Why your last text message is probably from a brand

First it was mailboxes, then inboxes…Now, marketers are blowing up phones.

It feels like just about every brand out there seems interested in customers’ phone numbers: Bloomingdale’s, Anthropologie, Victoria’s Secret, Lee, UGG. Even Outback Steakhouse has a texting program.

Marketers told us that the benefits go both ways—brands can build loyal followings and potentially boost traffic while offering consumers coupons and incentives, which could be why it appears to be on the rise.

U up (to chat with a brand)?

Eitan Reshef, CEO of Blue Wheel, told us that he highly recommends SMS marketing to many of the agency’s e-commerce clients, which have included brands like Grande Cosmetics and Caudalie. “It’s a way to facilitate loyalty, it helps improve your retention and your lifetime value of your customers. It is a fundamentally important channel in terms of the total marketing mix,” he said.

It also seems to be gaining popularity: Reshef said that Blue Wheel expects about 60% of brands to increase their SMS budgets in 2023.

Megan Trinidad, VP and executive creative director of product and experience at R/GA, told us that the way brands use SMS has evolved in recent years, led by newer, more “tech-led brands.”

“I think that the DTC brands, what they’ve done is sort of take it from a more transactional, functional part of your conversation—‘Your your thing has shipped,’ that sort of conversation—to something that feels a lot more like it’s a two-way dialogue,” she said.

In her time at R/GA, Trinidad said she’s worked with brands like Tonal and Mailchimp, both of which use SMS. While using text can help with building a brand voice and customer relationships, she said, marketers also need to be cognizant of frequency.

“With text messages, you need to be sparing with how much you’re bringing to the consumer because it can get annoying,” she said, adding that it’s easier to unsubscribe from a text than it is from an email list.

Jazlyn Patricio-Archer, head of brand at DTC food brand Fly by Jing, confirmed this—telling us that the unsubscribe rate on SMS is “much, much, much higher than email across the board.”

To keep things more tailored, she said her team tries to keep its SMS subscribers “as a more VIP community,” sending messages that are “a bit more spontaneous or feel a bit more special and targeted” to brand loyalists.

“I think we all went through the wave of accidentally joining a lot of SMS lists in response to a lot of really steep, first-time order discounting,” Patricio-Archer said. “But in some ways, I only want people on this list who actually really love the brand.”

According to Patricio-Archer, Fly by Jing does a push to SMS almost every time a product drops and offers text subscribers things like early access to its Black Friday sale. Broadly speaking, she said conversational messages—like sharing recipes with customers trying to decide what to have for dinner—have been the “most impactful.”

Stay awhile

Sometimes first-time discounts can lead to long-term subscribers. Sriya Karumanchi, director of marketing and communications at jewelry brand Catbird, told us that its welcome offer, which requires providing an email address and phone number, is more often redeemed by SMS than by email and that the brand’s overall unsubscribe rate on SMS is “fairly low.”

Karumanchi said subscribers can text Catbird for info on things like how to make a return or tips for styling a certain piece. Right now, she said, the brand is “still fairly conservative” on outreach but is looking at ways to reach customers who may want to hear from them more frequently.

“It’s not just about the welcome offer, which you could unsubscribe from right away,” she said. “It’s more about, ‘Who do I actually want to get time-sensitive news from, and what brands do I want to be folded into [my] brand community?’”

Last year, Catbird’s revenue growth on purchases made via SMS marketing grew by over 50% YoY. Given the success Catbird has seen with SMS, Karumanchi said the brand will continue to invest in and experiment with it.

For instance, it might try “experimenting with new offers for phone number opt-in [or] doing more conversational commerce or quizzes,” she explained. “We’re just kind of trying it all.”

As for whether we could hit peak saturation with SMS? According to R/GA’s Trinidad, there could be a future where texts become “the new inbox, where you’re just inundated and it’s no fun anymore.” However, she said while it’s largely dependent on where people shop, we don’t seem to be at that point…yet.