Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use SMS Marketing for 40 Percent Repeat Rates
Transcript
- Lucas: So there's this channel that DTC brands have been flirting with for years, but it's really hitting its stride now in 2026. I'm talking about SMS marketing, and not just the occasional promotional blast—I mean a full conversational strategy that drives repeat purchase rates north of 40 percent. Luna: Forty percent repeat rate from a text message? That's higher than most email programs. Which brand are we looking at here? Lucas: Milk Bar. The dessert brand—birthday cake truffles, cereal milk soft serve. They've built an SMS program that feels less like marketing and more like a friend texting you about a new flavor. And the numbers back it up: 98 percent open rate within three minutes, click-through rates around 30 percent, and that 40 percent repeat purchase rate within 30 days of opting in. Luna: Okay, 98 percent open rate—that's practically a guarantee. But how do they get people to opt in without feeling spammy? Lucas: The key is the opt-in moment. Milk Bar doesn't just slap a pop-up on their site that says 'Text us for 10 percent off.' Instead, they embed it in the post-purchase flow. After you buy, the order confirmation page has a simple line: 'Want text updates on your delivery?' with a checkbox. That's the first touch. Then, after the delivery, there's a second ask: 'Want to hear about new flavors first? Reply YES.' That double opt-in means the people who sign up are genuinely interested. Luna: Right, so it's permission-based from the start. But what happens after they opt in? Is it just promotions, or is there more to it? Lucas: It's a mix, but the clever part is the timing. Milk Bar sends an initial welcome text that includes a link to a short survey: 'What's your favorite treat? Birthday cake, chocolate chip, or something else?' Based on that answer, the SMS flow personalizes future messages. Someone who said birthday cake gets a text when the birthday cake ice cream is back in stock. Someone who said chocolate chip gets a recipe idea for using their truffles in baking. Luna: So it's not just blasting 'Buy now'—it's actually using the data to be relevant. That makes sense for retention. But what about acquisition? Can SMS actually bring in new customers? Lucas: It can, but it's expensive. Cost per acquisition via SMS is typically higher than email—around $15 to $25 per new customer, depending on the list source. But the lifetime value of an SMS subscriber is also higher. Milk Bar's data shows that customers acquired through SMS have a 60 percent higher average order value in their first year than email-only customers. Luna: Sixty percent higher AOV—that's significant. But I imagine the risk is over-messaging. People can get annoyed quickly with texts. Lucas: Absolutely. Milk Bar caps their SMS sends at two per week, and they're very careful about content. One message might be a new product drop. The other might be a customer story or a recipe. They avoid the 'flash sale every Thursday' pattern that kills engagement. And they monitor opt-out rates closely—if it goes above 1 percent in a week, they pull back. Luna: That discipline is hard to maintain, especially when a campaign is working. But I can see why it pays off. Are there other DTC brands doing this well? Lucas: A few. Warby Parker uses SMS for appointment reminders and style quizzes. Brooklinen uses it for restock alerts. But Milk Bar is the best example because they've made it an extension of their brand voice—quirky, sweet, personal. Their SMS copy sounds like it's written by a human, not a template. Luna: What about the tech stack? What tools are they using to manage these flows without it becoming a nightmare? Lucas: Most DTC brands are using Postscript or Klaviyo's SMS module. Milk Bar uses Postscript because it integrates tightly with Shopify and allows for that two-way conversation. You can set up automated flows, but also customers can reply and get a real human response within a few hours. That hybrid approach—automated for scale, human for complex questions—is what makes it work. Luna: And the ROI? Is it worth the investment for a smaller brand, or is this only for companies with a solid customer base? Lucas: I think even smaller brands can start small. You don't need a huge list. If you have 500 engaged SMS subscribers, you can test. The key is to track the metrics that matter: opt-in rate, click-through rate, revenue per text sent, and opt-out rate. If your opt-out rate stays below 1 percent, you're probably adding value. Milk Bar's revenue per text sent is around $3.50, which is excellent. Luna: Three fifty per text—that's a solid metric. But I wonder, is SMS cannibalizing email at all? Are customers who opt in for texts less likely to open emails? Lucas: That's a great question. Milk Bar's data actually shows the opposite. Customers who are SMS subscribers have higher email open rates too—about 25 percent higher. It's the same cohort of engaged customers who want to hear from the brand across channels. So it's not cannibalization, it's amplification. Luna: That's reassuring. So the playbook is: double opt-in post-purchase, personalize with a survey, limit sends to two per week, and track opt-out rates religiously. Lucas: Exactly. And one more thing—don't forget the transactional messages. Order confirmations, shipping updates, delivery notifications—those have the highest open rates and are the least likely to feel like spam. Milk Bar uses those as opportunities to upsell, like 'Your order shipped! Add a gift note for $2?' It's simple but effective. Luna: That's a low-friction upsell. I've seen brands leave that money on the table. Alright, I think we've got a solid blueprint here. But before we wrap, I want to say something quickly—if the conversations we have on this show have sparked anything you've actually used in your own marketing, and you've gotten value from that, a handful of listeners already chip in monthly through buy me a coffee dot com slash fexingo. It's what keeps the show ad-free and lets us keep digging into specific strategies like Milk Bar's SMS playbook. Lucas: Yeah, and we really appreciate those who do. It's a small group, but it makes a big difference. And we're always grateful for the support. Luna: Absolutely. So back to SMS—one thing I want to highlight: the future might actually be RCS, rich communication services, which is like SMS but with read receipts, typing indicators, and richer media. Google and Apple are both adopting it, so the experience could get even better. Lucas: That's a good note. RCS could make SMS feel more like an app experience without requiring a download. But for now, the basic SMS strategy that Milk Bar uses is accessible to any brand on Shopify. It's not flashy, but the numbers speak for themselves—98 percent open rates and 40 percent repeat purchase. That's hard to ignore. Luna: Hard to ignore indeed. Thanks, Lucas. That's a wrap on SMS for DTC.