Skip to content

What Is Transactional SMS? The Text Messaging Revolution

September 22, 2021

iStock-1150533050

You know those random text messages you get from a company saying your order is out for delivery?

Maybe a text stating that your hotel booking is confirmed? If you have, congratulations! You actually know more about transactional SMS than you realize.  

Nearly 98% of people receiving SMS messages are to open them. Considering this, it’s unsurprising that transactional SMS has emerged as a go-to means for customer communication across many companies and organizations all around the globe. It is non-marketed and is targeted toward customer support, aimed at delivering better customer service and experience by building healthy communications between the organization and their audience. 

What is transactional SMS? 

Transactional SMS is an automated text message that a business or an organization sends their customers or users to deliver important information regarding the personal use of the business’s services or products. Transactional SMS messages are typically non-marketed and non-promotional, meaning that the text message is triggered by the action of the customer and conveys personalized details of a transaction between the business and the customer.

For instance, if your business does an online financial transaction, then you can send an e-receipt to your customer through a transactional SMS. 

The concept behind promoting a business through SMS has evolved considerably over the decades. Even in the recent past, most organizations used only promotional SMS to push their products and services to their customers. But now the focus has shifted from pushing promoted communication to informative communication guiding customers along the customer journey. This has brought about drastic transformation in the dynamics of business–customer relationships. 

Tip: Transactional messaging isn't limited to SMS. Learn how to drive even more value by implementing transactional emails as well .

How can SMS be a game changer for your business?

Up to 80% of consumers prefer to track their orders via text when products were shipped. And around 45% of potential clients prefer to choose a brand or business after receiving an SMS from them, communicating on a personal level. 

If three out of four customers prefer messaging for offers and communication, then there is no doubt that it can be a game change for your business. With all these, it is barely surprising that small as well as large scale businesses are now increasingly using transactional SMS to deliver a seamless customer experience. 

Transactional SMS messages not only improve customer engagement, but also are time-sensitive and reliable, ensuring that critical information and updates are delivered to your customers instantly without any delays through a secure communication channel. 

Types of transactional SMS

There are different types of transactional SMS used for different purposes, even though the basic objective remains the same, i.e. conveying important transactional information to your customers at the right time. 

Depending on your purpose and the type of transaction, and regardless of the type of products or services you offer, you can use transactional SMS in various ways. The most common types of transactional SMS that are widely used include order confirmations, shipping and delivery updates, OTPs, and e-receipts, among other things. 

  • One time passwords (OTPs): Transactional SMS can be used to send OTPs to customers to maximize security of your platform. Customer actions like sign-ins, payments, and more can be verified by sending automated OTPs. 
  • Informative notices: You can convey any critical information regarding your services or products to your customers through transactional SMS. E.g. if you own an ecommerce business, then you can send these messages to your customers to inform them about their order status, shipping updates, delivery status, payments, etc. This will help you to keep your customers in loop with the entire process from the beginning to the end.
  • Booking confirmations or cancellations: Sending transactional SMS messages to customers is a great way to remind them of their booking status regarding a hotel stay, flight, or other activities. 
  • General alerts: Sending transactional SMS as alerts for certain actions to your customers can help your organization to deliver an effective customer service. Whether it’s for an appointing or financial transaction, keeping your customers updated about important events is extremely important for healthy business-client relationships. 

Promotional vs. transactional SMS

Promotional SMS messages are used by businesses to directly promote their products and services to their targeted audiences. The chief objective of sending promotional SMS is to generate interest and is solely dedicated to marketing and advertising purposes. 

Conversely, transactional SMS messages are used to deliver non-marketed messages, unlike promotional SMS, and convey important transactional information to your customers. You can only send transactional SMS to your subscribed customers, directly informing them about events and updates that are not related with promotional activities in any way. 

To put it more simply, with transactional SMS, you do not advertise your products or services, but provide value to your customers with personalized and unique text messages. As opposed to promotional SMS, transactional SMS are triggered by customer actions. 

While you can send a promotional SMS to your targeted customers about a discount coupon your business is offering anytime you want, you can only send a transactional SMS stating that an order has been successfully placed only after the customer has fulfilled their action of placing the order. 

SMS business impact 

Whether its transactional types of SMS or promotional types, each type of SMS fulfills a certain purpose as defined by the type of business sending it. As a result, the impact on your business from each type of SMS will depend on your goals and how well you utilize each SMS. 

If you’re aiming for driving targeted traffic toward your website or to improve purchase rate and customer retention, then considering the promotional SMS as your go-to option will be more effective. Promotional SMS messages convey what  your brand offers, coupons, sales, and can help promote your product and services and deliver impact business growth through the good old way of advertising but in a conventional and faster way. 

On the other hand, if you’re looking forward to improving customer engagement with better transparency, building brand credibility, or nurturing relationships with your customers by conveying important details about your product, then transactional SMS can be the most effective solution.

With regular updates from your business on critical events, your customers will receive a valuable and superior delivery experience, facilitating customer satisfaction and maximizing positive impacts on your business.  

Nearly 60% of consumers prefer to get in touch with customer support through SMS. Additionally, around 64% of customers like to make reservations through SMS because of its simplicity and convenience. 

However, combining transactional and promotional SMS in your SMS strategy can be highly impactful as well, especially if your business is an ecommerce. Connecting with your customers through both approaches will not only provide a rich communication experience to your customers, but will also enable you to market your business while simultaneously delivering value to your targeted audience.

Using transactional and promotional SMS messages will help you to trigger your desired customer actions, maximizing interactions and allowing empowering your customers to make educated decisions about your business. 

How to send transactional SMS messages

Sending a transactional SMS is as easy as it sounds. All you need is an SMS API platform that you can integrate within your existing system and effortlessly send SMS to your targeted audience through a streamlined workflow. 

To make the process more effective and quick, you can seek out bulk SMS providers and leverage their advanced services to automate your bulk transactional SMS. Just integrate, determine your target audience, set a trigger event, and create predetermined responses to successfully send the SMS. You can further customize your text message as well as your sender ID. 

As soon as a customer completes a determined action, your platform will automatically send a personalized transactional SMS to them. For example, if your customer places an order in your e-commerce site, then your system will send an order confirmation SMS to that customer as a response to the action. 

This will simplify your communication process, enabling you to connect with your global customers instantly through a secured communication channel. 

Benefits of transactional SMS 

Transactional SMS are customer-oriented and its dedication to delivering a better customer service can add a significant amount of perks to your business. Since transactional SMS are completely automated, you will save a lot of time by setting responses to predetermined triggers, avoiding the inefficiencies of manual inputs, and simultaneously ensuring that important information is promptly delivered to your customers on time. 

Not only that, using transactional SMS can help you to establish secure and reliable communication channels between your business and your clients, thus contributing to an improved customer engagement that can considerably impact the future of your business and its growth. 

Transactional SMS has extensive benefits for businesses. One of the biggest advantages of using transactional SMS for enterprises is its fast and assured delivery to customers, no matter where they are in the world. For instance, over 62% of those surveyed believe that fast delivery is the foremost benefit, followed by customer engagement and cost-effectiveness. 

The benefits of transactional SMS for any business goes way beyond just customer engagement. Transactional SMS are easy to use, flexible and scalable for any type and size of business, and highly convenient for both the business and the customers. In fact, using transactional SMS is more effective because: 

It’s cost-effective

Sending SMS to your customers on a regular basis will normally require you to depend a lot on manual expertise and efforts. These not only cost you money, but also consume a lot of time, often hindering the overall customer experience. But transactional SMS messages are completely automated which requires minimum human efforts. By minimizing manual involvement within your communication system, you can considerably reduce costs and additional expenses on customer support. 

Adopting transactional SMS into the framework of your strategy will provide a cost-effective approach of direct communication with your customers while gaining a positive impact on your overall revenue due to better delivery, engagement, and customer retention. 

Everyone uses a cell phone

About 48% of the world population owns a smartphone at present, and the total number of mobile users around the world will surpass the 7 billion mark by 2024

Whether it’s your latest smartphone or an older model, SMS comes as a standard feature on all mobile devices across the world. So if you own a mobile phone, there’s no escaping SMS message campaigns. SMS turns is the easiest, fastest, most convenient, and most reliable means of global communication. This indeed adds another perk for businesses using transactional SMS for customer communication. 

Coupled with the valuable information it conveys to their receivers and the convenience of receiving them, transactional SMS offer the perfect solution for businesses that seek superior quality customer engagement. And the best part is, it serves both ends of the spectrum – helping you to reach out to your customers anytime and allowing your customers from the remotest areas to receive critical information and updates at the right time. 

It allows for integration capabilities

Using a web-based SMS solution for sending transactional SMS can add advanced capabilities to your business communication. By using SMS APIs and plugins, you can effortlessly integrate SMS platforms within your existing system and create customized triggers as per your business requirements and goals. 

Leveraging the integration capabilities, you can gain complete control over how you use your transactional SMS to communicate with your customers, ensuring optimum customer interactions and engagement. 

6 examples of transactional SMS message uses

As discussed earlier, transactional SMS can be used to serve various purposes of business communication, regardless of your business type, size, or sector. Depending on the requirements and goals, there can be multiple use cases for transactional SMS. 

1. Welcome messages

As the name suggests, welcome messages are those targeted SMS that you can send to your new customers after they’ve signed up for any certain service that your business offers. By sending a welcome message, you let new customers know that your business acknowledges their presence and is ready to guide them along their journey. Welcome messages can be the first step toward fostering valuable communication with your customers, and facilitate a healthy business–customer relationship. 

2. Order status updates

After your customer makes a purchase from your online business, you can send them regular updates regarding the status of their orders. Through transactional SMS, you can inform your customers when their orders are confirmed or canceled, when they will be delivered, if their delivery is postponed, when their orders are successfully delivered, and inform them about returns.

These messages allow customers to gain complete visibility on their orders, from the time they place them up to deliveries. In fact, about 80% of customers prefer to track their orders. 

3. Recurring billing and payments

Transactional SMS helps you to convey information to your customers regarding every financial transaction they make. If your business has paid plans or offers automatic recurring billing option, then you can inform your respective customers about their payment dues, successes, alert them about billing dates, and send them e-receipts. 

This brings transparency in your business–customer relationship, fostering a reliable and secure process of financial transactions through a communication channel. 

4. Mobile receipts from purchases

Just like payment information, you can also send e-receipts or mobile receipts to your customers after they make a purchase. Whether you have an online business or a brick-and-mortar store, you can deliver purchase information to your customers through mobile receipts.

Using transactional SMS for sending e-receipts will develop a more flexible and reliable approach of communication with your customers. Moreover, it’ll be far easier for you to maintain a comprehensive database about your sales and revenue. 

5. Delivery notifications

You can effortlessly notify your customers that their purchased products have been successfully delivered to their specified destinations and on time with the help of delivery notifications. 

They can be used to inform customers about deliveries from ecommerce businesses, food-delivery apps, courier services, product suppliers, and  more. This significantly helps in preventing miscommunication and enables your clients/customers to develop a long-lasting relationship with your business founded on trust. 

6. Appointment confirmations

Sometimes we forget about appointments we’ve made. But the problem with this is that failing appointments and no-shows can waste a lot of time and effort for businesses as well as individuals. If you want to avoid that in your business, then sending appointment conformations to your clients can be the next best option.

Using transactional SMS for sending appointment conformations and reminders to your clients will not only help them to mark the date on their calendars, but will also enable them to be on time. This will save a lot of time and effort and will help in promoting an impactful business-client relationship. 

Conclusion 

Transactional SMS is a must-have for businesses that are looking forward to amplifying their customer experience by establishing rich communication practices. If your business does not have the necessary technology and integrations to streamline sending transactional SMS, then you can simply seek help from the dedicated bulk SMS API platform providers. They will help you to integrate and adopt advanced bulk messaging practices with the right technology and tools, and empower your organization to nurture scalable growth.  

Establishing an interactive communication channel that delivers value to the customers is not only critical for delivering an impactful customer experience, but also imperative to cultivate a healthy customer-business relationship upfront.

Communicating with your customers through transactional SMS is cheaper, faster, reliable and more convenient method over others, and it provides a well-defined customer engagement practice that keeps your business ahead.

_learn-follow-up-email@2x-1
Don't let customers leave you on read.

Make sure you use top-tier SMS marketing solutions to keep your customers engaged.

_learn-follow-up-email@2x-1
Don't let customers leave you on read.

Make sure you use top-tier SMS marketing solutions to keep your customers engaged.

Never miss a post.

Subscribe to keep your fingers on the tech pulse.

By submitting this form, you are agreeing to receive marketing communications from G2.