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What is SMS for Business?

David Gargaro
David Gargaro

SMS messaging can be used as part of a text message marketing campaign to reach customers directly on their mobile device.

SMS messaging is one of the oldest and most popular methods for people to text their friends. Businesses can also communicate with customers and market their products and services via SMS messaging. With so many people having access to smartphones and mobile devices, it’s one of the easiest ways for businesses and people to communicate with others, no matter what device they are using.

What is SMS?

SMS stands for Short Message Service. It is a text message that contains only text, limited to 160 characters. SMS does not include pictures or video. SMS is one of the oldest texting technologies, as it was developed in the 1980s. It is also one of the most widely used, although there are many newer and different ways to communicate with others.

SMS vs. text messages

SMS is the same as text messaging. Both terms refer to sending text messages with a 160-character limit. However, many people refer to "texting" or "text messages" as any type of message involving text, including MMS and messages sent on other platforms.

SMS vs. MMS

SMS has a 160-character limit, while multimedia messaging service (MMS) allows many more characters (it is limited only by the service provider). MMS enables you to send videos, images, audio, and hyperlinks with the text message. MMS also allows you to add a subject line to your message, whereas SMS does not.

SMS vs. RCS

Rich Communications Services (RCS) is a next-generation SMS protocol, and is proprietary to Android devices in Google Messages. It is an upgrade on text messaging, but it has not been as widely adopted. RCS supports a number of rich features, including read receipts, high quality images, large videos (with no need to compress media), and suggested actions.

SMS vs. Verified SMS

Verified SMS is an enhanced version of SMS and is proprietary to Android devices in Google Messages. It provides another level of validation for texts sent by businesses. Verified SMS enables businesses to display their logo to support the branded experience. It also allows customers to opt in to receive SMS from a business, which should help to reduce spam.

SMS vs. OTT

Over-the-top (OTT) applications, such as WhatsApp, iMessage, WeChat, and Facebook Messenger, use the Internet rather than a cellular network to send messages. To view these messages, recipients must download the app to their smartphone or mobile device. Each OTT application has its own protocols for sending and receiving messages, uses different platforms, and has different network requirements. It is also free to send and receive messages through OTT applications.

Types of SMS messages

There are different types of SMS messages that you can send.

P2P SMS

Person-to-Person (P2P) SMS involves text messaging in human-to-human communications. The balance of messages sent versus received should be about one to one. P2P SMS should not exceed one message per second (MPS).

A2P SMS

Application-to-Person (A2P) SMS involves text messaging from an application to a person. This is also a type of business messaging. A2P SMS allows sending of automated texts, so it can exceed one MPS. It also requires special numbers, such as short codes, toll-free and 10DLC

Short code

Short codes are five- to six-digit numbers used for sending high-volume, high-throughput A2P text messages. They cannot be used for two-way communications or to make voice calls. However, recipients can use certain keywords (e.g., "YES" to confirm, "STOP" to opt out) as responses to these types of messages.

Toll-free SMS

Toll-free SMS supports sending high-volume, high-throughput text messages using toll-free phone numbers (e.g., 800, 888). Most toll-free numbers can support SMS messages. Toll-free SMS supports two-way communications; recipients can respond to these messages as they would for normal text messages, and can call the number if it is voice enabled.

10DLC

Ten-digit long codes (10DLC) are sanctioned, 10-digit, local phone numbers that support high-volume, high-throughput messaging. They support two-way communications and voice calling. However, they require an associated carrier fee to access A2P SMS.

Benefits of using SMS for business

There are several benefits to using SMS for business, specifically related to text message marketing campaigns:

  • SMS is compatible on all hardware and software platforms. Messages can be sent and received on any modern mobile device.

  • SMS messages are small and transmitted via a cellular network, so they can be delivered and received very quickly.

  • Since SMS messages use a lower bandwidth, they can be sent in areas where voice is not available and can even be sent and received by email when there is no mobile service.

  • SMS messages are very reliable. They will get delivered either right away or as soon as the recipient’s phone is turned on and connects to a network.

  • SMS adds more versatility to a business’s communications and marketing strategies, as it is widely accepted and used.

  • SMS messages get read right away. They have a 98% open rate, which makes them much more effective than other mass marketing methods. 

  • SMS messages cost less to send than MMS messages. They are also more cost effective than having people make and monitor phone calls.

How do businesses use SMS messaging?

Businesses can use SMS messaging in many ways.

Marketing

Companies can use SMS messaging to send promotional messages, sales announcements, coupons, and other marketing content directly to their customers’ phones. They can also conduct surveys and polls, or allow recipients to participate in contests via SMS. This means customers are more likely to see and read your message, which will increase customer engagement and sales.

Sending alerts, notifications, and reminders

When a customer places an order, they can receive an automated SMS message when their order has been processed, as well as when the product is out for delivery. When a customer schedules an appointment, they can be sent a reminder the day before the appointment, as well as an automated text if there is a change in the date or time. Thanks to the high open rate of SMS messages, businesses know that customers will receive and read their SMS message on time.

Sending coupons and special offers

Businesses can send links to digital coupon codes, discounts, and special offers via SMS messaging. This enables customers to take advantage of the offer without having to remember to bring something with them, as the link will already be on their phone. This has the advantage of making it easier for customer to purchase products and services from your business, which will increase engagement and sales.

Providing customer support 

Businesses can integrate SMS into their customer support system. This enables them to make more efficient use of their human resources, as customer service reps will be able to handle multiple requests at the same time. It also enables customers to request voice calls when they need to address an issue through direct communications. Businesses can increase the efficiency of their contact centers without having to hire additional staff.

Two-factor authentication

Maintaining the security of your customers’ personal information is essential – for them and your business. You can use two-factor authentication (2FA) within SMS messages to verify a customer’s login information, complete order verification, and eliminate the risk of compromised passwords. It’s more secure than using passwords alone, and it adds another layer of protection when verifying an individual’s identity.

Supporting group messaging

You can use SMS messaging to allow groups of three or more participants to send and receive messages. Some devices will support group messages with up to 30 people. This enables your business to communicate with multiple parties simultaneously. This can be advantageous when time is a factor, such as when a family is purchasing a home.

Image Credit: jacoblund / Getty Images
David Gargaro
David Gargaro
business.com Contributing Writer
David Gargaro is a content writer and copy editor with more than 20 years of experience in multiple industries, including publishing, advertising, marketing, finance, and small business. He has written on B2B-focused topics covering business technology, sales, marketing, and insurance. David has a Bachelor of Arts degree in English and Actuarial Science from the University of Toronto. He served as the managing editor of a small publishing company, and self-published a book called How to Run Your Company… Into the Ground.