If you are sending SMS but not tracking the right numbers, you are basically driving with your eyes closed. The real power of SMS marketing comes from understanding the key terms, measuring them correctly, and then using those metrics to improve every campaign.
This guide walks through
- The most important terms in SMS marketing
- How to analyse them in a simple funnel
- How to optimize your strategy based on what the numbers tell you
Along the way, you will see how a platform like Pulse, an AI powered SMS and Email marketing tool, makes this much easier in real life.
And yes, we will talk specifically about link clicks and how to turn those clicks into retargeting audiences on Facebook and Google.
1. Core SMS Marketing Terms You Need To Know #
Think of these as the basic vocabulary of SMS marketing. Once you know them, every report suddenly makes sense.
1. Delivery Rate #
What it means
The percentage of messages that were successfully delivered to your recipients’ phones.
Formula
Delivery rate = Delivered messages / Total messages sent × 100
Why it matters
If delivery rate is low, everything else suffers. You cannot get clicks or conversions from messages that never arrive.
2. Opt In Rate #
What it means
The percentage of people who agree to receive your SMS messages out of everyone who had the chance to opt in.
Formula
Opt in rate = New SMS subscribers / Total people who saw the opt in opportunity × 100
Why it matters
This shows how attractive your SMS program is. A higher opt in rate means your incentive and messaging are working.
3. List Growth Rate #
What it means
How fast your SMS subscriber list is growing over time, after accounting for opt outs and bounces.
Formula
List growth rate (per month)
= (New subscribers − Opt outs − Bounces) / Total subscribers at start of month × 100
Why it matters
A growing, healthy list means more reach and more revenue potential from SMS.
4. Click Through Rate, CTR, Link Click Rate #
What it means
The percentage of recipients who clicked on a link in your SMS.
Formula
CTR = Unique link clicks / Delivered messages × 100
Why it matters
Link clicks show real engagement. People who click are showing intent and are perfect for retargeting, follow up campaigns, and sales.
Pro tip
Always use trackable links in SMS so you can see exactly how many people clicked, which link they clicked, and what they did on your site.
5. Response Rate, Reply Rate #
What it means
The percentage of recipients who reply to your SMS, if you invite replies.
Formula
Response rate = Number of replies / Delivered messages × 100
Why it matters
Great for two way campaigns, customer support, surveys, and conversational flows. High response rate means your messages feel personal, not spammy.
6. Conversion Rate #
What it means
The percentage of recipients who complete a desired action after receiving your SMS. This could be a purchase, booking, form submission, or any business goal.
Formula
Conversion rate = Number of conversions / Delivered messages
(or / Unique clicks, if you prefer) × 100
Why it matters
This is the metric that tells you whether your SMS campaigns are actually making money or driving the outcomes you care about.
7. Revenue per SMS and Revenue per Subscriber #
What it means
How much money each SMS or each subscriber generates on average.
Formulas
Revenue per SMS = Total revenue attributed to SMS campaign / Number of messages sent
Revenue per subscriber (for a period)
= Total SMS attributed revenue / Total active SMS subscribers
Why it matters
These metrics tell you whether SMS is worth the investment and help you justify scaling spend.
8. Unsubscribe Rate, Opt Out Rate #
What it means
The percentage of people who opt out (reply STOP or similar) after receiving a message.
Formula
Opt out rate = Number of opt outs / Delivered messages × 100
Why it matters
High opt out rates are a warning sign that you are sending too often, being too aggressive, or not staying relevant.
9. Bounce Rate #
What it means
The percentage of messages that could not be delivered because the number is invalid, inactive, or has other issues.
Formula
Bounce rate = Bounced messages / Total messages sent × 100
Why it matters
High bounce rate hurts deliverability and might indicate poor data quality or old lists.
10. Spam or Complaint Rate #
What it means
The rate at which carriers or users flag your messages as spam.
Why it matters
High complaint rates can get your sender blocked, filtered, or heavily restricted. It is one of the most serious red flags.
11. Time To Click #
What it means
How long it takes, on average, for a recipient to click your link after the SMS is delivered.
Why it matters
Helps you understand when your audience is most active and how urgent your offers feel.
12. Average Order Value, AOV from SMS #
What it means
The average order value for purchases that came from SMS campaigns.
Formula
SMS AOV = Total SMS attributed revenue / Number of SMS attributed orders
Why it matters
If SMS buyers tend to spend more, you can invest more confidently in SMS traffic and offers.
2. How To Analyse Your SMS Metrics in a Simple Funnel #
To keep things simple, think of your SMS performance as a funnel.
- Sent
- Delivered
- Clicked
- Converted
- Revenue
You can plug your numbers into this funnel for any campaign.
Example
- Messages sent: 10,000
- Delivered: 9,500
- Clicks: 1,140
- Orders: 114
- Revenue: 5,700 dollars
Now calculate
- Delivery rate: 9,500 / 10,000 = 95 percent
- CTR: 1,140 / 9,500 = 12 percent
- Conversion rate from delivered: 114 / 9,500 ≈ 1.2 percent
- Conversion rate from clicks: 114 / 1,140 = 10 percent
- Revenue per SMS: 5,700 / 10,000 = 0.57 dollars
- Opt out rate: use your opt out count from the same send
Once you see your funnel, the question becomes
Where is the biggest drop, and which metric is limiting my revenue?
For example
- If delivery rate is low, you focus on list quality and sender reputation.
- If CTR is weak but delivery is fine, you work on copy, offers, and link placement.
- If conversions from clicks are low, you fix landing pages and checkout, not just the SMS copy.
Pulse makes this kind of funnel view easy by showing sends, deliveries, clicks, and conversions per campaign, along with revenue when connected to your store such as Shopify.
3. How To Optimize Your SMS Based on These Metrics #
Now let us turn the theory into practical optimization. For each key metric, here is what to do.
A. How To Improve Delivery Rate #
If your delivery rate is low
- Clean your list
Remove invalid, landline, and very old inactive numbers. - Use properly registered numbers
In the US, use approved A2P 10DLC, toll free, or short code senders, not random unverified numbers. - Avoid risky content
Do not send blocked content categories or spammy looking messages. - Monitor carrier feedback
Platforms like Pulse and your provider can show delivery issues by route or campaign.
In Pulse, you can periodically segment and suppress hard bounces and maintain a cleaner list so more of your messages land.
B. How To Boost Click Through Rate and Link Clicks #
CTR is often the fastest lever to pull.
To increase link clicks
- Sharpen your offer
Strong, clear benefits beat generic promotions. - Use one main CTA
Give people one obvious thing to click, not five competing links. - Make the link early
Put the link in the first message segment or near the start of the text. - Use urgency and scarcity honestly
Limited time or limited stock, if real, boosts action. - Personalize where possible
Reference their name, product interest, or status, for example VIP or new customer. - Test different CTAs
Compare “Shop now” versus “Claim your 15 percent off” and see which drives more clicks.
In Pulse, you can
- Use AI to generate multiple message variations
- A B test different offers or CTAs
- See CTR per campaign and per segment, then double down on what works
C. How To Increase Conversion Rate from SMS #
If people are clicking but not buying or completing the goal, look beyond the SMS itself.
To improve conversions
- Match message and landing page
The page should clearly continue the promise of the SMS, not feel like a disconnect. - Remove friction
Simplify forms, minimize steps, and make checkout smooth on mobile. - Use clear social proof
Reviews, ratings, and trust signals near the CTA. - Use tailored landing pages
Send different segments to different pages where possible. - Follow up intelligently
Use SMS or email reminders for abandoned carts or unfinished forms.
With Pulse plus an integrated store, you can track which SMS campaigns drive actual purchases, not just clicks, and trigger automations like abandoned cart flows for visitors who do not complete checkout.
D. How To Reduce Opt Out Rate #
If opt out rate spikes, it is a sign something is off.
To bring it down
- Check frequency
You may be texting too often. Test dialing back and see if opt outs drop. - Improve targeting
Stop sending every message to everyone. Use segments based on behavior and interest. - Balance value and promotion
Mix helpful content with offers, not pure discounts all the time. - Clarify expectations
Make sure at opt in you clearly state what people will receive and how often.
In Pulse, you can create engagement based segments
- Highly engaged subscribers can receive more frequent campaigns.
- Less engaged subscribers stay on lighter, more targeted flows.
E. How To Improve Revenue per SMS and per Subscriber #
Once your basic metrics are healthy, focus on monetization.
To lift revenue per SMS
- Increase relevance
Send product recommendations based on past purchases and browsing. - Focus on big moments
Product launches, seasonal events, and strong bundles often generate more revenue per send. - Upsell and cross sell
Use post purchase SMS to suggest related items. - Use VIP or high spender offers
Target your best buyers with exclusive deals.
Pulse helps by
- Syncing purchase data and product feeds through integrations such as Shopify
- Letting you build segments like “high value customers” or “purchased in last 30 days”
- Automating follow ups that naturally increase customer lifetime value
4. How To Use Link Clicks for Retargeting on Facebook and Google Ads #
Here is where SMS and paid ads can work together and make each other stronger.
When someone clicks your SMS link and lands on your site, they become a website visitor. With the right tracking in place, you can retarget those visitors with ads on Facebook, Instagram, and Google.
Step 1. Use Trackable Links with UTM Parameters #
Always use links that include UTM tags, for example
- utm_source = sms
- utm_medium = pulse
- utm_campaign = campaign name
This helps your analytics tools and ad platforms understand traffic from SMS.
Step 2. Make Sure Your Site Has Tracking Pixels Installed #
Install
- Meta Pixel for Facebook and Instagram ads
- Google Ads tag and/or Google Analytics for Google campaigns
Once installed, any SMS click that goes to your site can be recorded as a visit from “SMS traffic.”
Step 3. Build Custom Audiences of SMS Visitors #
Inside your ad platforms
- Create a custom audience of people who visited specific pages or came from specific UTM values connected to your SMS campaigns.
- For example, “All visitors with utm_source = sms in the last 30 days.”
These are people who were engaged enough to click your SMS but may not have bought yet.
Step 4. Retarget with Relevant Ads #
Now you can show ads to those visitors such as
- Reminder ads for the product they viewed
- Discount or value based ads to bring them back
- Education or proof based ads if you have a longer sales cycle
This multiplies the impact of each SMS click, because you do not rely on that one visit to convert. You keep showing up later on social and search.
Pro Tip, Putting It All Together with Pulse #
Here is a practical workflow
- Use Pulse to send a campaign with a strong offer and a trackable link.
- Measure CTR and conversions. Create a segment of “clicked but did not purchase.”
- Use your analytics or an integration to build a matching retargeting audience in Facebook and Google Ads for those visitors.
- Run retargeting ads specifically for that group while also sending them a follow up SMS or email reminder.
You are now stacking channels
- SMS to drive initial clicks
- Email for deeper nurturing
- Paid ads to stay visible and bring visitors back
5. How Pulse Helps You Track, Analyse, and Optimize All These Terms #
Knowing the terms is step one. Being able to see them clearly and act on them is what actually grows your business.
A platform like Pulse can
- Track core SMS metrics automatically
Sends, deliveries, clicks, conversions, revenue, opt outs, and more. - Show performance by campaign, segment, and automation
So you know which flows and broadcasts actually make money. - Use AI to improve copy and offers
Generate and test better messages, subject lines, and CTAs faster. - Combine SMS and Email
Coordinate cross channel journeys such as welcome, abandoned cart, and win back. - Integrate with ecommerce
Pull in order data from Shopify to calculate revenue metrics and build smart segments.
If you want to move from “just sending texts” to running a fully measured, optimization driven SMS and Email strategy, you can get started with Pulse’s AI powered marketing platform here
