SMS Marketing Pricing

When a business is evaluating launching an SMS marketing campaign, they sometimes get sticker-shock when looking at the monthly cost. Lets say you as a business owner think that you will have 500 mobile subscribers in your SMS campaign. Lets also say that you want to message those customers once per week. The math is done below.

Use this formula to calculate how many text messages you will be sending to your customer each month

That’s 2,000 messages per month! If you look at the monthly plans available at Tatango, this means you as a business owner will be paying $149/month. Seems like a good chunk of change huh? Not so if you do the math on what each redeeming customer will cost you.

What is a redeeming customer? A redeeming customer is someone that comes into your business to redeem the promotion you sent via text message. Well how the heck do you as a business owner calculate the cost per redeeming customer? It’s actually pretty easy.

In the formula below, use the following variables to calculate your cost per redeeming customer.

  • Cost per Message: If you look at the pricing plans at Tatango, you will see the per message cost is around $0.07
  • SMS Redemption Rate: This is relatively easy to calculate. To do this, divide the amount of customers that come into the store to redeem your text message promotion by the amount of subscribers you sent the text message promotion to.

Use this formula to calculate the cost per redeeming customer for your text messaging campaign

Not very good at math or just don’t want to wipe out your calculator? Don’t worry, I’ve done the math for you below at a cost per text message of $0.07. For a reference point, lets use one of our restaurant clients at Tatango (New York Pizza – See the case study below).

This client is experiencing up to a 10% SMS redemption rate on their SMS campaign. That means the cost per redeeming customer for New York Pizza is a mere seventy cents. To put it another way… This SMS campaign is only costing New York Pizza $0.70 per customer that comes into the restaurant. Doesn’t that sound better than $149/month? Sticker shock no longer an issue.

Use this chart to calculate the cost per customer of any text messaging campaign

Text message marketing case study for a restaurant in Bellingham called New York Pizza

Free Guide to Growing SMS Marketing Subscribers