How to Track ROI from SMS Abandoned Cart Recovery Campaigns in Dropshipping

In the ever-competitive world of dropshipping, where margins can be tight and customer attention fleeting, every opportunity to recover abandoned carts is precious. Abandoned cart recovery strategies, such as email campaigns, push notifications, and SMS, are essential tools to re-engage customers who have left items in their carts without completing a purchase. Among these, SMS marketing has shown particular promise due to its high open rates and immediate attention-grabbing nature.

However, the effectiveness of any marketing campaign needs to be measured---especially when it comes to tracking Return on Investment (ROI). Understanding how well your SMS abandoned cart recovery campaigns are performing in terms of revenue generation is critical for optimizing your strategy. In this actionable guide, we'll explore how to effectively track ROI from SMS abandoned cart recovery campaigns in dropshipping.

Understanding ROI in SMS Abandoned Cart Recovery Campaigns

Before diving into the process of tracking ROI, it's important to understand what ROI is and why it matters.

ROI (Return on Investment) is a metric that helps businesses evaluate the effectiveness of their marketing efforts. In the case of an SMS abandoned cart recovery campaign, it refers to the amount of revenue generated from the campaign relative to the money spent on running it. Simply put, it tells you whether your investment in SMS marketing is paying off in terms of recovered sales.

To calculate ROI, you need to compare the revenue earned from the recovered carts to the costs associated with running the SMS campaign.

The formula for ROI is:

The goal is to maximize the revenue recovered from abandoned carts while keeping the costs of your SMS campaign reasonable.

Setting Up Your SMS Abandoned Cart Recovery Campaign

Before you can track the ROI of your SMS campaign, you need to set up a structured and effective SMS marketing campaign for abandoned cart recovery. Here's how to do it:

A. Integrate SMS Software with Your Ecommerce Platform

Most ecommerce platforms, like Shopify or WooCommerce, support SMS marketing integrations. You'll need to choose an SMS marketing provider (e.g., Klaviyo, SMSBump, Postscript, or Omnisend) and connect it with your dropshipping store.

Once integrated, your SMS software can automatically send messages to customers who have abandoned their carts. Make sure your integration allows for personalization, automated workflows, and detailed reporting, as these features will be crucial for measuring ROI.

B. Craft Effective SMS Messages

The content of your SMS messages plays a pivotal role in recovering abandoned carts. Here are some best practices:

• Personalization: Use the customer's name and refer to the specific items left in the cart to increase relevance and engagement.
• Urgency: Include a sense of urgency by offering a time-limited discount or reminding the customer that their items are running out of stock.
• Clear CTA: A clear call-to-action (CTA) should guide the customer directly back to their cart to complete the purchase.
• Concise Messaging: SMS messages have a character limit, so ensure the message is short, clear, and to the point.

Example SMS:

C. Timing Is Key

The timing of your SMS messages matters greatly. Studies show that the best time to send SMS abandoned cart recovery messages is within 30 minutes to an hour after the cart is abandoned. You can set up an automated workflow to trigger an SMS message within this timeframe.

Consider sending a follow-up message as well, maybe a day later, to give customers a second chance to complete the purchase.

Tracking Key Metrics to Measure ROI

To accurately track the ROI of your SMS abandoned cart recovery campaigns, you'll need to focus on a set of key metrics that will provide the insights necessary to calculate ROI.

A. Revenue Generated from Abandoned Cart Recoveries

This is the most straightforward metric when tracking ROI. You need to determine the total revenue generated by customers who clicked through your SMS message and completed their purchase.

Most SMS marketing platforms allow you to track how many recipients clicked on the link in your SMS, but you will also need to integrate this data with your ecommerce platform to track completed transactions. Look for the following:

• Conversions from SMS: How many abandoned carts were recovered due to the SMS message?
• Average Order Value (AOV): What is the average revenue per recovered cart?

B. Cost of Running SMS Campaigns

To calculate ROI accurately, you also need to track the costs associated with running your SMS campaign. The expenses may include:

• Subscription costs: Most SMS platforms have tiered pricing based on the number of messages sent. Be sure to factor in these costs.
• SMS costs per message: Depending on the platform and volume of messages sent, SMS costs can vary.
• Discounts and incentives: If you're offering a discount in the SMS message, include the cost of those discounts as part of the campaign's expenses.

C. Delivery Rate

The delivery rate refers to the percentage of SMS messages that were successfully delivered to customers. While SMS has a high open rate, if your messages are not reaching your audience, it could impact your ROI. Keep track of:

• Delivery rate: The percentage of messages delivered out of those sent.
• Bounce rate: The rate at which messages fail to be delivered due to incorrect or invalid phone numbers.

D. Click-Through Rate (CTR)

The click-through rate measures how many recipients clicked on the link within the SMS message. A higher CTR generally indicates that your message was compelling and that customers are interested in recovering their cart. Track this metric to gauge the effectiveness of your messaging.

E. Conversion Rate

The conversion rate is the percentage of people who not only clicked through the SMS but also completed the purchase. This is critical to understanding how well your campaign is converting interest into actual sales.

Formula for Conversion Rate:

A high conversion rate indicates that your SMS message, timing, and offer are resonating well with customers.

Analyzing and Calculating ROI

Once you have collected all the relevant data (revenue, costs, CTR, conversion rates, etc.), you can proceed with calculating the ROI of your SMS abandoned cart recovery campaign.

Using the formula for ROI:

For example, if your SMS campaign generated $5,000 in sales and the total cost of running the campaign was $1,000 (including SMS platform costs, discount costs, and other expenses), the ROI would be:

A 400% ROI means that for every dollar you spent on the campaign, you made $4 in return. Ideally, you want this number to be as high as possible, but even a moderate ROI can justify the continued use of SMS for abandoned cart recovery.

Optimizing SMS Abandoned Cart Campaigns for Better ROI

After tracking and calculating your ROI, it's important to optimize your campaigns based on the data you've collected. Here are some strategies for improving ROI:

• A/B Test SMS Content: Try different variations of your SMS messages to see which ones resonate best with your audience. Test different offers, CTAs, and tones of voice.
• Segment Your Audience: Segment customers based on behavior, purchase history, or demographics to send more targeted SMS messages. Personalized messages typically yield higher engagement and conversion rates.
• Optimize Timing: Experiment with the timing of your SMS campaigns. If you find that customers are more likely to engage with messages sent at specific times, adjust your workflow accordingly.
• Use Retargeting: If customers don't complete their purchase after receiving the first SMS, consider sending a second message after a day or two with an even better offer to encourage conversion.

Conclusion

Tracking ROI from SMS abandoned cart recovery campaigns is essential for evaluating the success of your marketing efforts in dropshipping. By carefully measuring key metrics, such as revenue generated, conversion rates, and SMS campaign costs, you can gain valuable insights into how well your campaigns are performing. This information not only helps you understand the financial effectiveness of your efforts but also guides your optimization strategies to improve results over time.

As SMS continues to be an effective tool for recovering abandoned carts, focusing on ROI tracking will ensure that your campaigns are efficient, cost-effective, and ultimately profitable.

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