Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use SMS Marketing for 40x ROI
Transcript
- Lucas: So earlier this week I was going through my texts, and I get this message from a brand I bought shorts from maybe two years ago. It just said, 'Hey Lucas, we just dropped a new color of your favorite fit. Want first dibs?' Luna: Wait, did you actually click? Lucas: I did. And it got me thinking about just how effective SMS marketing has become for direct to consumer brands. I mean, we talk a lot about email and social ads on this show, but text messaging is quietly delivering some of the best ROI in e-commerce right now. Luna: I've seen the stats. Open rates can be like 98 percent, and click-through rates around 30 percent. That's absurd compared to email. Lucas: Exactly. And that's not just hype — those numbers come from real campaigns. For context, email averages around 20 percent open rates and maybe 2 to 3 percent click-through. So SMS is a completely different ballgame. Luna: But isn't there a risk of being intrusive? I mean, my phone is personal. Lucas: That's the key. It only works if it's permission-based. The brands doing this well are the ones that get explicit opt-in, often at checkout or through a dedicated landing page. And they're not blasting offers every day. The best practice is maybe two to four texts per month, max. Luna: So who's actually nailing this? Give me a concrete example. Lucas: Let's talk about Chubbies, the shorts brand. They built a massive SMS list by offering a discount code at signup. But what they do smart is they segment their list by purchase history. So if you bought their '5-inch Stretch Shorts', you get notified when a new pattern drops in that specific style. It feels relevant, not spammy. Luna: That makes sense. I've also heard of MVMT watches — they used SMS for their flash sales and apparently saw a 40x return on their investment. Lucas: Yeah, MVMT was a pioneer there. They treated SMS like a direct line to their best customers. They'd send a text with a limited-time code, and within minutes the inventory would sell out. The urgency of an SMS — it's immediate. You check your phone, you act. Luna: But what about the cost? SMS isn't free like email. Lucas: It's not. Depending on volume and provider, you're looking at maybe half a cent to two cents per message. But if your average order value is fifty dollars and you're getting a thirty percent click-through rate, the math works. Plus, the conversion rates are higher because it's less crowded than the inbox. Luna: Right. And with iOS privacy changes killing email tracking, SMS gives you a more reliable way to measure engagement. Lucas: That's a huge point. Apple's Mail Privacy Protection broke open rates for email. But SMS delivery and read receipts are still trackable. Brands are shifting budget accordingly. Luna: I want to talk about the conversational aspect. Some brands are using two-way SMS, not just broadcast blasts. Lucas: Yeah, that's the next level. Instead of just sending a link, they'll ask a question like 'What color are you looking for?' and then a human or chatbot responds. It builds a relationship. I've seen brands like Brooklinen use this for customer service — you text them and get a real person within minutes. Luna: That feels premium. But it also requires staffing or automation. Small brands might struggle. Lucas: True. But tools like Postscript or Klaviyo now have SMS automation flows that feel personal without needing a full team. You can set up a 'back in stock' alert or a cart recovery text that triggers automatically. Luna: So what's the biggest mistake you see brands make with SMS? Lucas: Over-messaging. I've unsubscribed from brands that texted me every single day. The unsubscribe rate spikes fast. Also, not providing value — if every text is a sales pitch with no personality, people tune out. The best SMS campaigns include tips, exclusive content, or even just a funny meme. Luna: Interesting. And speaking of value, I know this show is ad-free, and we keep it that way thanks to listeners who support us. If you find these marketing insights useful, you can chip in at buy me a coffee dot com slash fexingo. It literally helps us keep doing this every day without selling your attention. Lucas: Yeah, that support is what lets us dive deep into topics like this without worrying about sponsors. So thanks to anyone who's already part of that. Luna: Alright, back to SMS. One thing I'm curious about: how do you grow an SMS list without being creepy? Lucas: Transparency is huge. You have to tell people exactly what they're signing up for — 'text JOIN for weekly deals and insider access' — and then deliver on that promise. Also, double opt-in is standard. Some brands use a keyword like 'TEXT' on social media or in their email signature. Luna: What about compliance? There are laws around texting. Lucas: Absolutely. In the US, you need to comply with the TCPA and the can spam Act. That means clear opt-in, easy opt-out, and identifying yourself. The penalties for violating are steep — up to $500 per text. So brands have to be careful. Luna: Worth it for that ROI though. Lucas: If done right, absolutely. I'd argue SMS is the most underutilized channel in DTC right now. Most brands are still focused on Instagram and email, but the phone is where your customers actually live. Luna: So what's the one thing a DTC brand should do today to start with SMS? Lucas: Pick a platform — Postscript, SMSBump, or Klaviyo's built-in SMS — and build a simple signup flow. Offer a 10 percent discount for opting in. Then send a welcome text that sets expectations. That's it. Start small, measure the response, and scale from there. Luna: Good advice. I'm actually going to test that with my own side project. Lucas: Let me know how it goes. For now, that's our take on SMS marketing for DTC brands. If you've got a success story or a warning, we'd love to hear it.