How Much Does SMS Marketing Cost? The Real Maths

TL;DR. An SMS programme's cost breaks into three, and the heaviest is not the one you get invoiced for. Routing is visible, the platform subscription is visible, but list attrition : the cost of replacing the numbers your sends drove away, appears on no invoice. It is what decides profitability at twelve months, and it is why frequency matters more than unit price.

The question asked is almost always "how much does a text cost". That is the wrong question. The right one is what a euro of SMS-generated revenue costs, and that figure depends far less on routing rates than on targeting discipline.

The three cost lines

Routing

Billed per message sent. The rate depends on negotiated volume and destination country, with large gaps between markets. It is the visible line, and often the only one brands compare when choosing a provider.

A point that frequently escapes notice: a text exceeding the standard length is billed as several segments. An over-long message can therefore cost double without anyone noticing before the invoice.

The platform

A subscription, usually indexed to list size or send volume. On Klaviyo, SMS sits on top of the email plan, with the decisive advantage of a shared customer profile : same segmentation, same suppression, same attribution. Detail in Klaviyo pricing.

Attrition, the invisible line

Every send consumes a resource that does not rebuild at the rate an email list does. Acquiring a number costs more than acquiring an address, consent is harder to obtain, and opting out feels final.

A brand sending six times a month to hold its monthly revenue is in fact funding a permanent rebuild of its list. The real cost of its fourth monthly campaign is not routing: it is the acquisition cost of the numbers it drove away.

That is why we cap frequency at two to four sends a month on a general-audience list, before the budget question even arises.

Working out whether a send is profitable

The method is simple and settles most arguments.

Revenue per recipient minus cost per recipient. In SMS, cost per recipient is the routing rate : unlike email, where it is negligible.

Our reference framework puts the email alert threshold at 0.10 euro of revenue per recipient: below that, the list is being solicited without being monetised. In SMS you add routing cost to that threshold, which mechanically raises the bar.

In practice, an SMS send that does not clearly beat the email threshold destroys value, since it costs more on top. Which is why SMS only justifies itself where it does better than email, not where it does the same.

Two corrections make this calculation honest.

The first is to work in margin, not revenue. A send generating 0.40 euro per recipient on a category at 25% margin returns 0.10 euro, roughly the cost of the routing itself. Working in gross revenue makes campaigns look profitable when they are not.

The second is to measure incremental, not attributed. Native attribution credits the most recent channel: a customer who got the morning email and the afternoon text is counted as SMS. The only reliable measure is a holdout, a random sample excluded from the send whose revenue you compare. On broad campaigns, real incremental is often close to zero.

The budget consequence: a programme that has never run a holdout does not know its real cost per euro generated, however precisely it tracks routing.

The basket threshold

On every recovery flow, a basket threshold is essential.

The calculation uses three figures you already have: average unit margin, the flow's observed conversion rate, and routing cost. A basket whose margin does not cover the cost of the texts sent to recover it, divided by the conversion rate, should not trigger a send.

On low baskets the result is often that the flow is only profitable above average order value. That is the rule we apply by default on cart abandonment, and it explains why a well-configured SMS flow sends far less than people imagine.

Where SMS is cheapest per euro generated

In observed order of return:

Checkout abandonment. Maximum intent, short delay, low volume. The best ratio in the programme.

Back in stock. The message is explicitly expected, producing a conversion rate no other flow matches.

Cart abandonment above threshold. Profitable as soon as the threshold is correctly set.

The closing hours of a promotion. Once per event. Revenue per recipient is high because the urgency is real.

Where it costs money for nothing

The broadly sent campaign. Cost scales with volume; revenue does not.

Duplicating the day's email. You pay for a message whose content was already delivered free that morning.

The long message. Billed as several segments for zero conversion gain.

Following up recent buyers. You pay to irritate a customer who just ordered.

What to budget to start

One line is missing from most first budgets: the cost of rebuilding the list. A phone number costs more to acquire than an email address, consent is harder to obtain, and an opt-out is treated as final. A programme sending six times a month to hold its monthly revenue is quietly financing a permanent rebuild of its own base, and that line belongs in the budget rather than in next year's acquisition spend.

Less than brands expect, provided you start with flows rather than campaigns.

The four profitable flows represent low send volume : a few hundred to a few thousand messages a month depending on traffic, for high revenue. It is opening up to mass campaigns that makes the budget explode, often with no measurable return.

Our recommendation: three months of flows only, measuring revenue per recipient, before considering a single campaign. The resulting figure gives you a defensible campaign budget, and it is usually lower than intuition suggests.

FAQ

Should we count SMS cost in revenue or in margin?

In margin. A send returning 0.40 euro per recipient on a 25% margin category leaves about 0.10 euro, the order of magnitude of the routing itself. Gross revenue makes unprofitable campaigns look profitable.

How do we know the revenue would not have happened anyway?

Run a holdout: exclude a random sample from the send and compare its revenue to the exposed group. Native attribution credits the most recent channel, so it overstates SMS whenever an email went out the same day.

How much does SMS marketing cost?

Routing, platform, and the hidden cost of attrition. The third is heaviest and the only one nobody calculates.

Is SMS more expensive than email?

Per message yes, by several orders of magnitude. Per euro of revenue, it can compete on high-intent flows.

How do we work out whether a send is profitable?

Revenue per recipient minus routing cost per recipient. The 0.10 euro email threshold rises mechanically in SMS.

Do we need a basket threshold?

Yes, on every recovery flow, calculated from your margin and conversion rate.

What budget should we plan to start?

Three months of flows only before any campaign.

Going further

The channel framework is in SMS marketing: definition and examples, and collection in collecting phone numbers for SMS.

For costing on your own account, see our SMS marketing agency.

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