How Deliverability Affects ROI in Cannabis Text Marketing

There’s a lot of chatter amongst the other cannabis text providers that text marketing is no longer effective for cannabis retailers. For those providers, it isn’t. They aren’t able to deliver nearly as many messages as they used to (which was never incredible). There are a lot of reasons for that, which we’ll cover below.

With SMS spam filtering, segmentation has become more important than EVER. Smaller campaigns yield higher ROI with larger delivery rates. Trying to blast your whole list isn’t going to work anymore.

We are here to say, emphatically, that text marketing is absolutely a high-ROI generating channel. Performance is directly related to best practices and good fundamental technology, which our clients enjoy.

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In the month of November, the average Happy Marketers customer saw $32k in ROI and recaptured 65 lost customers from their competitors.

We’re going to guide you through those best practices that make our clients so successful at both getting messages delivered and creating incredible ROI on their campaigns.

But first, let’s talk about why messages don’t get delivered to begin with!

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Link Gating

One really big factor is link gating. When text messages contain links that lead the recipient to a webpage to view the message, you not only annoy the customer you’re texting, a large amount of those messages will be spam filtered.

Text carriers don’t like link gating in messages, and they also don’t like any links with http: or slashes. This alone accounts for a lot of messages not getting through on their platforms. Happy Cabbage doesn’t require this.

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Mass Blasting

Frequently sending to large amounts of contacts all at once, with the same message, is a big no-no for text carriers. It’s even worse when it’s a long list of all the discounts you provide, or when you provide discounts to customers that aren’t interested in the product categories you continue to promote.

When you send to large numbers of people at once, carriers don’t like it. When you hit people with the same type of message that is irrelevant to some of them, you’ll have your number blocked or reported.

If your text marketing service isn’t working HARD with you to ensure you aren’t making these mistakes, and if they’re forcing you into link gating, you will do worse than just see poor deliverability. 

You’ll burn those contacts forever. On any platform or service.

Let’s dive into the best practices you can employ today with Happy Cabbage to see great deliverability and most importantly, ROI.

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Best practices for higher SMS ROI and delivery rates

1. Send to smaller segments with messages relevant to preferences (brand specific messages to customers of that brand or category, recapture specific messages to bring in lost customers). The best size is below 1,000, (LEVERAGE YOUR MEMBER DATA to keep segments tight)
2. ChatGPT is a great resource for changing up content (we have a direct integration)
3. Don’t message the same customer more than 7x in a single month
4. Add images for higher throughput
5. Use longer messages with natural language (avoid abbreviations, or promo heavy language)
6. Don’t include links that have “http” or slashes (use something simple: brand.com)
7. Messaging your whole list in a single day won’t work anymore
8. Delivery rate and ROI are not the same.

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Most of these are simple concepts to follow. Keep segments specific, make messages tailored to them directly, don’t over message each customer; there’s not some secret magic hidden here. What it translates to, however, is being much more strategic and thoughtful about how you drive ROI out of this channel.

Have customers that only shop for edibles? Don’t message them about flower deals.

Even better, make a number of dependable, small segments in Happy Cabbage. One we always recommend for high, confident ROI? Recapture segments.

A recapture segment is a list of customers who haven’t shopped with you in over 90 days. Sending them specific messaging is one of the best ways to drive revenue into your stores that your competition has taken.

In the following charts, we illustrate how our clients have performed on deliverability and recaptured ROI during the month of November 2023. 

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Delivery Rate Success

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As you can see in this chart, 26% of our customers enjoy a delivery rate of 75-100%. A further 47% are hitting 50-75% delivery rates. Those that follow our best practices religiously are seeing 90+%.

Think about these numbers the next time you see one of the other text marketing platforms telling you that text delivery is tanking.

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Average Lost Customers Recaptured

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Digging back into recaptured customers, you can see that when delivery rates are 50+%, recaptured customer rates are very similar. This clearly shows that the nearly 75% of Happy Cabbage customers delivering over 50% are recapturing an average of 61-71 customers every month. 

What’s interesting is that some of our customers sending at lower delivery rates are ALSO seeing between 60-70 recaptures. These customers typically have very large member lists as well as many stores, and tend to blast more of their members at once. Their volume makes up for the lack of best practices. Just imagine how much more ROI they would see with higher delivery rates!

For example, a large client with a large list who was strategic in their segmentation and followed our messaging guidelines saw over 330 recaptures in November. High volume leads to lower delivery rate in general, but you can still send high volume with high delivery rates using the Happy Cabbage methods built into our tools.

Recapturing a customer is the most important ROI metric you can look at with text marketing. When you earn them back you also take them back from a competitor. Further, if you keep them engaged as a customer, you can achieve a strong lifetime value on them you would have lost otherwise.

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Sales ROI Within 24 Hours of Sending Text Campaigns

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When a retailer sends a text campaign to their customers and those customers make a purchase within 24 hours of receiving the message, we calculate that ROI in Happy Marketers. On average, our retail customers saw $1.56 in sales generated PER TEXT.

Considering we only charge $0.14 for delivered texts, that means the avg Happy Cabbage customer achieved above a 10X ROI per text sent! If you follow our best practices, you’re banking $1.80 per text delivered. That’s nearly 13X ROI.

We outline our pricing strategy in this blog here, and we show how much better that model is than the other providers.

If you’re sick of seeing low delivery rates, losing customers to your competitors, and paying for undelivered messages, it’s time to talk to us at Happy Cabbage.

We don’t charge you for undelivered messages, and we work hand in hand with you to ensure you’re getting the maximum ROI in your campaigns. The other providers simply don’t.