SMS Campaign Cost Calculator
This SMS campaign calculator helps retention teams sanity-check text-message campaign economics before sending a loyalty offer or win-back promotion.
How this calculator works
Estimate SMS campaign cost, expected orders, gross profit, and ROI from a text-message promotion.
Campaign cost = recipients × messages per recipient × cost per SMSEstimated orders = recipients × conversion rateEstimated gross profit = estimated orders × average order value × gross marginCampaign ROI = (estimated gross profit − campaign cost) ÷ campaign cost
Use a conversion rate you have measured
The result moves almost one for one with conversion rate, so a guess here is a guess everywhere. Use the conversion rate from your last send to the same segment with a similar offer. For a first campaign, run the calculator with a pessimistic figure of around 1% and see whether the send still pays; win-back segments in particular convert far below engaged subscribers.
Put the offer in the margin
If the message carries a 20% discount, orders from the campaign earn 20 points less gross margin than usual. Reduce the gross margin input accordingly. Most SMS return-on-investment figures quoted by platforms skip this step, which is one reason they look so good.
Costs beyond the per-message rate
The platform subscription, higher rates for MMS and for some destination countries, carrier fees, and the subscribers who opt out after each send all belong in the cost. Blend them into cost per SMS, and remember that each opt-out is a permanent reduction in the list you paid to build.
Reading the ROI
Large percentages are normal because text messages are cheap, not because the campaign was remarkable. The question worth asking is incremental: would those customers have bought anyway? Hold back a random 10% of the segment from the send and compare their orders with the rest.
These calculators are intended for planning and benchmarking. Use your own finance, attribution, and campaign data before making final budget decisions.
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Frequently asked questions
What is a typical SMS campaign conversion rate?
It depends heavily on the segment, the offer, and how recently the subscriber opted in, so a general benchmark is not much use for planning. Use your own last comparable send, and for a new list test the campaign economics at a pessimistic 1% before committing.
Why does this calculator use gross profit rather than revenue?
Because SMS platform reports usually use revenue, and that is why their return figures look better than the finance team's. A campaign that generates $20,000 of revenue at 35% margin with a 20% discount attached has earned far less than the headline suggests.
Should I send a reminder message?
A reminder usually lifts conversion, but it doubles the message cost and increases opt-outs. Model both versions in the calculator, and weigh the extra orders against the subscribers you lose for every future send.
Does the calculator account for opt-outs?
No. To include them, estimate the share of recipients who will opt out, multiply by the lifetime value of a subscriber, and add the result to campaign cost. For large lists this is often bigger than the message cost itself.
Worked examples
Each example runs the same formulas as the calculator above, using figures typical of that kind of business.
Apparel brand flash sale
An online fashion brand running a 48-hour clearance promotion with a reminder message to a core segment.
| Recipients | 35000 |
|---|---|
| Messages per recipient | 2 |
| Cost per SMS | 0.025 $ |
| Conversion rate | 4.5 % |
| Average order value | 85 $ |
| Gross margin | 52 % |
| Campaign cost | $1,750.00 |
|---|---|
| Estimated orders | 1,575 |
| Estimated gross profit | $69,615 |
| Campaign ROI | 3,878% |
Grocery delivery win-back
A meal delivery service targeting inactive users with a limited-time discount via a single text message.
| Recipients | 8500 |
|---|---|
| Messages per recipient | 1 |
| Cost per SMS | 0.032 $ |
| Conversion rate | 2.2 % |
| Average order value | 38 $ |
| Gross margin | 35 % |
| Campaign cost | $272.00 |
|---|---|
| Estimated orders | 187 |
| Estimated gross profit | $2,487 |
| Campaign ROI | 814.4% |