How to calculate SMS marketing ROI (and optimize campaign performance)

SMS marketing gets results. 98% of text messages get opened, and most people read them within minutes. But high open rates don’t automatically translate to revenue.

If you’re running SMS campaigns, you need to prove they’re worth the investment. The potential is there—Forbes found that businesses typically see $71 in return for every dollar spent on SMS marketing. But you need to measure whether your specific campaigns are hitting those numbers.

This guide shows you how to calculate your actual SMS marketing ROI, which metrics matter most, and five strategies that can help you get better returns from your text campaigns.

How to calculate SMS marketing ROI

SMS marketing ROI shows you how much revenue your text campaigns generate compared to what you spend on them. The calculation is simple:

Here’s how it works: subtract your campaign costs from the revenue it generated, divide that number by your total costs, then multiply by 100 to get a percentage.

To use this SMS marketing ROI formula effectively, you need to know what goes into your campaign costs:

• Message costs: SMS marketing typically costs $0.02 to $0.08 per message, according to Textellet. Your actual rate depends on which countries you’re texting, your message volume, and whether you’re sending promotional or transactional messages.
• Platform fees: Most SMS platforms charge either monthly subscription fees or per-message rates on top of the basic messaging costs.
• Staff time: Someone has to plan campaigns, write copy, and analyze results—factor in the hourly cost of whoever handles these tasks.
• Compliance costs: Managing opt-ins, opt-outs, and data security takes time and sometimes requires additional tools or legal review.

Once you have a clear picture of everything that goes into your SMS marketing campaigns, you can calculate a realistic ROI for your SMS campaigns.

Here’s an example: Let’s say you run an online sticker business and send a 24-hour flash sale text to your customers.

Campaign costs:

• 5,000 SMS messages at $0.05 each = $250
• Platform fee = $50/month
• Staff time (writing, sending, analyzing) = $900
• Total cost = $1,200

The campaign generates $7,000 in sales tracked through your SMS links.

A 483% ROI shows SMS is working for your business. But ROI is just one piece of the puzzle—you also need to track how SMS affects your other business goals.

Key SMS metrics to track for every campaign

To understand and improve your ROI, track these SMS marketing metrics for each campaign:

Opt-in/opt-out rate: How many people join your list versus how many leave. High opt-out rates usually mean your content isn’t relevant to your audience.

Open rate: Most SMS messages get opened, but tracking this helps you spot any delivery issues or compare performance across campaigns.

Conversion rate: SimpleTexting reports that SMS conversion rates typically range from 35% to 45%, though this varies by industry. Track yours to see how you compare.

Click-through rate (CTR): If your messages include links, measure how many people click them. Branded links can boost CTR by up to 39% compared to generic short links.

Revenue per message: Total revenue divided by messages sent. This shows you how much each text is worth to your business.

Cost per acquisition (CPA): Campaign cost divided by number of conversions. This helps you compare SMS performance against your other marketing channels.

Analytics tools and attribution techniques

To track SMS ROI accurately, you need the proper measurement setup. The most effective approach is using branded links with UTM parameters—unique tags that let you trace exactly which SMS campaigns drive conversions.

UTM parameters work by tagging each link with campaign-specific information. When someone clicks and converts, you can see exactly which text message led to that sale or signup.

For a complete picture, consider multi-touch attribution. This shows you how SMS works with your other marketing channels like email, social media, or paid ads. You might find that people see your SMS, visit your website, then convert after getting an email—understanding these patterns helps you allocate budget more effectively.

Understanding your company’s SMS marketing ROI

Knowing what other businesses achieve with SMS helps you set realistic goals and identify improvement opportunities.

According to Klaviyo’s 2025 Benchmark Report, SMS marketing generates an average of $0.11 in revenue per recipient, slightly ahead of email at $0.10. But the top 10% of SMS campaigns earn $0.81 per recipient—seven times the average.

Industry matters too. Klaviyo found that apparel, health and beauty, jewelry, and toys typically see higher revenue per recipient than other sectors.

These benchmarks give you targets to work toward, but several factors affect whether you’ll hit them. Understanding what drives SMS ROI helps you build more effective campaigns.

You need a clear picture of SMS marketing ROI across different industries and in relation to other standard marketing channels to help your team understand what’s achievable for your campaigns.

Factors that positively impact SMS marketing ROI

• List quality: Only text people who opted in. Sending messages without permission gets you marked as spam and hurts your sender reputation.
• Segmentation: Target messages based on customer behavior, purchase history, or demographics. Relevant messages get better engagement and higher conversion rates.
• Personalization: Use customer names and reference their specific interests or past purchases. Personal messages feel less like marketing and more like helpful communication.
• Timing: Find the best time to send SMS marketing to your audience based on their needs and specific geolocation.
• Branded links: Use custom short links with your domain name instead of generic ones. Branded links look more trustworthy, avoid spam filters, and can boost click-through rates by 39%.

Factors that negatively impact SMS marketing ROI

• Over-messaging: Send too many texts, and people will unsubscribe or mark you as spam. Find the right frequency for your audience.
• Generic content and links: Messages that feel mass-produced get ignored. Generic short links look suspicious and hurt deliverability.
• Poor compliance: Skipping proper opt-ins or ignoring regulations can result in fines and damage your reputation.
• Weak calls-to-action: If people don’t know what you want them to do, they won’t do it. Make your next step clear and compelling.

Now let’s look at specific strategies to maximize your SMS marketing returns.

5 ways to maximize SMS marketing ROI

1. Build quality lists

Get explicit consent before adding anyone to your SMS list. Use website popups, checkout forms, or in-person signups to collect phone numbers from people who actually want to hear from you.

Clean your list regularly—remove people who haven’t engaged and numbers that bounce back. Always include an unsubscribe option in your messages. This might seem counterproductive, but easy opt-outs reduce spam complaints and build trust.

2. Optimize send times

When you send matters as much as what you send, track when your audience clicks and converts to find your best-performing time slots. Tools like Rebrandly show you exactly when people click your SMS links, making it easy to identify peak engagement windows.

3. Use intelligent automation

Set up automated message flows for common scenarios like new customer welcome series, abandoned cart reminders, or post-purchase follow-ups. This keeps you connected with customers without manual work.

Don’t forget milestone messages—birthday offers or anniversary rewards feel personal and drive strong engagement.

4. Use branded links

Replace generic short links with branded ones using your own domain. Branded links look more trustworthy, avoid spam filters, and boost click-through rates by 39% compared to generic shorteners. They also give you better tracking data to measure campaign performance.

5. Test and iterate

Run A/B tests on your message copy, timing, and calls-to-action to see what works best. Watch your opt-out rates—if they spike, you might be messaging too frequently. Use your results to refine future campaigns. Minor improvements add up to significant ROI gains over time.

Maximize your SMS marketing ROI with branded links

SMS marketing can deliver exceptional ROI when done right. Track your actual returns, compare them against industry benchmarks, and use tools like branded links and automation to improve performance over time.

The most successful SMS programs treat texting as a strategic channel, not just another way to blast promotions. Focus on sending relevant, timely messages that respect your audience’s time and attention. This approach drives both immediate sales and long-term customer loyalty.

Ready to boost your ROI with branded links that generate higher clicks? Book a demo with our team.