Transactional SMS: when is SMS not SMS marketing?

10 May 2023

What is a transactional SMS message?

A transactional SMS message is a non-marketing SMS that is sent from a company to a customer to facilitate a business transaction. The purpose is to streamline the service a customer receives from the organisation and enhance their sales experience. All messages are set up automatically on your SMS platform as part of a flow that is triggered by the customer action. Examples of transactional SMS messages are:

Purchase or booking confirmations

This is often an instant message to confirm what you have bought or booked. You may set up an automatic short text message for products or services to acknowledge the purchase. It could contain an image of the item, the price paid, the expected delivery period, or whatever else you set it up to include.

With booking confirmations, you would typically include the date and time of the booking and the option to cancel or reschedule. Appointments and reservations can be migrated to the recipient’s mobile calendar.

Appointment & reservation reminders

This is a real golden nugget for businesses. You can set up your transactional SMS to send out reminders to the end user. This facility has transformed the way many industries operate and helped to increase revenue. As an example of how transactional SMS messages have helped the NHS:

There are around 15 million GP appointments missed every year due to no-shows and last-minute cancellations and only 5% of cancellations are made in time for another patient to fill the slot. This is an ongoing problem across a variety of healthcare settings. On average the NHS is losing £216 million a year from lost appointments which is money that could be used for other urgent healthcare needs. The NHS today is urging practitioners to use SMS for healthcare so that patients have a record of their appointments with them and can receive reminders and updates to prompt them.

The restaurant and beauty industries have also seen a vast improvement in their operations. When restaurants returned post-pandemic, they saw a seismic shift in no-shows. This was largely down to panic booking due to limited covers and customers contracting Covid but failing to cancel their reservations. Transactional SMS can be set up to send a reminder to the customer at certain intervals such as the day before or even an hour before. For example:

“Hi John, you have a reservation at the Tap house tomorrow night at 7.30pm. We hope you can still make it. Text back with “Y” if you are still coming or click the link to cancel and rebook”

With a good SMS provider, the customer will be able to interact with the business using two-way SMS. 

Delivery updates

Keep your customers happy with up-to-date delivery notifications. You can link messages to your preferred courier and allow your customers to track their purchases. This function of transactional SMS adds an extra layer to your customer engagement and is highly valued by those who receive it. 70% of shoppers say that delivery tracking is one of their top three considerations when buying online.

Resetting passwords

Forgetting passwords is an everyday occurrence for many as we are constantly warned not to write them down anywhere. It can be very annoying. What is also annoying is the process of resetting them. Resets usually involve the customer entering their email address (if they remember which email address they used in the first place), followed by the provider sending a reset link to the customer’s email.

With transactional SMS messages, the reset link can be sent straight to the recipient’s phone in a text message. Although not a common practice yet, it makes much more sense to carry out this function via text. There are a lot of people who don’t use their mobile phones for email, so for these people, resets via email are not helpful, just inconvenient. An SMS message will just pop up ready for action so it doesn’t need to interrupt your online shopping experience and you are much more likely to remember which phone number you used to set up the account than email.

Bill payment reminders and overdraft warnings

Nobody enjoys paying their bills and we’ll admit that it can be a bit of a buzzkill to receive a notification of this nature anytime. However, a bill payment reminder could save your customer from getting a late payment fee.

Getting an overdraft warning from your bank just before you click on an online purchase could also save you from walking straight into a fee. Customers value reminders that help them to stay on track and save on unnecessary costs. It’s a great way to grow brand loyalty.

Getting feedback

As part of your transactional SMS programme you are permitted to ask customers for feedback on your service to help improve your processes. A feedback request must not contain any marketing material. You can ask customers to rate your service and delivery and also ask them to leave you a review.

Why use transactional SMS messages?

Transactional SMS is a great way to enhance the current level of service you offer to your customers. There are a few different ways to communicate with your customers but none are as efficient and instant as SMS messaging.

Sending confirmations, reminders, delivery notifications, and updates this way will reduce the amount of time your customers spend trying to contact you directly. Your texts will preempt many of the needs associated with their purchases.

73% of consumers feel that having a good customer service platform increases their brand loyalty and 77% of people feel that bad customer service affects their quality of life. This makes sense when you consider how we can be affected by bad customer service. Many people have an issue or complaint on the back burner that we are dealing with. In the worst cases, incidents can drag on for days and weeks.

86% of people are put on hold every time they call a business. The use of transactional SMS can:

  • Cut down on waiting times
  • Reduce staff levels
  • Decrease the amount of frustration felt by customers

Check out our customer loyalty blog to find out more about building your customer relationship.

What is the difference between transactional and promotional SMS?

Transactional SMS has the sole purpose of communicating with customers regarding their specific purchase of goods and services or bookings and appointments. A transactional SMS process should carry your relationship with your customer to the conclusion of any transaction they have made with you.

Promotional SMS messages are only for marketing to subscribers. It is permission-based and can only be carried out when a subscriber has opted in to receive your marketing messages. It is currently illegal in the UK to send marketing messages out to people who have not opted in and is considered to be spam. With SMS marketing messages you also need to offer a clear opt-out function to your messages so that people can easily unsubscribe. You can add an opt-out function to your transactional SMS messages but you are not legally obligated to do so.

How long can a transactional SMS message be?

Both promotional and transactional SMS messages can only be 160 characters long. Any more than this would be classed as additional messages. 160 characters doesn’t seem like a lot but believe us when we say that your customers do not want to read any more than that on a text.

Did you know that according to The Open University, Dr. Zeus wrote his award-winning book The Cat in the Hat using only 50 different words? Your message need not be defined by your SMS character limits alone.

Are OTP messages the same as transactional sms messages?

A one-time password (OTP) is often used by banks to facilitate a secure transaction for authentication. It is treated like a transactional SMS in that it’s not permission-based. The password (usually a series of numbers) can be input on the device where authentication is required. OTPs are typically time sensitive. Some retailers are now using OTPs for additional security if customer payment details are stored.

Can SMTP be used to send SMS?

An SMTP Service enables you to automatically send and receive SMS text messages from any email-sending application.

With an SMTP Service, your application sends an email to the SMS gateway in a particular format that contains the destination phone number and the message body. Once the system has authenticated and verified your email, the body of the message and the phone number is extracted, and an SMS message is sent to the recipient.

An SMTP Service can also send back a delivery confirmation to your application, along with any replies that are received from the recipient’s handset

This service is ideal for users who are looking to include an SMS communications method for their customer base but would like to manage this through their existing email platform. For example, a doctor surgery who would like to send SMS confirmations to their patients may find this service useful as it will allow them to send SMS messages and keep track of replies for filing with the patient records if necessary.

What are transactional push notifications? And why transactional SMS is better

Transactional push notifications are short messages that pop up on the user’s mobile, reminding them to take some action. They serve the same purpose as transactional SMS but arrive in a different format. Push notifications originate from apps and websites and are sent in real-time.

Push notifications have their plus points and get the job done but, there are some downsides. SMS messages are more trusted as they are a preferred method of communication. We receive most of our text messages from our friends and family. SMS has an open rate of 98% and a read rate of minutes, this is because we love getting a text. Even the noise of a text message pulls at our curiosity and we cannot leave them alone. Text messages don’t feel intrusive or spammy.

When we receive a push notification it will randomly pop up over the top of whatever we are using our phones for and if swiped away, can be difficult to locate again depending on the phone. The ability to swipe push notifications makes them easy to ignore. SMS messages can be stored in messages but push notifications are time sensitive and will disappear after a short time.

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