SMS Marketing ROI Calculator

The maths behind it

SMS return is contribution generated less the per-message cost and the subscriber acquisition cost. Unlike email, the marginal cost of a send is not near zero.

Cost = messages sent × cost per message, commonly $0.01 to $0.03 domestically, with multimedia messages costing several times more.

That per-message cost changes the whole calculus: SMS cannot be sent to a disengaged list at no cost the way email can.

Putting numbers to it

A 3,000-subscriber SMS list at $0.015 a message costs $45 per send. At a 98% delivery rate, a 19% click rate and 12% of clicks converting, that is 67 orders, $3,886 of revenue and $2,137 of contribution.

Return on the send is enormous, which is why the channel is attractive. But at 12,000 subscribers and eight sends a month the message cost alone is $1,440.

Compare against email on the same list: 12,000 subscribers, near-zero send cost, and $765 of contribution per campaign.

SMS produces far more per subscriber and far fewer subscribers, because consent is harder to obtain and the list is correspondingly smaller and more engaged.

Where it is unreliable

Response rates on SMS are dramatically higher than email and decline faster with frequency. A channel producing a 19% click rate at two sends a month will not sustain it at eight.

Consent requirements are also stricter and the penalties for getting them wrong are severe, regulations in several jurisdictions carry statutory damages per message, which makes a compliance failure a business-ending event rather than a fine.

How to act on this

Treat SMS as a low-frequency, high-intent channel: order updates, restock alerts, genuinely time-limited offers. Using it at email frequency destroys the response rate that makes it valuable.

Then get the consent mechanics reviewed properly before launching. This is one of the few marketing channels where the legal exposure exceeds the commercial upside if handled carelessly.

Where SMS earns its place alongside email

The channels suit different jobs. Email carries content, explanation and browsing; SMS carries urgency and short, single-action messages that need to be seen within minutes.

A business using SMS for the messages that genuinely need immediacy: a delivery arriving, a restock on a waitlisted item, the final hours of a sale, and email for everything else gets the response rate SMS is capable of.

One using SMS as a second email list gets a high cost per send, a rapidly declining response rate and an elevated opt-out rate, and concludes the channel does not work. The channel is fine; the frequency was borrowed from a channel with different economics.

Quiet hours restrictions apply in most jurisdictions and are enforced, so a send schedule has to account for the recipient's local time rather than the sender's.

Automated sends that fire on an order event rather than a schedule need the same guard, since a shipping notification at three in the morning generates opt-outs and complaints.

Keeping messages short enough to avoid segmenting into multiple parts controls the cost directly, since a message over the character limit is billed as two.