SMS Marketing Cost Breakdown: Pricing, ROI & Low Cost SMS Service in 2025

Despite being old, SMS marketing is still an effective way to reach customers. It’s much better than the later marketing methods in terms of pricing and ROI. Plus, it offers excellent open rates, delivery rates, and other benefits.

That’s why SMS marketing is a go-to strategy for many businesses.

Before getting started with SMS marketing, it’s crucial to understand SMS marketing pricing . Businesses should have an idea of the marketing cost and how to reduce it.

Let’s dive into the details of SMS marketing pricing, calculate its ROI, and compare it to other common marketing methods.

Part 1: What is SMS Marketing?

SMS Marketing is a way to reach customers through short text messages that are usually within the range of 160 characters. These short messages can be used to send promotional deals, news, notifications, event updates, discounts, recommended products, loyalty rewards, etc.

The text messages are simple yet engaging and interactive. They are short, but they can compel readers to take desired actions. Marketers use SMS marketing to target specific audiences and run campaigns for any purpose.

Even though SMS marketing has been practiced since the early days of mobile phones, it’s still quite effective. It’s extremely straightforward, but it offers high open rates, direct communication, and massive accessibility. It’s more effective than other marketing methods in some cases, such as emergency alerts, transactional messages, OTPs, reminders, etc.

Part 2: How Much Does SMS Marketing Cost?

The cost of SMS marketing varies because of the service providers , location , API access , volume , length , etc. To get the exact cost, we need to consider all these factors together.

Generally, the cost of a 160-character SMS in the US ranges between $0.01 to $0.05 . This is the cost of the messages, and there can be other costs such as subscription plans, platform fees, etc. In some countries and regions, SMS marketing is a lot cheaper.

When you look for an SMS marketing service provider, you’ll come across two types of payment options. You can either choose the pay-as-you-go model or a subscription plan . And it depends on the service provider and what it offers.

How to choose?

• If you are getting started with SMS marketing and have no idea of the volume you need, the pay-as-you-go model is a great option. You only need to pay for the messages you have sent. Thus, you can control the amount you want to spend. Plus, it does not require a hefty budget as you can start with whatever you have.
  Keep in mind that the pay-as-you-go could be expensive in terms of per messaging cost. Service providers have no of the volume, so it is usually kept at a higher per messaging price compared to the subscription.
• For customers that have an idea of the number of messages they need per month, they should select a suitable subscription plan. It’s not only cost-effective but also helps you set a limit on the marketing campaign. You might get additional benefits and features.
  The subscription model is cost-effective when you utilize everything. Otherwise, if you don’t utilize all the resources, it could be expensive. Moreover, it’s a burden on the marketers to pay a recurring fee.

Part 3: How Much Does SMS Service Cost with EngageLab?

EngageLab is an omni-channel customer engagement platform. It makes reaching customers easier and covers all important channels like SMS, Email, WhatsApp, OTP, App Push, and Web Push .

With EngageLab, businesses can send messages to their audience in more than 200 countries and regions. It offers global coverage along with compliance with global and local rules and regulations. It is an ideal option for marketing & promotion, transaction, OTP, and system notifications.

The pricing of EnageLab is straightforward. You only need to pay for the messages as there is no platform fee . The services you get, such as analytics, automation, and channel routing, are all for free.

The per-message cost in the US is 0.0091. If you want to send 100 SMSes, it will cost you $0.91. For 1000 SMS, the cost will be $9.10. Users can also check the estimated cost using the online cost calculator.

Even though the pricing is affordable, it can even get lower if you want to send a large number of messages. Just contact the customer service for an exclusive discount.

Contact Sales

The best thing about EngageLab is that there is no limit. You can send messages to unlimited contacts and almost anywhere in the world.

Part 4: Key Questions to Evaluate SMS Marketing Pricing

Before choosing a bulk sms service provider , you need to pay attention to the following six questions about price

What is the pricing model?

Check whether the platform offers a subscription or pay-as-you-go model. Select the right one according to your needs for lower cost and better ROI.

What’s the per-message price?

There is a per-message price for regions. Check out the price that the platform offers. Make sure to check if the price changes with the volume of the messages. Usually, the higher the volume, the cheaper it will be.

Is there a platform fee?

There can be a platform fee for the service. However, some service providers like EngageLab do not charge any platform fee. It reduces the SMS marketing cost.

What are the features of the platform?

Compare the features that the platform offers. For instance, the platform should offer detailed analytics, such as SMS delivered, failed SMS, conversion, etc. These metrics help you track the performance and make improvements.

Similarly, features like number registration, expert help, quick notifications, rerouting, two-way messaging, and real-time tracking are some features the platform should offer.

Is there any additional cost for compliance?

You need to comply with local and international rules and regulations to send SMS in a specific country or region. Make sure there is no extra fee for that, and the platform handles everything.

Check out compliance with different regulations, such as GDPR and TCPA.

Is there any custom or discounted pricing?

If you want to send a large number of messages, check out the custom pricing option. Most service providers offer special discounts on a high number of messages. They offer custom pricing according to your needs. However, it’s only for enterprises.

Part 5: How to Calculate the SMS Marketing ROI?

Marketers calculate the Return on Investment (ROI) of SMS marketing to assess its performance. It’s necessary to understand the effectiveness and make improvements.

Usually, the ROI of SMS campaigns is great, but it varies from business to business and various variables. Thus, each business has to calculate the ROI of SMS marketing for each campaign.

For the calculation, businesses need to track the revenue generated from the SMS campaign. Suppose the campaign helped generate $1,000 in sales.

Now, subtract the cost of the SMS. Let’s say the total cost was $200 for the whole campaign, including the SMS charges, platform cost, subscription, etc.

Use the following formula to calculate the ROI.

Let’s put the assumed values.

It shows that the return on the investment was around 400%. If you invest $1 in SMS marketing, you’ll get $4 in revenue. The SMS marketing in this case is successful as it helped generate a multifold return compared to the expenses.

Businesses need to follow this simple process to calculate the ROI. In this case, we have calculated the ROI with the help of revenue. However, businesses can go with any key metric or goal they prefer.

For instance, instead of the revenue, they can use the profit value. It will help them calculate the profit earned with SMS marketing.

Businesses also track the open rates, delivery rates, time saved, conversion rate, and other goals. Suppose a business needs to calculate the cost per subscriber it got from SMS marketing. Here’s what it can do.

Let’s say the total number of subscribers was 2000, and the cost for the campaign was $200.

It means that the business had to spend $0.1 to get each subscriber.

Part 6: Comparing the ROI: SMS Marketing vs. Other Channels

ROI is the key metric that helps in understanding which marketing channel or method is working better than the other. Let’s compare SMS marketing with other channels in general.

SMS vs. Email Marketing

On average, the ROI of SMS marketing is $71 per dollar spent, while the ROI of Email marketing is $36 per every dollar spent. That said, SMS marketing offers almost twice the ROI of email marketing.

Both these methods have distinct advantages. SMS marketing offers better open rates of about 98%, high engagement, and quick interaction. However, the cost per message is high, the content length is short, and there are strict rules and regulations.

Email marketing is cost-effective as the cost per email is lower than an SMS. It can be used for almost any purpose, and the content is media-rich, including videos, images, text, emojis, files, etc. It has fewer complications when it comes to local rules and regulations.

But keep in mind that emails are often neglected. The open rate is only 32%. You might have an inbox full of unopened emails. It’s not suitable for getting quick returns and immediate responses.

SMS vs. Social Media Ads

The ROI of SMS marketing is about $71 per dollar spent, as we stated earlier. On the other hand, the ROI of social media ads is only $5 per dollar spent. It’s way less than email marketing.

The reason behind low ROI is the high cost of advertisement. Marketers have to spend a lot on social media channels. The ROI also depends on the ad creative, targeting, channel, audience, and other factors.

Social media ads allow businesses to target customers precisely. They can select age, location, and even the interests of the audience. The content is more engaging because of attractive images and videos. There is also an option to retarget customers, create custom audiences, and train the ad software and analytics tools for better results (such as Pixel in Facebook).

The ROI in social media ads takes time. Marketers have to create ads, select the right audience, do A/B testing, etc. However, it’s a great option for brand building and long-term customer relationships.

SMS marketing is much cheaper. For the same budget, you can reach a lot more customers compared to social media ads. Marketers can target interested people only for better results.

SMS vs. Paid Search & Display Ads

In general, SMS marketing wins over paid search & display ads when it comes to ROI. It is more effective for conversions and sales, offering a better ROI immediately.

For SMS marketing opt-in is necessary. On the other hand, marketers can target a massive audience by searching for a specific keyword on search engines. There is no need for opt-ins.

The cost of paid search & display ads is quite high because of the competition. Your competitors might bid higher and make the ad campaign more expensive. Secondly, the cost is not fixed as it depends on bidding. However, in SMS marketing, the cost is low and fixed.

The ROI of paid search & display ads depends on the keyword, competition, landing page, etc. It’s suitable for ecommerce, lead generation, and brand building.

Why SMS Marketing Wins?

SMS marketing is the clear winner. But Why?

The things that make SMS marketing a winner are:

• Cost-effectiveness
• High open rates
• Immediacy

With minimal budget, it’s possible to reach a massive audience. The cost of SMS is low and fixed compared to other methods.

Secondly, messages have a high open rate. People tend to open and read messages compared to emails, ads, and other methods. It’s short but engaging and interactive.

The delivery of SMS is immediate, and it’s capable of driving ROI faster. That’s why it is better than other methods we have discussed.

Another reason behind the excellent ROI of SMS marketing is targeting. It solely relies on the people who have opted in to receive messages. Thus, they are more likely to read and take the desired action.

Part 7: FAQs About SMS Marketing Pricing

1 What factors affect text message marketing cost?

Multiple factors affect text message marketing costs. Some of the important ones are the location, volume, message length, carrier fee, platform fee, and pricing models.

2 How to lower the cost of SMS marketing?

Firstly, look for a reliable and affordable SMS marketing platform. Make sure the length of the text is no more than 160 characters, and target the right audience for better ROI. Select the subscription or pay-as-you-go model according to your needs. Last but not least is to send fewer messages, but use powerful words, analyze the performance, and make improvements to lower the cost further.

3 Is there a free SMS marketing platform?

Yes, EngageLab is a free SMS marketing platform. It does not charge any platform fee. You only need to pay the message charges. All the features and services of the platform are free of cost.

Conclusion

SMS marketing is a cost-effective option to reach customers immediately. Not only does it offer excellent open rates but also high engagement. Businesses need to understand SMS marketing pricing to optimize the cost and get better ROI. If you are looking for a free SMS marketing platform, try EngageLab . Cover 200+ countries and regions with advanced analytics and high-end features.

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