Advantages and Disadvantages of SMS in Business Communication

by Audrey Oh

According to research by RescueTime, people spend an average of three hours and 15 minutes on their phones every day. Worldwide, there are 5 billion people with the capacity to send and receive SMS messages. It’s no wonder that businesses are increasingly taking advantage of the opportunities provided by SMS marketing. Let’s take a closer look at the advantages and disadvantages of SMS in business communication. 

What Is SMS Marketing?

Companies can use SMS, or “Short Message Service”, marketing to reach a wide audience at a click of a button and without busting their budget. Under the General Data Protection Regulations (GDPR), consumers must “actively and voluntarily consent to receive your message”. Once they have done so, the company can send them messages detailing promotions, product updates, event information and more (depending on the level of consent given). SMS marketing is a fantastic way for a company to build a solid database of engaged customers and prospects, which can be used to increase customer loyalty and convert leads into sales.

Advantages of SMS Marketing for Business

For businesses wishing to communicate with and engage their community, whether customers, partners or prospects, SMS marketing offers several benefits. 

Awesome Open Rates
The average open rate for SMS marketing campaigns is 98% — compared to just 20% for email. This means a business can almost guarantee that its marketing campaign will reach the intended target audience, making it an incredible investment. Research by Mobile Xco suggests that 48.7 million people will opt-in to receive business SMS messages by 2020, which represents an increase of 23% on its current levels. With open rates as high as 98%, that’s a staggering increase in the potential audience for businesses’ marketing efforts.

Impressive Response Rates
The response rate of marketing texts is nearly 30%, while the average click-through-rate for email marketing campaigns is around just 2.5%. Consumers are also 10 times more likely to redeem promotional codes and vouchers sent via text than any other platform. This is great news for Marketing Managers seeking to achieve stakeholder or senior leadership level buy-in for an SMS marketing campaign, as they can demonstrate the potential return on investment (ROI) compared to alternative methods.

Immediacy
On average, it takes just one to three seconds for SMS messages to be sent and received. Although not all messages will be delivered, 90% of all text messages are read within three minutes, and the average person replies within 90 seconds. This allows businesses to send flash sales, last-minute deals and other time-sensitive promotions and be more likely to elicit a response.

Cost-Effective
An SMS marketing campaign will consume more budget than sending out bulk emails, but it’s still a relatively low-cost option when compared to other marketing activities, such as running a PR campaign, printing and distributing flyers or purchasing ad space on Facebook. SMS marketing can also often be included in a business phone service package at a relatively low cost, allowing you to take advantage of the many benefits of having a professional number. Taking into account the potentially high ROI due to the exceptional open and response rates, SMS marketing represents a cost-effective option for any business. 

Customisable
Personalised marketing can return a significantly higher ROI than a blanket approach if it’s done right. Receiving a text is a more personal experience than being shown an advert on social media or receiving a mass-produced marketing flyer in the post. With bulk SMS software, it’s easy to send promotional messages to an entire contact list, a sub-group or an individual. By sending consumers only relevant messages, an SMS campaign will achieve a higher response rate while delivering better customer experience. Many SMS marketing services also allow consumers to “blacklist” themselves if they do not wish to receive further promotional messages, meaning your SMS list becomes a goldmine of highly targeted and primed customers ready to engage.

Reliability
Marketing emails often get filtered out by an individual’s inbox spam settings and it’s impossible to ensure 100% deliverability. Recent research revealed that over half of all email traffic worldwide is categorised as “spam”. Mobile spam filters are much less stringent and if a consumer has opted to receive marketing emails from a company, it’s unlikely that marketing messages won’t reach the intended recipient. This makes SMS marketing an extremely reliable method of business communication. 

Disadvantages of SMS Marketing for Business

No marketing method is perfect and there are some potential disadvantages of SMS marketing for business.

Content Restrictions
SMS messages are restricted to 160 characters, so marketers have to be much more concise than they would in an email. It is possible to exceed this limit, but the message will be split across multiple texts, which could prove costly for the business and frustrating for the recipient. 

The Requirement for Opt-In
If a customer or prospect declines to opt for marketing texts or restricts consent to a specific purpose, they cannot be included in SMS marketing campaigns.  Equally, if an individual opts out, the company must stop sending them marketing messages. There is a benefit to this, though, in that all customers on your mobile marketing list will be highly qualified — you won’t want to waste budget sending SMS messages to consumers who are unlikely to buy.

The Need for Fresh Content
The highly personalisable nature of SMS marketing means that content cannot be recycled and repurposed in the same way it can on social media or for display advertising. One sure-fire way to disengage customers and have them opt-out is to send repeat text messages with identical content. Marketing teams must continually create new content for their mobile campaigns. 

The advantages of SMS marketing for businesses far outweigh any potential disadvantages. SMS is a cost-effective and highly personalisable channel for marketing, allowing businesses to expand their database of contacts and run engaging and reliable campaigns that deliver a high ROI.

Find out more about the advanced business phone service features City Numbers can offer your business or contact us to discuss your requirements today.