Why ROI measurement is critical
Most businesses sending SMS know it "works" — but don't know exactly how much. Without accurate measurement, you can't improve, can't justify budget, and can't tell which campaigns are worth repeating.
In this article we'll learn exactly how to measure the return on SMS campaigns, which metrics matter, and how to calculate ROI accurately.
Basic metrics
1. Delivery rate
Percentage of messages delivered successfully out of total sent.
• Industry average: 97–99%
• Target: over 98%
• A low rate indicates: invalid numbers, an old list, or provider issues
2. Open / read rate
In SMS, open rate is almost always 95–98%. The difference is read time — most messages are read within 3 minutes.
3. Click rate (CTR)
Percentage of recipients who clicked a link in the message.
• Industry average: 8–12%
• Target: over 10%
• Important: use shortened links with tracking (UTM parameters)
4. Conversion rate
Percentage of recipients who completed the desired action (purchase, signup, booking).
• Average: 5–8% (depends on industry)
• Fashion/retail: 8–15%
• Services: 3–6%
5. Opt-out rate
Percentage of recipients who asked to be removed.
• Healthy: under 2%
• Concerning: over 5% (sign of too-high frequency or irrelevant content)
ROI calculation — the formula
Basic formula
ROI = (Campaign revenue − Campaign cost) / Campaign cost × 100
Practical example
Online store sent SMS to 5,000 customers:
• SMS cost: 5,000 × ₪0.06 = ₪300
• Click rate: 10% = 500 customers
• Conversion rate: 8% of clicks = 40 purchases
• Average order value: ₪250
• Revenue: 40 × ₪250 = ₪10,000
• ROI: (₪10,000 − ₪300) / ₪300 × 100 = 3,233%
Advanced metrics
Customer Lifetime Value (CLV) from SMS
Don't just measure the first purchase. A customer who came via SMS and came back 5 times is worth far more than a single purchase.
Customer Acquisition Cost (CAC)
Total campaign cost divided by the number of new customers acquired through them. Typical SMS: ₪5–15 per new customer.
Influenced revenue
Not everyone who reads an SMS buys immediately. Some buy days later, some in the physical store. Measure indirect revenue too.
Retention rate
Customers who get SMS stay loyal 25% longer than those who don't.
Measurement tools
• UTM parameters: add UTM tags to every link in SMS for tracking in Google Analytics
• Unique coupons: unique coupon code per campaign for redemption-rate measurement
• Landing pages: dedicated landing page per campaign
• Built-in analytics: your SMS platform should provide a dashboard with every metric
Common measurement mistakes
• Measuring sends instead of deliveries: only delivered messages are relevant
• Ignoring indirect impact: SMS also influences purchases that didn't happen through the link
• No A/B testing: without testing variants, you can't improve
• One-time ROI measurement: measure every campaign and compare over time
Benchmarks by industry
• Retail: average ROI 2,500%, CTR 12%, conversion 10%
• Restaurants: average ROI 3,000%, redemption rate 18%
• Healthcare: average ROI 1,800% (mostly from reducing no-shows)
• Real estate: average ROI 5,000%+ (one transaction pays back the year's investment)
• SaaS: average ROI 1,500%, retention improvement 15–25%
Manage analytics with Vibrate
Vibrate provides a comprehensive analytics dashboard: real-time delivery rates, click tracking, automatic ROI calculation, and detailed reports per campaign. Sign up free and start measuring and improving.
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