Loyalty glossary · 10. Marketing and engagement (20)
Sms Marketing
Sms Marketing is the use of text messages to deliver offers, alerts, and transactional updates to opted-in members, and the channel's real value is its immediacy, not its reach.
Sms marketing is the first channel loyalty managers ruin because it feels free and immediate. A text interrupts a member's day, and that interruption must be repaid with usefulness. Treat it as a high priority alert channel, not as a broadcast list. The programmes that get this right send fewer messages and see lower opt-out.
Send 1 text per month to each of 100,000. At 1 cent per message, the annual cost is 12,000 dollars. If that cadence causes a 1 percent drop in the active member rate, the revenue loss at 50 dollars per member is 50,000 dollars. The cheap channel just became the expensive one.
Activity-based qualification should decide who gets a text. A message triggered by a stay, a tier change, or a points accrual has context. A message sent because it is Tuesday does not. The first reduces opt-out and raises engagement. The second trains members to ignore the channel.
Every opt-out is a permanent loss of a direct channel, and most programmes do not track it as a cost. A 5 percent opt-out rate on a campaign costs the programme 5,000 future contacts. Reaching those same people again through paid channels at 2 dollars per person means an extra 10,000 dollars in acquisition spend. That is money spent to make the next campaign smaller.
The only defensible SMS strategy is transactional first. Send a tier confirmation, a points expiry warning, or a stay reminder. Do not send a monthly newsletter by text. Members who want marketing email have already given an email address. Text is for the moments when a ten minute delay changes the outcome.