Co-founder at TxtCart | $50M+ revenue driven across 2500+ eCommerce brands via SMS marketing and conversational AI. Live in New York, D1 NHRA Champion, Penn State alum.
Cost of SMS Marketing: Is It Worth It or Just Another Expense?
SMS marketing is often praised for its high open rates and direct customer engagement, but is it really cost-effective, or just another line item draining your marketing budget? With pricing models, carrier fees, and automation costs to consider, understanding the true cost vs. ROI is crucial.
In this article, we’ll break down:
How SMS pricing models works
What factors impact costs
How to maximize SMS Marketing ROI
Let’s get started!
TL;DR
How much does SMS marketing cost?
SMS pricing varies based on message volume, pricing model, and additional fees.
Typical costs:
U.S. SMS: $0.01–$0.05 per message
International SMS: $0.25–$0.50 per message
MMS messages: 3x the cost of SMS
Pricing models include pay-as-you-go, subscription plans, tiered pricing, and performance-based pricing.
Key factors that affect SMS marketing costs
Message volume & frequency – Bulk discounts apply for high-volume senders.
Message type – MMS costs more than SMS
Phone number type – Short codes, long codes (10DLC), and toll-free numbers have different pricing and compliance costs.
Geographic considerations – International messaging costs significantly more than domestic.
Setup & onboarding fees – Some platforms charge one-time setup, training, or integration fees.
Compliance & regulatory costs – Managing opt-ins, legal fees, and data storage adds to expenses.
Advanced features & automation – Analytics, A/B testing, and API integrations may come with extra costs.
How to maximize ROI & cut SMS costs without hurting performance
Optimize your contact list – Remove unengaged subscribers and segment audiences effectively.
Time campaigns wisely – Research shows 3 PM and 6 PM have the highest engagement rates.
Keep messages short & impactful – Stay within 160 characters to avoid split messages and unnecessary costs.
Automate workflows – Use triggered messages to save time and boost conversions.
Test & refine campaigns – A/B testing different messages can improve performance.
Choose the right pricing model – Match your needs with the best plan (subscription, pay-as-you-go, or performance-based).
The cost of SMS marketing varies based on several factors, including message volume, pricing model, and additional carrier fees.
Below is a breakdown of typical SMS marketing costs:
SMS Message Type
Cost per SMS Text
SMS text (U.S.) sent
$0.01–$0.05
SMS text (International) sent
$0.25–$0.50
SMS text received
$0.01
Understanding SMS Marketing Pricing Models
Not all SMS marketing pricing models are created equal! Whether you’re a small business testing the waters or a large enterprise running high-volume campaigns, understanding how these models work can help maximize ROI while keeping costs in check.
Pricing Structure
Description
Best For
Pay-as-you-go
Businesses pay per message sent, offering flexibility without a fixed monthly fee.
Small businesses, seasonal campaigns, low-volume senders
Subscription-based
Monthly plans with a set number of SMS included. Additional messages may incur extra costs.
Businesses with consistent SMS marketing campaigns needs
Tiered pricing (volume-based)
Bulk discounts apply; the more messages sent, the lower the per-message cost.
High-volume senders, growing businesses
Credits or package-based pricing
Businesses buy credits upfront, which are deducted per SMS sent.
Companies looking for predictable spending
Custom/enterprise pricing
Tailored plans for large businesses with dedicated support, integrations, and compliance features.
Enterprises, large-scale marketing campaigns
Performance-based pricing
Businesses pay a percentage of the revenue generated from SMS marketing instead of paying per message.
Brands focused on ROI-driven SMS marketing
7 Major Factors That Affect How Much You Pay for SMS Marketing
SMS marketing costs aren’t one-size-fits-all. Several key factors determine how much you’ll actually spend and understanding them can help optimize your budget without sacrificing performance.
Let’s break it down.
1. Message volume and frequency – More messages, more savings?
Ever heard of bulk discounts?The more SMS messages you send, the lower the per-message cost. SMS providers offer tiered pricing, meaning high-volume senders get a lower rate per text.
However, that doesn’t mean you should blast texts without a strategy.
Low-volume senders pay standard per-message rates, typically $0.01–$0.05 per SMS.
High-volume businesses can negotiate better pricing to reduce costs. For example, sending 10,000+ messages per month often costs significantly less per SMS than sending just a few hundred.
Remember,customer segmentation is key—targeting the right audience ensures you’re not wasting money on disengaged contacts.
Bottom line?Sending more can save money, but only if you’re reaching the right audience!
2. Message type (SMS vs. MMS) – Which one saves you more?
Not all text messages cost the same. SMS (text-only) is budget-friendly, while MMS (multimedia messages) costs up to 3x more as itallows images, GIFs, and videos.
So, when should you use each?
Message Type
Cost per Message
Best For
SMS (Standard Texts)
$0.01–$0.05
Quick updates, promotions, reminders
MS (Multimedia Messages)
$0.03–$0.15
Product showcases, branding, visual content
💡Pro Tip: Want to maximize ROI? Use AI-assisted templates to craft short, high-converting SMS messages—saving money while keeping engagement high. Platforms like TxtCart help craft high-converting SMS messages using AI-powered templates, ensuring you get the best engagement without needing costly MMS messages.
3. Phone number types – Does your number affect costs?
Yes! The type of phone number you use directly impacts your SMS marketing costs and campaign reach. Choosing the right one can save money while ensuring compliance.
Better deliverability than standard long codes but may have carrier filtering for promotional messages.
💡Pro Tip: TxtCart makes short codes even more powerful by allowing you to create highly personalized SMS campaigns. With AI-driven automation, you can segment audiences, craft targeted messages, and boost engagement—all while using short codes for faster, large-scale outreach.
4. Geographic considerations – Does location affect SMS costs?
Absolutely! Where you send messages directly impacts pricing due to carrier fees and compliance rules. Sending texts domestically is usually cheaper and more predictable, while international messaging can be significantly more expensive.
Domestic SMS: Lower costs and fewer regulatory hurdles, making it a cost-effective option for local businesses.
International SMS: Expect higher per-message fees and regional carrier charges that vary widely by country.
5. Setup and onboarding fees – Are there hidden costs?
Getting started with SMS marketing isn’t always free. Some platforms charge one-time setup fees, while others include onboarding as part of their pricing.
Here’s what to watch for:
Platform setup costs: Some providers charge an upfront fee for account activation and compliance registration.
Training and implementation expenses: If your team needs training on an advanced SMS marketing platform, expect additional costs.
Integration with existing systems: Connecting your SMS platform with eCommerce stores (like Shopify) or CRM tools may require technical setup fees.
6. Compliance and regulatory fees
Regulatory compliance is crucial in SMS marketing, and failing to follow the rules can lead to hefty fines. You must account for compliance-related expenses to stay legally protected.
Opt-in/Opt-out management: Regulations like TCPA and GDPR require businesses to obtain clear consent and offer an easy way to unsubscribe.
Record-keeping costs: Companies must store consent logs and messaging history to prove compliance. Some SMS platforms offer this as a built-in feature, while others charge extra.
Legal consultation fees: Ensuring your SMS campaigns comply with regional laws may require legal guidance, especially for international messaging.
7. Advanced features & customizations – Do they increase costs?
Advanced SMS marketing features add value but also impact pricing. Depending on your provider, these tools might be included in your plan or come as premium add-ons.
Analytics & reporting: Some platforms charge extra for detailed campaign insights, while others include it in their base pricing.
A/B testing: Testing different messages and send times can improve conversions but may require additional messaging credits.
Automation workflows: While automation saves time and reduces manual effort, platforms may charge based on usage or workflow complexity.
P.S. All TxtCart pricing models include A/B testing, real-time analytics, and AI-powered automations, helping you optimize campaigns without extra fees 🚀
Average SMS Marketing Costs by Business Size
When comparing SMS pricing across different business sizes, you’ll find that rates can vary significantly. The cost per message tends to be higher for smaller businesses and lower for larger enterprises sending large volumes.
TxtCart offers competitive rates, ensuring cost-effectiveness for businesses of all sizes. Below is the breakdown of typical SMS costs along with TxtCart’s pricing:
Business Size
Estimated Contacts
Typical SMS Cost per Message
TxtCart’s Pricing
Small Businesses
Up to 500 – 2,000
$0.03 – $0.05
$0.02
Mid-Sized Businesses
2,000 – 50,000
$0.02 – $0.04
$0.01
Enterprises
50,000+
$0.01 – $0.03
$0.007
Essential Metrics to Track When Measuring SMS Marketing ROI
Sending SMS messages is easy—but are they actually working? To get the most out of your SMS marketing budget, you need to track the right metrics.
Below are the key SMS marketing metrics that tell you whether your efforts are paying off—or if it’s time to tweak your strategy.
Metric
What It Measures
Why It’s Important
Interaction Rate
How often recipients engage with SMS messages (e.g., replies, link clicks).
Shows how effective your messaging is in sparking customer engagement.
Delivery Rate
Percentage of messages successfully delivered to recipients.
Helps identify deliverability issues and carrier filtering problems.
Click-Through Rate (CTR)
Percentage of recipients who click a link in your SMS.
Indicates how compelling your message and CTA are.
Conversion Rate
Percentage of recipients who complete a desired action (e.g., purchase, signup).
Directly impacts ROI and revenue growth.
Cost per Acquisition (CPA)
The cost to acquire a new customer through SMS marketing.
Helps assess the efficiency of your SMS campaigns compared to other channels.
Customer Lifetime Value (CLV)
The total revenue a customer generates over their relationship with your brand.
Determines long-term profitability and the impact of retention strategies.
List Growth Rate
The rate at which your SMS subscriber list is expanding.
Ensures your marketing reach continues to grow and stay effective.
Opt-Out Rate
The percentage of recipients who unsubscribe from SMS campaigns.
High opt-out rates indicate message fatigue or poor targeting.
💡 Pro tip: Regularly analyze these metrics to ensure you’re not just sending messages but driving real business results. TxtCart’s advanced campaign & revenue analytics provide real-time insights into CTR, conversion rate, customer LTV, and more—allowing businesses to optimize their strategies effortlessly.
Want to know if your SMS marketing is actually profitable? ROI calculation is easier than you think.
Follow these steps to measure how much value your SMS campaigns are bringing in:
Determine total campaign revenue: Start by figuring out how much revenue your SMS campaign generated. This includes sales directly attributed to SMS messages, such as discount code redemptions, cart recoveries, or direct purchases from SMS links.
Calculate total campaign costs: Now, add up everything you spent on the campaign. This includes SMS sending costs, platform fees, compliance expenses, and any additional costs like automation or integrations.
Apply the ROI formula: Use this simple formula to calculate your SMS marketing ROI:
ROI = ((Total Revenue – Total Costs) / Total Costs) × 100
Analyze and optimize: Tracking key metrics like CTR, conversion rates, and opt-outs helps fine-tune your campaigns. Look for trends—are customers engaging? Are they converting? Adjust messaging, segment your audience better, and test different send times to improve performance.
The Hidden ROI Multiplier: Conversational SMS Marketing
Traditional SMS marketing platforms work like a one-way street—they send out promotions, reminders, or updates, and hope customers respond. But hope isn’t a strategy.
What if SMS could work like a real two-way conversation?
That’s exactly what conversational SMS marketing does. Instead of blasting messages into the void, it creates a dialogue—where customers can ask questions, get personalized recommendations, and even complete purchases through text. This shift from one-way messaging to interactive conversations isn’t just about convenience—it’s a game-changer for ROI.
Here’s why:
Higher Customer Lifetime Value (CLV) – Engaged customers are more likely to make repeat purchases and stay loyal to a brand.
Lower customer service costs – AI-powered SMS chats can cut customer service expenses by up to 32x by handling FAQs and automating responses.
Stronger ROI through personalization – When customers can reply and get instant answers, they’re more likely to follow through with purchases instead of abandoning their carts.
For example, Organi Grow Hair, a vegan and organic haircare brand, leveraged TxtCart’s 2-way human like conversational SMS to recover $25K monthly. The result? More than $1.2M in revenue and a 16.9x ROI—proving that conversational SMS isn’t just effective, it’s a profit-driving machine.
Organi Grow Hair, a vegan and organic haircare brand, used TxtCart’s 2-way SMS to recover $25K monthly, drive 42% reply rates, and deliver 9,500+ personalized campaign orders.
“TxtCart has really built something special and we’ve been a fan for over 3 years. The organic conversations pair so well with our organic products, providing additional revenue and customer satisfaction.”
9 Smart Ways to Cut SMS Marketing Costs Without Hurting Performance
Spending too much on SMS marketing? Cutting costs doesn’t mean cutting results. The key is to eliminate waste and optimize efficiency without sacrificing engagement.
Let’s explore how you can do this:
1. Stop paying for dead leads—Optimize your contact list
Why waste money sending texts to people who never engage? Cleaning up your list reduces costs and improves performance at the same time.
Remove unengaged subscribers – If someone hasn’t interacted with your texts in months, it’s time to let them go.
Segment audiences effectively – Not every customer should receive the same message. Group them by purchase behavior, location, or engagement history for better targeting.
Target only the most relevant customers – Prioritize high-intent subscribers who are more likely to engage and convert.
💡 Pro tip: Removing inactive subscribers is key to cutting costs, but manually filtering your list can be time-consuming. TxtCart’s smart segmentation automates this process by filtering out inactive subscribers and helping you target the right customers—maximizing impact while keeping messaging costs low.
2. Choose the right timing for campaigns
Timing is everything in SMS marketing. Even the most compelling message won’t drive results if it lands at the wrong time. Sending texts strategically ensures higher engagement, better conversion rates, and lower wasted costs.
Send during high-engagement hours – Messages sent when customers are most active (like lunchtime or early evening) get higher response rates.
Avoid message fatigue – Bombarding customers with too many texts leads to opt-outs and wasted spend. Find the right frequency to stay relevant without being annoying.
Consider subscriber timezones – A great offer won’t work if it wakes someone up at 3 AM. Scheduling messages based on local time keeps engagement high.
💡 Pro tip: Research shows that 3 PM and 6 PM are peak engagement times for SMS marketing. Manually timing messages can be tricky, but TxtCart’s SMS scheduler automates the process by ensuring each subscriber receives messages at the most effective time without extra effort.
When it comes to SMS marketing, less is more. Customers skim, not read, so keeping messages concise ensures they grab attention and drive action.
Stay within character limits – SMS messages are typically 160 characters. Going over can lead to split messages, increasing costs and reducing readability.
Use clear CTAs – Tell customers exactly what to do next. “Shop Now,” “Claim Your Discount,” or “Reply YES to Confirm”— a strong CTA boosts conversions.
4. Implement automated workflows – Save time, boost results
Manually sending every SMS? That’s a thing of the past. Automation makes SMS marketing faster, smarter, and more efficient—helping you engage customers at the right moment without extra effort.
Set up triggered messages – Send texts based on customer actions, like sign-ups, purchases, or inactivity. This keeps communication relevant without constant manual effort.
Reduce manual campaign management – Automation ensures consistent engagement while freeing up your team to focus on strategy, not scheduling texts.
Recover abandoned carts effortlessly – A well-timed SMS reminder nudges customers to complete their purchase, recapturing lost revenue on autopilot.
💡 Pro tip: Use behavior-based automations to reach the right customers at the right moment. For example, TxtCart’s one-click automation lets you build custom workflows, trigger messages based on behavior, and create powerful follow-ups—ensuring no sales opportunity is missed.
5. Test and optimize campaign performance – Fine-tune for better results
SMS marketing isn’t set it and forget it—testing and optimizing your campaigns helps you get the best results while keeping costs low. Small tweaks can lead to big improvements in engagement and conversions.
Run A/B tests on message content – Test different text variations, CTAs, and offers to see what resonates best with your audience.
Analyze conversion data – Trackclick-through rates, response rates,and sales to understand what’s working and what’s not.
Refine targeting based on results – Use data-driven insights to adjust segmentation, sending times, and messaging tone for better performance.
💡Pro tip: Test one element at a time—whether it’s message length, tone, or offer type. Changing too many factors at once makes it hard to pinpoint what’s actually driving results. TxtCart simplifies A/B testing by allowing you to experiment with different message variations, track real-time performance, and refine campaigns for maximum impact.
6. Choose the right pricing model – Spend smart, scale better
Text messages marketing costs can add up fast—but picking the right pricing plans helps maximize impact without overspending. The key? Choosing a plan that fits your business size, message volume, and growth goals.
Match your volume to the best pricing tier – Sending a handful of messages? A smaller plan works. Running high-volume campaigns? Bulk pricing can lower your per-message cost.
Evaluate pay-as-you-go vs. subscription plans – Pay-as-you-go offers flexibility but can be pricier in the long run. Subscriptions provide a predictable cost structure, ideal for businesses with steady SMS needs.
Consider performance-based pricing – Instead of paying per message, some platforms (like TxtCart) charge based on sales generated, making it a low-risk option for ROI-focused brands.
7. Make SMS a two-way conversation (Not just a broadcast)
Most brands treat text message marketing like a megaphone—blasting promotions without leaving room for a reply. But customers don’t just want to be told what to buy—they want to ask questions, get personalized recommendations, and feel heard.
Increase engagement through dialogue – A simple “Reply YES to claim your discount“ can boost responses and make SMS feel interactive instead of one-sided.
Improve customer satisfaction – When customers can ask about product details, purchase history, or shipping updates, they’re more likely to trust your brand and complete their purchase.
For example, CROSSNET, leveraged TxtCart’s two-way SMS marketing to drive 5,389 customer conversations, recover over 3,000 orders, and generate $453,185 in revenue—all within just 8 months. With a 17.6x ROI, this proves that interactive SMS isn’t just about engagement—it’s a revenue driver.
CROSSNET, a popular sports brand, used TxtCart’s 2-way SMS to generate $453,185 in revenue, drive 5,389 customer conversations, and recover over 3,000 orders in just 8 months.
“We’ve used A LOT of platforms, but what stands out about TxtCart is how EASY it is to get started. Setup in 5-10 minutes, intuitive to use, and the product delivers big results.”
Greg Meade
Co-Founder, CROSSNET
8. Focus on cart recovery – Don’t let sales slip away
Every abandoned cart is a missed opportunity, but a well-timed SMS can turn hesitation into a purchase. Cart recovery texts remind high-intent customers to complete their orders—recapturing lost revenue effortlessly.
Target high-intent customers – Shoppers who add items to their cart are already interested. A simple reminder, discount, or urgency-driven message can nudge them to check out.
Recapture lost revenue – A quick “Still thinking about it? Complete your order now and enjoy free shipping!”can be the push they need to convert.
💡Pro tip: Timing is everything—sending a cart recovery SMS within 30-60 minutes of abandonment leads to the highest conversion rates. TxtCart automates cart recovery by sending AI-powered, personalized SMS reminders at the perfect time. With real-time conversations, smart follow-ups, and targeted incentives, it helps you recover lost sales effortlessly.
Joyride, an LA-based dog harness brand, leveraged TxtCart’s 2-way SMS to generate $1,841,617 in revenue, with 23,616 sales generated and over 2.8M customer conversations, driving massive growth in their eCommerce operations.
“Kyle and the team at TxtCart have been instrumental in our growth. They’ve worked closely with us to create custom solutions and the results have been phenomenal. TxtCart has helped us scale significantly and provided support at every turn.“
Sam Pezeshki
Founder, Joyride
9. Combine SMS with other channels for a multi-channel win
Relying on just one marketing channel limits your reach. Instead, integrating SMS with other platforms likeemail, social media, and paid ads creates a seamless experience for customers—boosting engagement and conversions.
Create integrated marketing strategies – SMS works best when combined with other channels. For example, send an email with product details and follow up with a text reminder to drive action.
Use SMS for time-sensitive communications – Need to announce a flash sale or back-in-stock update? SMS ensures customers see it instantly rather than hours later in their inbox.
Complement with email for detailed information – Text messages are great for quick alerts, but email provides more space for product descriptions, images, and in-depth storytelling.
Choosing the Right SMS Marketing Platform for Your Budget
Not all SMS marketing platforms are worth the investment. Some offer clear pricing, powerful automation, and flexible scalability, while others have hidden fees and limited features.
To avoid overpaying and ensure your SMS strategy drives results, look for these essential factors:
Pricing transparency – Avoid platforms that charge extra for incoming messages or add hidden carrier fees after sign-up. The right service provider should have clear, upfront pricing with no surprises.
Scalability options – Your SMS marketing campaigns should grow with your business. Look for platforms that can handle more users, support increasing message volumes, and adjust as your needs evolve.
Analytics and reporting capabilities – Your platform should track net profit, conversion rates, and ROI. Detailed reporting helps you see how marketing texts impact your bottom line.
Seamless integrations – Connecting your business phone number with CRM, eCommerce platforms, and email marketing tools ensures a smooth workflow and maximizes your overall cost efficiency.
AI-Powered Features – Look for automation tools that optimize message timing, segment audiences with custom keywords, and personalize follow-ups to boost engagement without extra manual effort.
Questions to ask potential providers
Before committing to an SMS marketing platform, make sure you get clear answers to these questions:
Are there hidden fees? Check for carrier fees, monthly costs, or limits on unlimited contacts.
What compliance support is offered? Does the platform help with opt-ins, legal regulations, and TCPA/GDPR compliance?
How is ROI tracked and reported? Make sure to ask for detailed insights on how your SMS marketing performance is measured. This should include data on purchase history, click-through rates, and conversion tracking.
What customer support is included? A strong customer support team can help troubleshoot issues and optimize campaigns.
Are there long-term contracts or minimums? Some marketing texts platforms lock you into commitments that may not suit your evolving needs.
TxtCart – #1 AI SMS Platform Built to Scale With Your Business
Choosing the right SMS marketing platform can make all the difference in engagement, conversions, and net profit. TxtCart combines AI-driven automation, two-way messaging, andsmart segmentationto help businesses scale effortlessly—ensuring every message reaches the right customer at the right time for maximum impact.
Want to try conversational SMS for free?
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Co-founder at TxtCart | $50M+ revenue driven across 2500+ eCommerce brands via SMS marketing and conversational AI. Live in New York, D1 NHRA Champion, Penn State alum.
