Does an SMS campaign pay off? Working out cost, response and break-even

The short answer: a campaign pays off when the margin on the sales it brought in is greater than what it cost. You work out the cost before sending (credits × price per SMS at your tier); you measure the margin afterwards, with a code or a link of its own. The number that tells you whether it is worth it is the break-even point: how many sales you need to pay for the campaign.

1. The cost, before you send

Credits = numbers on the list × parts in the message. Cost = credits × price per SMS at your purchase tier. The SMS Center shows the credits before you confirm, and the price tiers are on the SMS page.

List	Parts	Credits
2,000 numbers	1	2,000
2,000 numbers	2	4,000
5,000 numbers	1	5,000

Add what the campaign gives away: the discount, the gift, the free coffee. A "20% off everything" campaign costs the credits plus 20% of every sale it brings in.

2. The break-even point

Sales needed to cover the campaign = campaign cost ÷ margin on one sale. The margin is what is left from a sale after paying for the product and the discount.

An example without prices: if the campaign costs the same as the margin on 10 sales, you need 10 sales to break even. On a list of 2,000 numbers, that is 1 response in every 200 (0.5%). If experience tells you that you usually get more than that, the campaign pays off; if you are unsure, test on a small group first.

3. The result, afterwards

1	Count the campaign's sales with a code of its own, a UTM link or a dedicated page. See how to measure a campaign.

2	Add up the margin on those sales.

3	Return = margin − cost. If it is positive, the campaign paid for itself and made a profit.

4	Log it in a spreadsheet, to compare campaigns, groups and offers over time.

What the maths misses

Effect	Why it matters
Customers who come back	A customer won back by a campaign may keep buying for months. The real value is more than the first sale.
Sales without a code	Some customers come because of the SMS and forget to show it. What you measure is the minimum.
Opt-out requests	A campaign that sells but drives lots of people off the list spoils the next ones.

Cut the cost before you give up. A 1-part message instead of 2 halves the credits; a well-chosen group instead of the whole list cuts even more. See rewriting messages and segmenting with groups.

Do not measure only the first day. Count responses until the offer ends. And compare like with like: a Christmas promotion and a February one are not comparable.

Done the maths? See SMS Marketing and the price tiers.

See the SMS Marketing page

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