What Return on Investment from SMS Marketing Can You Expect as a Manager of a Hospitality Business?

Marketing 14 minute read 8th June 2022

The world of marketing revolves quickly, with innovations and bold new approaches coming and going with the changing of the seasons.

It is, therefore, something of a testament to the strength, versatility, and effectiveness of SMS marketing that it remains such a consistently viable option for those seeking to make an impact, not least in the hospitality industry.

After all, the hospitality industry relies on dynamism - short, sharp impacts that capture the desires of their target audience, and lead their potential customers right through the door.

By utilising SMS marketing and planning focused campaigns, savvy hospitality leaders can plant the right seeds at the right time, often producing highly satisfying results.

Following an unprecedented couple of years for hospitality as an overall industry, reigniting that spark of interest and letting customers know you’re open for business has never been more important.

Now, we’re taking a closer look at SMS marketing, and seeing why it may just be the approach your bottom line has been waiting for.

Why SMS Marketing Works for Hospitality

Since the arrival of SMS marketing as a tool some two decades ago, it has helped increase the reach of business managers of countless backgrounds and industries.

Within the hospitality industry, this approach has successfully allowed managers and marketers to maintain relationships with their clientele, reach out to new customer bases, and handle efficient promotional campaigns with relative ease.

Of course, the first questions on every marketing manager’s lips are obvious ones: what does it cost? What’s the likely return on investment? Is it worth the time and money, and how quickly will the ROI manifest?

There’s no surprise in this - a top-notch return is the proof in the pudding of a great marketing campaign, and with profit margins in the hospitality industry notoriously tight, nobody wants to shell out on a method which doesn’t yield a healthy profit.

So, why should your restaurant, cafe, or bar dive right into SMS marketing? The reasons are many and varied, but the following springs immediately to mind, based on equal measures of the well-researched and the blindingly obvious:

All of these factors point to a marketing approach that fits seamlessly within the hospitality industry, not least for the impressive ROI that’s associated with SMS campaigns.

ROI from SMS Marketing as a Hospitality Manager - smartphone usage

So, What’s the ROI of a Typical SMS Marketing Campaign?

It’s not always easy to calculate a typical ROI for text message campaigns, because so much depends on so many different factors.

The size of the messages, the inclusion of photo or video media, and the scale and reach of the campaign all influence the costs, and that’s before even considering the often vast gulf in difference between going rates for marketing platforms and PR firms.

However, it’s probably fair to say that an average-sized SMS marketing campaign, for restaurants and bars seeking good engagement within their wider community, should sit somewhere between the 400-500% mark - a healthy ROI, indeed!

ROI from SMS Marketing as a Hospitality Manager - ROI

This is even more so the case when an SMS campaign isn’t just aimed at raising awareness (for example, letting the community know a restaurant’s opening times, or that they’re still in operation following the pandemic etc), but is tied into a deal or offer.

Therein lies another aspect of the SMS marketing campaign’s ROI potential; the ability to instantly send out discount codes, free drinks vouchers, and Buy One Get One Free (BOGOF) deals directly to your customers’ smartphones.

It’s a tried and tested technique, and one which businesses just like yours around the world turn to on a regular and rewarding basis.

ROI from SMS Marketing as a Hospitality Manager - Engagement rates

How to Calculate the ROI of a SMS Campaign

Knowing how to quickly and accurately calculate ROI for a hospitality business is a key skill, and one which will help you stay on top of your SMS campaigns and other marketing efforts.

As with calculating the ROI of any aspect of your business and marketing, working out the return on investment for text marketing comes down to the following figures:

  • How much did it cost to run the campaign from start to finish? This will determine your investment.

  • How much money was directly made as a result of the campaign, for example from customers visiting your restaurant with a voucher or coupon on their smartphone. This determines the return.

Once the campaign has run its course, and the deadline on any coupons or vouchers including in the SMS campaign for your restaurant has expired, you’ll be able to sit down with these figures to determine the ROI of your restaurant marketing efforts. Here’s the simple equation you’ll need:

Return - Investment = ROI.

While the equation is almost ridiculously simple and your investment costs should be obvious, actually calculating the return that your campaign gave rise to can be a little more tricky.

If your restaurant SMS campaign was based, as mentioned previously, on the redemption of a voucher, then you just need to count how many vouchers were redeemed.

If, on the other hand, your text messages were more of a general reminder or invitation, it’s going to be harder to figure out just how well the messaging landed.

However, you should be able to compare profits or covers served with previous months, and track any changes in trends that the campaign contributed to.

What Results Can I Expect from SMS Marketing?

The chances are, the ROI laid out in this article has already sparked some ambitious marketing ideas that could help bring customers through your door, which can complement and dynamise any existing email or outreach strategies you already have in place.

We’re firm believers in taking an innovative approach to tech solutions for restaurants, bars, cafes and beyond, and gaining a deep understanding of how these approaches can boost business. With that in mind, let’s take a closer look at some of the other benefits text message marketing can bring.

SMS Marketing Can Boost Customer Relationships

In a post-pandemic hospitality industry, building and maintaining relationships with your customer base has never been more important. SMS marketing tools can allow you to send out birthday greetings, thank customers for visiting your establishment, and engage target groups by getting them to vote in polls, provide feedback on items they’d love to see on the menu, or keep them in the know about events and activations.

The public of 2022 want to feel they are part of a valued community, and will reward businesses that recognise their contributions - text message platforms for restaurants and bars can lay the foundations for long-term loyalty.

Increased Footfall

Great marketing more often than not comes down to brand awareness and recognition. By sending out special offers, promotional material and allowing for features like text message reservations, you’ll be boosting your brand awareness, while increasing the likelihood of your business being on your customers’ radar and in their diaries.

Better foot traffic leads to improved sales and profit margins, and a greater ROI from your text message campaigns and communications. What’s not to love?

Gain a Competitive Edge

SMS marketing for restaurants and bars is a great way of gaining a competitive edge, simply because it establishes a direct and personal line of communication between your business and your customers.

Your communications can be personalised to your heart’s content, and should always make an effort to be as tempting and as attention-grabbing as possible. The results, when applied with a bit of creativity and out-of-the-box thinking, can be hugely effective.

Great SMS Marketing ROI in 2022 Will Help Your Business Grow

Making the most of the marketing tools at your disposal (and applying them with focus and the right blend of logic, diligence and imagination) is more often than not a recipe for success.

By taking full advantage of SMS marketing, and capitalising on the fact that our smartphones have become everything from our internet browsers to our diaries, primary sources of communication, and window to the world around us - both locally and internationally - will help your business grow.

Indeed, paired with a creative and ever-evolving list of other marketing ideas to keep your business fresh in your target audience’s mind, SMS promotions can be a truly powerful aspect of your visibility on the local scene.

As we mentioned, the world of marketing turns rapidly. While fads and trends change with the tides, it very much seems that text message marketing continues to grow from strength to strength. Long may it continue!

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