Analytics Tools

INSIGHTS
Email marketing's customer acquisition cost runs from a few cents to $3 per customer.
Customers open 98 percent of SMS marketing messages.
On average, customers respond to SMS messages within 90 seconds, whereas customers respond to email messages in about 90 minutes.

SMS marketing sees a much higher open rate, a much higher response rate, and a faster customer response time than email marketing. Customers open 98 percent of SMS messages, contrasted against customers opening only 20 percent of emails. While we were able to get an estimate of the email marketing customer acquisition cost (in a range from a few cents to $3 per customer) we were unable to acquire the same information on SMS marketing. We were also unable to find any data on the Customer Lifetime Value (CLV) prospects for either channel using publicly available information sources.

High-profile market research and marketing industry publications sites like Never Bounce, PriceWaterhouseCoopers, Ernst & Young, Deloitte Touche Tohmatsu, and KPMG. However, two key data points eluded us from these sources: customer lifetime value data for these types of marketing campaigns and the SMS channel customer acquisition cost.

Expanding our search, we went to prominent email and SMS marketing firms, like SMS Bump, PostScript, Retention Rocket, CartsGuru, MessageMate/IMPower, ReCart, and ShopMessage. We explored them web presences, press releases, and financial reports, hoping to find CLV and SMS customer acquisition cost data, but nothing comprehensive emerged, nor did we find a broad enough cross-section of data to attempt an extrapolation.

Still hoping to get what we needed from marketing industry leaders, we turned to the public databases on eternal business tracking publications like Bloomberg, ZoomInfo, Hoovers, Owler, CrunchBase, and Manta among others. We hoped that those sources would reveal the CLV and SMS acquisition costs for the electronic marketing companies listed above, or enough to build a global estimate, but this strategy did not pan out.

Next, we turned to the content publications of marketing industry leaders, sources like HubSpot, Disruptive Advertising, WebFX, Leads Bridge, and the like. While this did help us flesh out some existing data, we still did not find the missing values.

As a final strategy, we expanded our scope to articles and market analysis in reliable media publications like Forbes, the New York Times, the Wall Street Journal, the Financial Times, Business Insider, Fortune, Bloomberg, and their peers. Regrettably, the missing cost data could not be found from these sources either.

EMAIL MARKETING
Email marketing's customer acquisition cost is variable, ranging from an almost negligible in pennies up to about $3 per customer. The attrition rate (churn) is quite low for B2C emails, running at about 3.22 percent. It is noticeably higher for B2B emails, running about 21.07 percent. The average ROI on an email marketing campaign is 3,800 percent. Total email marketing spending in the United States was $2.07 billion in 2014 and is expected to rise to $3.07 billion in 2019.

Some interesting notes about email reading habits include: half of all marketing emails are opened on a mobile phone. That emails read at 11 a.m. Eastern Standard Time have the highest clickthrough rate. And that emails sent on Tuesdays have the highest open rate.

SMS MARKETING
The churn rate for SMS marketing platforms runs about 37 per every thousand messages sent. However, this varies based on day, hovering closer to 18 per thousand on weekdays and 85 per thousand on weekends.

Marketing companies are extremely satisfied with SMS marketing in general, with 96 percent rating the campaigns either "effective" or "very effective." Marketers note that SMS is especially effective when coordinated with other channels.

SMS MARKETING VS. EMAIL MARKETING:
SMS beats email marketing hands-down on open rate, running at around 98 percent versus to email’s 20 percent open rate. The response rate is also higher for SMS marketing, running 45 percent to email's 6 percent. Clickthroughs on SMS are also higher, running around 36 percent to email's 3.4 percent.

An average SMS recipient takes 90 seconds to respond to a marketing message, as opposed to 90 minutes for the average email response time.

SMS MARKETING STRATEGIES
We found several recommendations for improving SMS marketing campaigns. Send a "welcome" message as each new customer subscribes. Focus pushes on new offers or engaging content. If there are webinars, demos, or scheduled appointments, reminders are often well-received. Download links to electronic tickets, apps, etc are also highly engaging. A final recommendation would be to maintain a responsive customer support presence for your SMS marketing campaign.

CONCLUSION
SMS marketing is certainly faster, more responsive and more engaging than email marketing strategies, however, emails have surprisingly low churn. We were not able to acquire a reasonable estimate of the cost per customer for SMS marketing. We were also unable to find the CLV for either marketing channel. We speculate that this may be because the lifetime value of acquired customers will vary wildly from industry to industry, product to product, making a generalized CLV for a given marketing channel, absent specific industry and profit data, a stat too broad to be useful.