Why Business SMS is still so popular
Business SMS services have proved enormously resilient over the past 20 years.
I’m not talking about the reliability of the SMS API used, (most of them are perfectly robust). I’m talking about the fact that business SMS seems to be as popular as ever.
I’ve lost count of the number of articles I’ve read predicting the end of SMS. It’s true that consumer SMS has been completely overwhelmed by messaging apps.
And a good thing too.
They’re much better at the job, being far more flexible and easy to use.
While instant messaging overtook SMS back in 2014, A2P business SMS volumes have continued to grow.
Why is that?
On the face of it, it doesn’t make much sense.
When then are better alternatives, why does using a business SMS platform make any sense?
It’s likely that GDPR will have dented business SMS numbers when the new legislation came into force in May 2018.
Companies with large marketing databases will have been nervous of continuing to send texts, with the threat of massive fines for companies found to be breaking the stringent new rules.
Companies can be fined up to 20 million Euros or 4% of global turnover for breaching data protection rules, although this level of fine will be reserved for the worst offenders.
Talking to a few of our customers, they reported a distinct dip in business SMS traffic shortly after the new rules came in and then a gradual rise back to the previous levels about 5 months later.
So why is using a business SMS service so effective?
Every phone that was ever made can send and receive texts. It’s the one true universal business to consumer messaging platform.
As Joana Pic from Jampp put it,
The mobile phone is a bit like God – it’s omnipresent.
SMS also has the highest engagement rate of any marketing channel. The open rate is 98% and the response rate to SMS is 6-8 times higher than email. Compelling stuff.
SMS Spam is now almost non-existent. Thanks to the GDPR our texting inboxes are more or less spam free.
There’s no distracting advertising. Messaging apps are great but your attention can be drawn by advertising. I know that’s the idea but it can be irritating.
SMS is trackable. Clicks on URLs in texts can be easily measured as can users that reply to the text. ROI on a business to consumer SMS campaign can be easily measured.
No data or Wi-Fi issues. SMS is not affected by bad or absent Wi-Fi connectivity. It’s one of the main reason that most of us till use SMS daily.
An anxious time for business SMS providers?
Business SMS service providers up and down the land are anxiously looking over their collective shoulders.
Is there a new technology out there, waiting in the wings to kill off business SMS services once and for all?
There are lots of alternatives to SMS that certainly make SMS look even more clunky and outdated than it already is but they all have one or two significant drawbacks that make them unusable by businesses.
What are the main alternatives to business SMS?
RCS Business Messaging
This is Google’s exciting innovation that will convert texting into a far richer and engaging messaging product, allowing brands to have much more intuitive and graphically rich communication with customers. Early examples of this look brilliant and it’s undoubtedly very promising indeed.
Virgin trains have been the first UK company to launch a live RCS service but we’re yet to hear how successful it’s been.
But RCS business messaging is way, way off being a meaningful service that marketers can use. It’s beset with challenges.
The service currently only runs on Android phones, so anyone using an Apple product won’t be able to use it.
At the moment, the new service is only available on the Vodafone network, rendering it pointless for marketing.
Additionally, no one has a clue how RCS is going to charged. Because RCS will use data, there’s the rather ominous chance that the consumer could end by paying, or partially paying, for the privilege of being marketed to by brands.
A few pricing models have been proposed but nothing concrete has been decided.
For the moment, people seem to be content with concentrating on the functionality and how awesome it could be compared to SMS, rather than dealing with the reality of making the service viable.
I’m sure that’s a gross over-simplification of the situation but progress does seem to be painfully slow.
According to Nick Lane, the chief strategist at Mobilesquared, just 12% of companies globally have RCS and use it. In the UK, I suspect that figure is way lower.
Andreas Constantinides, Director at Yuboto, offers an even bleaker assessment.
“RCS is dead unless all – and I mean ALL – operators buy into it and push it out there, Google isn’t really trying to get RCS going, it doesn’t take it seriously. After 10 years only 55 MNOs globally are signed up and it won’t work unless all MNOs sign up.”
As it stands then, I can’t see RCS making a real impact before 2020.
Other ‘over the top’ messaging apps
Other messaging apps have long been touted as the biggest threat to SMS. The promise of free messaging for brands has been always been tantalisingly close but just beyond reach.
The main issue here is that unlike SMS, there’s a wide variety of different apps being used, so without specific data on which app a customer is using, there’s no way of sending someone a message.
Gaining the appropriate opt-in consent will be complicated and messy and most consumers won’t be bothered to grapple with the long-winded consent process.
Business SMS services simply use the mobile phone number as the unique identifier for customers and that’s all you need to send them a text. (Assuming of course that you have the appropriate opt-in consent.)
We’re also rather prone to ignoring or missing messages sent via apps. Take a look at our interview with a millennial who explains what messaging apps she uses and why she continues to use SMS.
Business SMS services appear unthreatened…. for the time being
While the alternatives to using a business SMS platform look tantalising, they just aren’t practical in any form at the moment.
Research from Mobilesquared reveals that last year, 1.67 trillion application-to-person (A2P) SMS messages were sent globally, a figure expected to rise to 2.8 trillion by 2022.
That’s a 68% rise in business to consumer texts over a 4-year period.
Referring to RCS messaging, Jo lane from Mobilesquared said,
“We don’t expect RCS to replace SMS on a one-for-one basis - after all nothing beats the open rate of SMS.”
Overall, it’s a murky picture out there and none of the new services looks to have the upper hand.
This persistent fragmentation means that business SMS services will still play the lead role in customer communications for some time to come. (Hurrah!)