What’s the ROI Difference Between SMS and Email in Retention?

Introduction: The Real Question Retention Teams Should Ask

For eCommerce brands relying on retention, the debate between SMS vs email marketing is less about which channel is “better” and more about which delivers higher ROI for your specific audience and product line.

Both channels are indispensable in 2025. SMS offers immediacy and sky-high engagement rates, while email excels at storytelling and driving long-term customer value. Yet when budgets tighten, leadership often asks: “Where should we double down for maximum returns?”

This blog breaks down the ROI difference between SMS and email in retention, using industry data, trends from 7–8 figure eCommerce brands, and lessons from running advanced retention campaigns.

Why ROI is Different in Retention vs Acquisition

Most brands make the mistake of calculating ROI as a simple revenue-to-cost ratio. While that works for acquisition campaigns, retention ROI must be measured in terms of customer lifetime value (CLV), repeat purchase rate (RPR), and engagement cost efficiency.

For example:

• A single SMS campaign might outperform an email blast in immediate sales but fail to build long-term loyalty.
• Email campaigns may generate slower revenue spikes but increase CLV and average order value (AOV) over months.

Retention success depends not just on quick wins but on sustainable profitability.

The Strengths of Each Channel in Retention

1. Email Marketing: The Backbone of Retention ROI

Email remains the most cost-efficient channel for retention because:

• Lower send costs: Sending 100,000 emails typically costs less than sending 10,000 SMS messages.
• Rich content formats: Email supports storytelling, visuals, product bundles, and educational content that increase AOV.
• Automated lifecycle flows: Welcome, replenishment, and win-back flows continue to generate sales with minimal incremental spend.
• Higher scalability: Email does not get significantly more expensive as your list grows.

Brands leveraging personalized email flows see:

• 20–35% higher CLV over 12 months
• Repeat purchase rate (RPR) increases of 15–25%
• Industry-average ROI between $36–$42 for every $1 spent

2. SMS Marketing: The Fast-Response Revenue Driver

SMS thrives when brands need:

• Immediate visibility: 90%+ open rates within minutes
• Time-sensitive conversions: Flash sales, product drops, or abandoned cart nudges
• Short-term revenue lifts: Quick spikes in cash flow without heavy creative requirements
  

However, SMS comes with higher costs (3–5¢ per send in most regions) and risks overuse fatigue. Most brands see ROI in the range of $5–$10 per $1 spent, which is strong but generally lower than email’s long-term return.

ROI Comparison at a Glance

Key takeaway: Email consistently outperforms SMS in long-term ROI for retention because it scales affordably and nurtures deeper brand-consumer relationships. SMS is best used as a complementary channel for urgency-driven boosts.

When SMS Outshines Email

While email dominates long-term ROI, SMS can win in specific scenarios:

• Product drops with limited inventory: SMS drives faster sellouts
• High-margin impulse buys: Ideal for brands selling consumables or trend-based SKUs
• Recovering abandoned carts: A well-timed SMS can cut cart abandonment by 20–30%

The highest ROI comes when both channels work together. For example:

• Send a personalized email for storytelling and product details
• Follow up with an SMS reminder for urgency before the offer ends

Strategic Framework: Allocating Budget Between SMS and Email

Scaling eCommerce brands often ask how to split their retention budgets. A tested framework is:

• 70–80% toward email (flows, content, A/B testing, segmentation)
• 20–30% toward SMS (targeted campaigns for urgency and re-engagement)

The exact ratio depends on:

• AOV: Higher AOV products often see stronger email ROI
• Customer demographics: Younger audiences may engage more with SMS
• Buying frequency: Fast-moving consumables benefit more from SMS reminders
  

How Top Brands Are Maximizing ROI

Leading eCommerce brands in 2025 no longer treat SMS and email as silos. They:

• Use coordinated send calendars to avoid over-messaging
• Build unified profiles so customers receive the right channel at the right time
• Tie retention metrics like CLV and NRR back to channel performance
• Continuously A/B test timing, tone, and offer sequencing
  

Retention ROI skyrockets when these channels complement rather than compete.

Key Metrics to Track ROI Properly

For a true ROI comparison, track:

• Revenue per recipient (RPR)
• Incremental revenue lift per campaign
• Customer lifetime value (CLV) by channel
• Churn reduction attributable to each channel
• Cost per engaged customer
  

Without these metrics, ROI can appear misleadingly high or low.

Closing Thoughts: SMS and Email Work Better Together

For brands that rely on retention marketing, it is rarely about “SMS vs email.” The question is “How can we orchestrate both to maximize ROI while keeping customers engaged?”

Brands that use email as the foundation of retention and SMS as the accelerator for urgency consistently outperform those leaning on just one channel.

Wertec has seen this firsthand while working with scaling eCommerce brands. By rebalancing budgets and aligning lifecycle flows across both channels, brands often increase ROI by 20–30% within the first quarter without increasing their total marketing spend.

Retention is about sustainable growth, and the smartest investment is in strategies that make every channel work harder together.