Text Marketing Programs: Data-Proven Payback
Multi-year study confirms substantial text program ROI across 40+ brands.
The most common question we hear from brands who have not yet launched a text marketing channel is, “Does pay off?”
To know for sure, we went far beyond anecdotal evidence and, instead, analyzed more than three years of text message marketing campaign data from 500 million-plus transactions at more than 40 foodservice brands.
We used this wealth of transactional data to determine the value of the average text program subscriber, calculating their average economic value to the 40 foodservice brands within the first six months of subscribing.
The results? Nothing short of astonishing.
The average text messaging program subscriber spent substantially more than nonsubscribers. Text program subscribers spent an incremental $1215 more on average than non-subscribing customers over those first six months after joining the program.
Of course, that’s the average, and results may vary, for various reasons. For instance, the average subscriber value will naturally differ from one brand to another because the average guest order amounts and store-visit frequency differ significantly from one brand to another.
Even so, every single brand included in the benchmark study enjoyed a high level of spend generation, from a low of $5.37 to a high of $16.59 in average incremental spend per subscriber.
And once you've got 'em, you've got 'em.
While the measurements in our research were contained to those first six months of each customer’s subscription period, those results are likely to continue well beyond six months since text messaging subscriber rates remain high over time (on average still at 90 percent after two years).
Consequently, brands can reasonably expect to maintain strong relationships with their text program subscribing guests over time. This means that the lifetime incremental spend value of every subscriber will actually be substantially greater over time than what we calculated during customers’ first six months in the program.
Beyond our own data, a study by research firm Localytics showed that text is the "stickiest" of digital marketing channels, holding firm (97%) over the initial three months of subscribing, while email fell by 40% over three months, and a business's app usage fell by 66% in that same timeframe.
That stickiness of text message program subscriptions means that your per-customer payoff continues to grow. The high economic value of each subscriber in the text message marketing program explains why many foodservice brands are expanding their marketing portfolio to include a text messaging program.
How to estimate incremental revenue and program payback for your brand's text subscribers
If you are considering launching a text message marketing program, you can estimate what an average subscriber would be worth to you in incremental revenue if you know your current average guest visit frequency over a six-month period and average guest check amount. In our 2021 Text Marketing Benchmark Report, we also detail how we measure program payback, incremental sales lift, details that you can use when doing a comparative analysis of your own brand’s sales lift potential.
With a finite budget, marketers must always be choosy when it comes to allocating their dollars. It is only reasonable to do so based on which marketing programs and channels are likely to produce the greatest return. One of the best ways to determine this for a text marketing program channel is to look at the Return on Marketing Spend (ROMS™). ROMS analysis lets you confirm that you are not only spending your marketing budget in an efficient way but, most importantly, in a measurable way, so you can leverage your data to optimize your spending.
But connecting digital marketing campaigns to actual in-store purchase data has been, until recently, a pipe dream since identifying ROMS requires an omnichannel “handshake” — a trackable transaction to figure out what channel each consumer traveled to make their purchase. Since Mobivity’s Trusted Redemption™ technology is able to do this, we can confidently include ROMS calculations of text message marketing in this benchmark report.
How text programs compare to other digital marketing channels
Text program campaigns proved to be a profitable channel: a solid investment for all the 40+ brands’ campaigns in the analysis, generating a sturdy average ROMS of 718%.
In other words, the brands invested in text message marketing cashed in with a remarkable seven dollars earned for every dollar spent from purchase redemptions driven by delivering personalized text message offers weekly.
In short, the data proves that text marketing is the new benchmark of success in digital marketing channels.
We encourage you to download the free Text Message Marketing Benchmarks report to get more on this and significantly more data points to help you determine the value of investing in a text message marketing program for your brand.