SMS marketing consistently delivers some of the highest returns of any digital channel. With open rates near 98% and click-through rates averaging 19 to 36% depending on the campaign, the numbers are compelling. But what does that actually translate to in dollar terms for an Australian business sending 1,000, 5,000, or 15,000 messages per month?
This guide walks through the ROI calculation methodology, shows worked examples at three common volume levels, and helps you estimate what SMS marketing should return for your specific business type.
The SMS Marketing ROI Formula
ROI for SMS marketing is calculated the same way as any marketing investment:
ROI = (Revenue Generated - Campaign Cost) / Campaign Cost × 100
The inputs you need:
- Campaign cost: Your monthly SMS platform cost (plan fee)
- Messages sent: How many SMS you send per month
- Response rate: What percentage of recipients take an action (click, reply, purchase)
- Conversion rate: Of those who respond, what percentage convert to a paying customer
- Average transaction value: How much each converted customer spends
Industry benchmarks for Australian SMS marketing:
- Open rate: 95-98%
- Click-through rate (for messages with a link): 19-36%
- Response rate (two-way campaigns): 15-25%
- Conversion rate (from response to purchase): 8-20% depending on offer quality
These numbers vary significantly based on list quality, message content, timing, and offer strength. The worked examples below use conservative assumptions to give you a realistic floor, not a best-case ceiling.
Worked Example 1: 1,000 Messages per Month
Business type: Local retailer or small service business with an established customer base.
Small Business SMS Campaign (1,000 messages)
At this scale, a single monthly campaign to 1,000 customers paying for itself 22 times over is realistic, provided your list is warm (opted-in, recent customers) and your offer is relevant to them. A flash sale, loyalty reward, or appointment reminder campaign to existing customers will typically exceed these numbers. A cold list to new prospects will underperform them.
What a 1,000 message campaign looks like in practice
- Monthly "members only" offer to your loyalty database
- Appointment reminder sequence for a service business with 50 clients per week
- Post-purchase follow-up with review request and return discount
- Seasonal promotion (EOFY, Christmas, Mother's Day) to existing buyers
Worked Example 2: 5,000 Messages per Month
Business type: Growing retail brand, multi-location service business, or active e-commerce store.
Mid-Volume SMS Campaign (5,000 messages)
At 5,000 messages, you are likely running a mix of campaign types each month: promotional blasts, transactional reminders, win-back sequences for lapsed customers, and possibly two-way chat conversations. The response and conversion rates drop slightly compared to a pure loyalty-database campaign because the list is broader, but the total revenue generated grows substantially.
Campaign mix at 5,000 messages per month
- 1,500 messages: Monthly promotional campaign to full list
- 2,000 messages: Appointment reminders and confirmations
- 1,000 messages: Post-purchase follow-up sequence
- 500 messages: Win-back campaign for customers inactive for 90+ days
Splitting your messages across campaign types this way gives you more opportunities to generate revenue and keeps the average ROI high because each campaign is targeted to the right segment at the right time.
Worked Example 3: 15,000 Messages per Month
Business type: Established e-commerce brand, franchise group, or multi-location healthcare / service network.
High-Volume SMS Program (15,000 messages)
At scale, the response and conversion rates soften slightly because you are typically reaching further into your list (including less engaged segments), but the absolute revenue generated is much higher. A business sending 15,000 messages per month that achieves even half these numbers is still generating over $5,000 in monthly revenue from a $600 investment.
What 15,000 messages per month looks like
- Weekly promotional sends to the full database
- Automated birthday and milestone campaigns
- Post-purchase series (thank you, review request, upsell, re-engagement)
- Appointment reminders across multiple locations or staff members
- AI-powered two-way conversations for inbound inquiries
Factors That Increase SMS ROI
List quality
Your list is the single biggest driver of ROI. A list of 1,000 opted-in recent customers who know your business will outperform a list of 5,000 cold numbers every time. Build your list properly: ask for consent at every touchpoint, import existing customer databases with care, and keep it clean by honouring opt-outs and removing bounced numbers.
Personalisation
Messages that include the recipient's first name and reference a specific product or service they have used get significantly higher engagement. Even basic personalisation, using [FirstName] in the opener, typically lifts response rates by 10 to 15 percent.
Timing
SMS sent between 10am and 8pm on weekdays perform best for most Australian businesses. Avoid early morning, late night, and weekends unless your business is a weekend-specific one (restaurants, event businesses). Tuesday to Thursday afternoons are consistently strong for promotional sends.
Offer strength
The offer you make matters more than any other variable. A 10% discount on something your customer already buys will convert. A vague "check out our new range" will not. SMS is a direct, personal channel. Use it for offers that genuinely earn a reply.
Two-way messaging and AI agents
Campaigns that include a call to action for recipients to reply (to claim a discount, confirm an appointment, or ask a question) consistently outperform one-way broadcasts. Adding an AI agent to handle inbound replies automatically means you capture every interested response, not just the ones that come in during business hours. See Monster SMS features for how this works.
SMS ROI vs Other Marketing Channels
| Channel | Avg. open rate | Avg. CTR | Typical cost per 1,000 contacts |
|---|---|---|---|
| SMS | 95-98% | 19-36% | $50 |
| 20-30% | 2-5% | $10-20 | |
| Facebook Ads | N/A | 0.9-1.5% | $10-50 (CPM varies) |
| Google Ads | N/A | 2-5% (search) | Variable (CPC) |
| Direct mail | ~80% noticed | 1-5% | $500-1,500 |
Email is cheaper per contact, but the engagement gap is large. A message that 95 percent of recipients open and a third click through versus a message that 25 percent open and 3 percent click is a fundamentally different conversion opportunity. For time-sensitive offers and campaigns where you need attention fast, SMS is hard to beat on pure engagement metrics.
Calculating Your Own SMS ROI
To estimate what SMS marketing would return for your specific business, plug your own numbers into the formula:
- Choose a plan from Monster SMS pricing based on your expected monthly volume
- Estimate your response rate (start conservative at 5 to 8% for warm lists)
- Estimate your conversion rate (10 to 15% is a reasonable starting assumption for a strong offer)
- Use your average transaction value
- Calculate: (Responses × Conversion rate × Average transaction value) / Plan cost
Most businesses find the return is well above 10x. The cases where SMS ROI disappoints usually come down to list quality problems (cold or unengaged contacts), weak offers, or sending at the wrong time.
For more on building an effective SMS strategy, see our complete SMS marketing Australia guide.
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