SMS vs Email for Your Loyalty Programme: Why 98% Open Rates Change Everything

Email open rates for small business marketing average 12%. SMS open rates average 98%. If your loyalty program sends messages primarily via email, you are reaching approximately one in eight customers. The other seven are not seeing your communications — not because they don't care, but because they never open that folder.

The Default Problem: Why Everyone Starts with Email

Email feels like the responsible choice. It's free, familiar, and easy to set up. Every booking system, POS platform, and CRM defaults to email notifications. Business owners assume customers check it regularly.

They don't — at least not for marketing messages. Commercial email open rates have been declining for a decade. In 2024, average open rates for small business marketing emails sit at 12–15%, and that's before accounting for promotions folders, spam filters, and the fact that most people have two or three email addresses and check only one.

One small business owner on Reddit described the disconnect: "I was sending email newsletters to 800 customers. My open rate was 11%. That means 712 people never saw anything I sent. I thought I had a communication strategy. I had the illusion of one."

What a 98% Open Rate Actually Means for Loyalty

SMS messages are read within 3 minutes of receipt in most cases. The 98% open rate is not a marketing industry benchmark — it reflects the basic behaviour of how people use phones. Text messages appear on the lock screen. They create a notification that persists until cleared. Unlike email, there's no promotions tab, no spam folder, and no chance the message sits unread for three days.

For loyalty programs, this changes the math completely.

If you have 400 enrolled customers and send a loyalty reminder via email, approximately 48 people read it. If you send the same message via SMS, approximately 392 people read it.

The customer who is three stamps away from a free reward and hasn't visited in five weeks is not checking their email for a loyalty reminder. They might, however, notice a text that says: "Hi Amara, you're 3 stamps away from your free treatment. Come by any time."

The Five Loyalty SMS Messages That Drive Revenue

Not all SMS messages are equal. The ones that work are specific, timely, and tied to the customer's individual loyalty status — not generic promotions.

1. The Milestone Nudge

Triggered when a customer is one or two stamps away from a reward.

"Hi James, you're 1 stamp away from your free coffee. We're open until 7pm today."

This works because it's relevant to the individual, action-oriented, and time-specific. It's not a blanket promotion — it's a personalised update tied to something the customer is already working towards.

2. The Re-engagement Message

Triggered when an enrolled customer hasn't visited within a defined window (typically 1.5–2x their average visit gap).

"Hi Sarah, we haven't seen you for a while — your loyalty card still has 7 stamps saved. We'd love to see you back."

This message works on two levels: it shows you noticed their absence (which feels personal, not automated, even when it is) and it reminds them of progress they'd lose by not returning.

3. The Reward Ready Alert

Triggered when a customer reaches the reward threshold.

"Congratulations! You've earned a free [reward]. Valid until [date]. Show this message at the counter."

This message has a near-100% response rate among recipients because it announces something free and time-limited. The urgency is built in.

4. The Welcome Message

Sent immediately after enrolment.

"Welcome to [Business Name]'s loyalty program! You've earned your first stamp. Collect [X] stamps for [reward]. We'll keep track — nothing to carry."

First impressions matter. A welcome SMS confirms the enrolment worked, explains the mechanics simply, and sets expectations. It also confirms you have the customer's number — opening the channel for future messages.

5. The Event or Seasonal Offer

Used sparingly — no more than once per month — for time-limited promotions.

"Double stamps this weekend only at [Business Name]. Valid Saturday and Sunday — see you there."

The key constraint here: keep it rare. A business owner on Reddit noted that frequent discount messages "train customers to only visit on promo," degrading the baseline value of a visit. Use promotional SMS as punctuation, not the whole sentence.

When Email Still Has a Role

Email is not useless — it's just the wrong tool for time-sensitive loyalty communications.

Email works well for:

• Monthly loyalty statements — a summary of points, visits, and upcoming rewards, sent on a predictable schedule
• Detailed program information — how-to guides, terms and conditions, new reward explanations
• Customer receipts and booking confirmations — transactional emails that customers actively look for

The distinction is between messages customers need to receive urgently (SMS) and messages they'd find useful when they get around to it (email). Loyalty nudges and re-engagement messages are time-sensitive by nature — they lose their impact if read three days late.

Building a Two-Channel Loyalty Communication Strategy

The most effective approach is not SMS or email — it's SMS for push communications and email for informational ones.

Collecting Phone Numbers at Enrolment

SMS only works if you have phone numbers. This means your enrolment flow needs to capture a mobile number, not just a name and email.

Wallet-based loyalty systems like GPASS collect a name and phone number at signup (the QR-to-card flow in 30 seconds). This builds an SMS-capable loyalty database from the first enrolled customer, without requiring a separate email collection step or third-party list management.

The key is making the ask natural at enrolment: "We'll send you a text when you're close to a reward — what's your mobile number?" Most customers, having just decided to join the loyalty program, are willing to share it.

Frequency and Tone: Avoiding the Spam Trap

The difference between a welcome SMS notification and an annoying one is frequency and relevance.

Rules for SMS loyalty communications:

• Maximum 2 messages per month per customer (outside of triggered messages)
• Triggered messages only for milestone nudges and re-engagement — not on a fixed schedule
• Always personalise with the customer's name and their specific loyalty status
• Always give an opt-out (required by law in most jurisdictions: "Reply STOP to unsubscribe")
• Never send between 9pm and 8am

A business sending relevant, personalised, infrequent SMS messages typically sees opt-out rates below 2%. A business sending weekly promotional blasts typically sees 15–20% opt-out within three months — and a database that shrinks rather than grows.

The Cost Comparison

SMS carries a per-message cost (typically €0.05–0.10 per message in Europe) that email does not. For a 400-customer loyalty database sending four triggered messages per customer per month, that's approximately €80–160/month in SMS costs — in addition to the loyalty platform fee.

This sounds significant until you compare it to the revenue impact. If SMS re-engagement brings back 20 lapsed customers per month at €25 average spend, that's €500 in recovered revenue per month against €80–160 in message costs. The ROI is strong, and it's measurable.

Key Takeaways

• Email open rates average 12% for small business marketing; SMS averages 98%
• For time-sensitive loyalty messages, SMS is the only channel you can rely on being read
• Five SMS message types drive the most loyalty revenue: milestone nudge, re-engagement, reward alert, welcome, and rare promotional
• Use email for informational content; SMS for everything that requires a prompt response
• Maximum two non-triggered messages per month to avoid opt-out rates rising
• Collect phone numbers at loyalty enrolment — not just email addresses
• SMS cost (€0.05–0.10/message) is typically outperformed 3–6x by revenue impact

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