Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use SMS Marketing for Retention
Transcript
- Lucas: Luna, I want to talk about a channel that most DTC brands already have set up but barely use past the transactional — SMS marketing. Luna: You mean like those 'your order has shipped' texts? Lucas: Exactly. Brands treat SMS as a utility — tracking, delivery updates, password resets. Meanwhile, the open rate on a text message is north of 95 percent, and most are read within three minutes. Luna: That's absurdly high compared to email, which is what, around 20 percent? Lucas: Lower for a lot of lists. Yet brands pour resources into email automations and treat SMS as an afterthought. A handful of DTC brands are flipping that — using SMS as a primary retention and reactivation channel. Luna: I've noticed that too. I get texts from Brooklinen and Mejuri that feel personal, not like alerts. Lucas: Right. And that's the shift — from broadcast to conversation. But before we go deep, I want to mention something. If these kinds of marketing conversations have sparked something you've actually used at work or just thought about, a small number of listeners chip in monthly at buy me a coffee dot com slash fexingo. It's entirely listener-supported, no ads, and that's literally what keeps this show going. Luna: Yeah, it's pretty straightforward. If you get value, you can toss in a few bucks. Totally optional. Lucas: So, back to SMS. The first challenge is opt-in. You can't just buy a list and blast. TCPA rules are strict, and with 10DLC regulations, carriers are cracking down on unverified senders. Luna: What's 10DLC again? Lucas: Ten-digit long code. It's the standard for business texting in the U.S. You register your brand, get a campaign ID, and carriers filter based on message volume and complaint rates. If you bypass it, your messages get blocked. Luna: So the barrier to entry is higher than email. Lucas: It is, but the payoff is worth it. One mattress-in-a-box brand I looked at built an SMS list entirely through post-purchase flows. When someone buys, they ask: 'Want text updates? Reply YES to opt in.' That's a double opt-in, legally solid, and they got a 30 percent conversion rate on that prompt. Luna: Thirty percent? That's huge. Lucas: And those are high-intent subscribers. They're already customers, so retention campaigns hit harder. The brand then segmented by purchase recency and sent a three-part reactivation series to customers who hadn't bought in 90 days. Luna: What did the texts say? Lucas: First one: 'Hey, it's been a while. Here's 15 percent off your next order.' Second one, a week later: 'Did you know we have a new mattress topper? Customers love it.' Third one, another week: 'Last call on that 15 percent off.' That simple sequence recovered 12 percent of dormant customers within 30 days. Luna: Twelve percent is significant. What would email have done for that segment? Lucas: Probably three to five percent. The difference is SMS urgency. Email sits in an inbox. A text feels like a personal nudge. But you have to respect the channel — no more than two or three marketing texts per month, or you'll see opt-outs spike. Luna: Brooklinen does that well. They text me maybe once a month, usually with a product tip or a limited drop. It never feels spammy. Lucas: Exactly. The conversational tone matters. Compare 'Flash sale! 30% off everything! Shop now!' vs. 'Hey Luna, we just restocked the linen sheets you looked at. Want us to save a set?' Which one gets a reply? Luna: The second one, obviously. It's personalized. Lucas: That's the DTC advantage. You have the data — browsing history, past purchases, abandoned carts. Use it to make SMS feel like a conversation with a friend who works at the brand. Luna: I've seen some brands use MMS — like sending a photo of a new colorway or a short video. Does that perform better? Lucas: Significantly. MMS has a slightly higher cost per message, but engagement jumps. One jewelry brand sent a 15-second clip of a necklace being unboxed. The click-through rate was 18 percent. Luna: That's wild. Most email click-through rates are in the low single digits. Lucas: Right. But you need to be careful with file sizes and make sure the message preview isn't cut off. The first 160 characters — or the first few lines on iPhone — need to hook them. Luna: So what's the biggest mistake you see DTC brands make with SMS? Lucas: Treating it like email. They write long, formatted messages with links and CTAs. SMS should be short, one CTA, and feel human. Also, they forget to include an opt-out clearly. TCPA requires it, but even beyond compliance, giving subscribers an easy way to say 'stop' builds trust. Luna: And what about timing? When should brands text? Lucas: Avoid early morning or late night. Mid-morning and early evening work best. For reactivation, weekend afternoons can be effective because people are shopping leisurely. But test it — SMS platforms let you A/B test send times easily. Luna: I want to circle back to compliance for a second. With 10DLC, do brands need to register separately for each campaign? Lucas: Yes. Each use case — customer care, marketing, two-factor authentication — requires its own campaign. The registration process takes a few weeks, but once approved, deliverability is much more reliable than using a shared short code. Luna: That's a lot of upfront work. Lucas: It is, but brands that do it right see ROI quickly. The mattress brand I mentioned spent about $500 a month on SMS platform costs and generated over $15,000 in attributed revenue from reactivated customers in the first quarter. Luna: Thirty times ROI. That's hard to ignore. Lucas: And that's just retention. Acquisition via SMS is trickier because of opt-in hurdles, but some brands use SMS as a lead magnet — 'Text JOIN to get 10% off' — and then nurture that list. Luna: Do you think SMS will eventually replace email for DTC? Lucas: No. Email is still better for long-form content, newsletters, and detailed product information. SMS is the hammer for urgent, mobile-first moments. They complement each other. A smart strategy uses email for education and SMS for action. Luna: That's a good framework. So if a brand is just starting with SMS, what's the first step? Lucas: Get your opt-in flow right. Add a checkbox at checkout or a text to join keyword on your site. Make it clear what they'll receive and how often. Then start with a simple welcome series — three messages over a week — and measure opt-out rates. Keep it under two percent. Luna: And from there, segment based on behavior? Lucas: Exactly. Purchase history, browse activity, abandonment. Then test reactivation sequences. You'll be surprised how many customers come back from a single text. Luna: I might actually try that with a brand I freelance for. We've been relying too much on email. Lucas: Let me know how it goes. I think SMS is one of the most underutilized tools in the DTC playbook right now. Luna: Agreed. And it's only going to get more important as inboxes get noisier. Lucas: That's the thing — SMS is the quiet channel. If you respect it, it works.