SMS is done right. (Source: growthbuster client data)

What are the similarities/differences between Email & SMS audience acquisition? (4:39)

Short Answer: Similarities in types of flows, differences in tone

What do you recommend for someone setting up an SMS service for the first time? (6:18)

Short Answer: Move slow, try messaging without promotions first. Use promotions to close.

What did you see from 2020’s Black Friday/Cyber Monday in relation to SMS? (8:29)

Short Answer: A shi*load of texts were sent and it worked.

Full transcript of our conversation can be found below.

Geoff: Welcome to Exit Intent, a growthbuster podcast, featuring the people and strategies focused on CPG growth toward investment and acquisition. I'm your host, Geoff Kutnick, Chief Content Officer here at growthbuster. And with us, we have Vasa Martinez, current CMO of Outer Aisle and began his marketing career at Quest Nutrition. Vasa let's get straight into it. Why do the letters SMS, seem to find their way into tons of current marketing conversations?

Vasa: Yeah, so I think the first answer is it's a very human channel. People are beginning to be more open to shopping via text. People are certainly open to communicating via text. I think it's a big homage to Dirty Lemon who began this years ago. I think 2016 with their automation and their proprietary API, but now people are really catching up to it in the e-commerce space. And it's been really fun to watch. The numbers don't lie. It's 97% open rate, 40% click through and it's just easy to do.

But as easy as it is, there's always a way to make things or do things the wrong way. And you have to be very conscientious of your messaging and it can't feel corporate. It has to feel as though a friend is texting a friend, so it's not too intrusive. I like to call SMS a very intimate marketing channel, not like romantic intimate, but intimate as in you're texting somebody. So how you think about when you're texting them, what you're saying is a very important thing.

Geoff: How much do you think that the average person is ready to text with their favorite brand? I know personally for myself, it started with a lot of shipping notifications and I wanted to be able to see those type of interactions and updates, but just based on the common denominator, would you say that the average American is ready to text?

Vasa: I think so. I think the numbers are, and don't quote me on this, but I think 70% of folks prefer to shop via text versus website. And that's a great thing as long as your website's dialed, you can have a link going to that. So yeah, I think people are ready and I think the number is only going to increase. I think this past Black Friday, Cyber Monday is a testament to that. I can imagine the number of total dollars sold via text, but I think the ship has already sailed and people are still jumping on board.

Geoff: For a brand listening right now that is trying to understand how much they could eventually attribute from SMS to e-commerce revenue, what are some of the numbers that you're seeing with the work that you've been involved in?

Vasa: I'm seeing between 10 and 20% of total revenue via SMS if done right. And one of the biggest things I would say is to really take it slow with your automations and your campaigns, and really be thoughtful in how you're acquiring these numbers. Obviously, there's some thought you need to put behind the legality of it with TCPA Compliance. So acquiring the numbers is one thing, how you go about flows or automations as well as campaigns, is another thing.

And then, it gets really tricky when you think about how text communicates with email. I don't think that they're interchangeable, I think that they're in addition to, but believe the number is that with both of these channels working in tandem, the overall results increased by 30%. So that's a huge thing to think about when getting set up is your automations, your automations or flows, your campaigns. How are you capturing these numbers? Are you being compliant? And then it comes down to creative and copy.

Geoff: Vasa, are there any major differences in relation to the common strategies that brands use when acquiring email addresses versus acquiring numbers and SMS? I mean, you mentioned compliance in your last statement. I'm just curious about, do you think about acquisition for SMS in a similar way? Is it vastly different to you?

Vasa: It's like that same, same, but different saying, they're both very similar. What I mean by that is with email, you're going to have a welcome series. You're going to have shopping cart abandonment. With SMS, you're going to have welcome series. You're going to have shopping cart abandonment, but there's a lot more layers to that than just those two foundational flows, depending on if you call it a campaign or a flow via Klaviyo or Postscript, who we use often with every one of our clients.

I think it's important to really think about what the timing is of those flows or automations for both series. Example, if somebody signs up on a flyout or a pop-up or modal, if your communications are going out at the same exact time, might not be the best bet, something to test. But I typically like playing with the timing of those automations, maybe 60 minutes or a day on a welcome series, test that out with the conditional splits for the first interaction via email. But I like to be a little bit quicker via text. Especially most people are shopping on their phone, they abandoned their cart, maybe, flip them a text in the next 30 minutes and test that out. Ultimately it comes down to testing and learning.

Geoff: For someone that's listening and signing up to an SMS service for the first time, they're setting up their first texting message to their potential clientele. What would you recommend or do you have a couple of things to consider when starting to execute SMS to start?

Vasa: Yeah. Moving slow is really moving fast when it comes to SMS, so slow down in order to speed up. And what I mean by that is we use Postscript, I'm a big fan of Postscript, how segmented you can get. There's 30-day free trial with Postscript, get your hands dirty there, figure things out, don't set anything live yet, but spend those 30 days thinking about things. That's exactly what I did with Outer Aisle. Thinking about some people do a promotional strategy to acquire emails and phone numbers. I would say, really go slow, get the foundational automation set up, think about the timing. And if you lean heavy into promotions on the front end, I would advise maybe trickling that back a little bit. And having that be something that is available in one of those automations or both. So if you have a three-part welcome series on email, I like to call it the cleanup batter as the third part of the email and the third text, have that discount come then.

But the first two communications are all about RTB, reasons to believe in a brand. And I like to talk about what are the features of benefits, why does this product exist? They obviously put their number in for a reason, and if they didn't convert, they want to know more. So it's our job to let them know more about the product and then come to a fully responsible decision about the product. So I leaned the first two about education. Third is maybe that discount, and then you'll have other parts where you acquire phone numbers or emails where maybe it's immediate, where you give them the discount. But you have to think about each different keyword when doing so.

Geoff: So, last question on the hot seat. But before we close, obviously 2020 Black Friday, Cyber Monday just passed, we're in a e-commerce environment because of what everyone's experiencing in the world like we've never seen before. Was there anything that you explicitly saw from this past year's Black Friday, Cyber Monday, that taught you anything?

Vasa: Yeah. That a lot of companies sent a shitload of texts and it worked and it's great to see, it's proof of concept. More people are going into SMS. And I think it's a great thing for e-commerce. It's exciting. It's fun watching what different brands are doing. It's fun seeing consumers being open to even being texted. I think 2021 is going to be even larger. I don't have any specific data points on text revenue, but I'm sure there's some case studies out there. I know Postscript just launched one. I haven't read that yet, but that's what I learned in Black Friday, Cyber Monday is like holy moly text is actually a part of the future.

Geoff: Well, Vasa, thanks for jumping on to Exit Intent. And for everyone listening, if you have a question about SMS, please send me a line. geoff@growthbuster.com. That's Geoff with a G, G-E-O-F-F @growthbuster.com. And we'll try to answer it on a future episode. Stay tuned for another part of our SMS series to come. Thanks again for listening to Exit Intent and Vasa thank you for joining, until next time.

Vasa: Thank you Geoff.



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