How to Calculate SMS Marketing ROI

ROI (Return on Investment) evaluates the profitability of your campaigns over time. In SMS marketing, you determine ROI by comparing your net gains against your total spending. The basic formula is:

ROI (%) = (Net Profit ÷ Total Investment) × 100
  • Total Investment: Sum of all SMS-related expenses (message fees, CPC, CPL, etc.).
  • Net Profit: Revenue generated directly from the SMS campaign minus those costs.

1. Example: Overall SMS ROI

Suppose you send 3,000 texts in a month at $0.049 each:

Total Investment = 0.049 USD/message × 3,000 messages = 147 USD

If those messages generate $1,000 in profit:

ROI = (1,000 USD ÷ 147 USD) × 100 ≈ 680.27%

So your monthly SMS ROI is about 680%.

2. Calculating Cost Per Click (CPC)

When your SMS includes a link, each click adds to your campaign spend. Calculate CPC as:

CPC = Total SMS Campaign Cost ÷ Number of Clicks

Example

  • Campaign cost: $49
  • Clicks received: 30
CPC = 49 USD ÷ 30 clicks ≈ 1.63 USD/click

Include this CPC in your total investment for an accurate ROI.

3. Determining SMS Conversion Rate

This metric shows the percentage of recipients who complete your desired action (e.g., purchase, signup). Use:

Conversion Rate (%) = (Number of Conversions ÷ Delivered Messages) × 100

Example

  • Messages delivered: 900
  • Conversions: 50
Conversion Rate = (50 ÷ 900) × 100 ≈ 5.56%

Higher conversion rates boost your net profit and ROI.

4. Measuring Cost Per Lead (CPL)

CPL tells you how much each potential customer costs to acquire. Compute it as:

CPL = Total Lead-Gen Spend ÷ Number of Leads

Example

  • Lead-gen spend: $300
  • Leads generated: 30
CPL = 300 USD ÷ 30 leads = 10 USD/lead

Add CPL to your investment total when calculating the ROI of lead-focused SMS campaigns.