Text Message Marketing SMS Analytics and Performance Metrics 2 — Questions and Answers
Question 1: What does 'subscriber lifetime value' (LTV) represent in SMS marketing?
- The total revenue a subscriber generates over their entire time on your SMS list (Correct answer)
- The average number of messages a subscriber receives before opting out
- The cost to acquire and retain one SMS subscriber
- The total messages sent to a subscriber since opt-in
Correct answer: The total revenue a subscriber generates over their entire time on your SMS list
Subscriber LTV estimates the total revenue a subscriber is expected to generate from the time they opt in until they opt out, helping justify subscriber acquisition costs.
Question 2: What is 'list growth rate' and why is it an important SMS KPI?
- The net percentage increase in subscribers over a period, showing whether the program is growing (Correct answer)
- The speed at which the platform adds new subscribers to the send queue
- The ratio of mobile users to desktop users on your website
- The number of opt-ins generated per dollar spent on advertising
Correct answer: The net percentage increase in subscribers over a period, showing whether the program is growing
List growth rate measures net subscriber growth (opt-ins minus opt-outs) as a percentage of list size, indicating whether your SMS program is gaining momentum or shrinking over time.
Question 3: What does a high 'undelivered message' rate typically indicate?
- Poor list quality with many invalid, ported, or landline numbers (Correct answer)
- The SMS platform is experiencing server downtime
- Messages are too long and being rejected by carriers
- Subscribers have their phones on Do Not Disturb
Correct answer: Poor list quality with many invalid, ported, or landline numbers
High undelivered rates usually point to list quality issues, including disconnected numbers, landlines that cannot receive SMS, or numbers that have been ported away from their original carrier.
Question 4: What is 'campaign ROI' and how is it calculated for SMS marketing?
- (Revenue from campaign minus campaign cost) divided by campaign cost, expressed as a percentage (Correct answer)
- Total messages sent divided by total revenue generated
- Number of conversions divided by total opt-ins
- Cost per message multiplied by total subscribers
Correct answer: (Revenue from campaign minus campaign cost) divided by campaign cost, expressed as a percentage
SMS campaign ROI is calculated as (revenue generated − campaign cost) ÷ campaign cost × 100, giving a percentage that shows the financial return on each dollar invested in the campaign.
Question 5: What is 'response rate' in two-way SMS marketing analytics?
- The percentage of message recipients who sent a reply to the message (Correct answer)
- The speed at which the platform sends automated replies
- The percentage of messages that avoided spam filters
- The ratio of inbound to outbound messages in total platform history
Correct answer: The percentage of message recipients who sent a reply to the message
Response rate measures the percentage of recipients who actively replied to a two-way SMS conversation or interactive campaign, indicating strong engagement and relevance.
Question 6: Why should SMS marketers track 'cost per acquisition' (CPA) alongside conversion metrics?
- To determine how much revenue is needed per conversion to make the campaign profitable (Correct answer)
- To calculate the number of messages needed to fill a subscriber's inbox
- To measure how many STOP replies were received per campaign
- To track the percentage of messages delivered in under one second
Correct answer: To determine how much revenue is needed per conversion to make the campaign profitable
CPA reveals how much the brand spent to acquire each converting customer through SMS, allowing marketers to evaluate campaign efficiency and compare it against average order value or LTV.
Text Message Marketing SMS Analytics and Performance Metrics 2
What does 'subscriber lifetime value' (LTV) represent in SMS marketing?