SMS marketing ROI calculator

Calculating the business impact of sending messages can be a complicated task. Often the calculators on the internet are very simplistic and don’t include the service quality (delivery rate, alternative cost of undelivered messages) in the formula. These tools give you an inaccurate picture of the business impact and could lead to bad business decisions.

Our SMS ROI calculator accounts for all the key factors in business messaging operations to give you the best possible estimation.

The business impact is calculated using multiple calculations in a row. Here’s how it looks like:

1. Number of delivered messages = Expected monthly traffic * Message delivery rate
2. Number of undelivered messages = Expected monthly traffic - Delivered SMS
3. Number of opened messages = Delivered SMS * Open rate
4. Numer of conversions = Opened SMS * Expected conversion rate
5. Expected revenue = Delivered SMS * Average Transaction Value
6. Expected profit = Expected revenue * Average protift margin
7. Lost potential revenue = Number of undelivered messages * Open rate * Expected conversion rate * Average transaction value
8. Lost potential profit = Lost potential profit * Expected conversion
9. Alternative cost = Undelivered SMS * Alernative cost per undelivered message
10. Expected messaging cost = Expected monthly traffic * Price per message
11. Total cost = Expected messaging cost + Alternative cost for undelivered messages
12. ROI = (Expected profit - Total cost / Total cost) * 100

Based on different sources, including our own customers, the average conversion rate for SMS is around 29%. However, it could be as high as 45%. Compared to other marketing channels, the difference is massive:

3.26% for email marketing
3.17% for Google Ads
9.21% for Facebook ads