How Do I Calculate ROI for RCS Campaigns?
Calculate RCS ROI by comparing incremental revenue and cost savings against total RCS costs (platform + per-message + setup). Include direct revenue, retention value, and operational savings. Typical RCS ROI is 3-5x within 12 months. Payback period averages 6-9 months.
Key Points
- { "Direct revenue": "conversion rate × order value" }
- { "Retention value": "LTV improvement × customer count" }
- { "Operational savings": "support cost reduction" }
- { "Typical ROI": "3-5x within 12 months" }
- { "Payback period": "6-9 months average" }
RCS ROI Calculation: Proving the Business Case
ROI calculation is how you justify RCS investment and prove it's working.
The ROI Formula
RCS ROI = (Incremental Revenue + Cost Savings - Total RCS Costs) / Total RCS Costs
Example:
- Incremental revenue: $300,000
- Cost savings: $50,000
- Total RCS costs: $80,000
- ROI = ($300,000 + $50,000 - $80,000) / $80,000 = 3.4x or 340%
Identifying All RCS Costs
Direct costs: Platform fees, per-message, SMS fallback, setup Indirect costs: Team time, content creation, training Hidden costs: Premium support, API overage, carrier fees, data storage
Calculating Incremental Revenue
Method 1: Direct attribution
- 100,000 RCS messages, 5% conversion (vs 2% SMS)
- 5,000 conversions × $50 AOV
- Incremental: (5%-2%) × 100,000 × $50 = $150,000
Method 2: Cohort comparison
- RCS cohort: $150 LTV over 12 months
- Control: $100 LTV over 12 months
- LTV lift: $50/customer × 100,000 customers = $5,000,000
Method 3: Multi-touch attribution
- Assign percentage of conversion value to RCS based on journey role
Calculating Cost Savings
Customer service reduction:
- 1,000 tickets/month deflected × $15/ticket = $180,000/year
Operational efficiency:
- 20 hours/week saved × $50/hour × 52 = $52,000/year
Reduced SMS costs:
- 500K messages shifted from SMS to RCS = $12,000/year
Building the Business Case
Year 1 ROI Example:
Costs:
- Platform fees: $18,000
- Per-message: $60,000
- Setup: $15,000
- Team time: $40,000
- Total: $133,000
Benefits:
- Incremental revenue: $300,000
- Customer service savings: $180,000
- Operational efficiency: $52,000
- Total: $532,000
ROI = 300%Payback period: 4 months
Industry-Specific ROI
- E-commerce: 4-6x (cart recovery focus)
- SaaS: 3-5x (trial signups)
- Financial services: 5-8x (retention)
- Healthcare: 3-4x (appointment attendance)
Common ROI Calculation Mistakes
- Attributing all lift to RCS (use controls)
- Ignoring time costs (team time is real)
- Forgetting SMS fallback costs
- Optimistic revenue projections
The Bottom Line
RCS typically delivers 3-5x ROI within 12 months, with payback periods of 6-9 months. Build the business case with conservative estimates, track actual performance, and iterate based on data.
Related Questions
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