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What Is Transactional SMS?

What Is Transactional SMS?

What is the difference between a transactional SMS and a promotional SMS? And why does this difference matter? Get the lowdown here.

Do you ever look at your iPhone’s screen time report and think, “Wow, I spend a lot of my time on my phone?” You’re not alone.

It’s no secret that most of us spend a lot of time staring at our phone’s screen. Our own study found that–on average–most people spend close to 3 hours on their phones every day. As a whole, Americans spend an average of 20 hours a week on their phones.

So, it should come as no surprise that 90% of people read a text message within three minutes of receiving it. If you want to communicate valuable information that is time sensitive, SMS is the most effective channel. 

Whether you’re looking to confirm customer appointments, send shipping updates, verify account activities, or confirm orders, you should consider sending transactional SMS.

Want to learn more about supporting your audience along the customer journey? Let’s dive in.

The Meaning of Transactional SMS

Transactional SMS is a type of SMS between a business and a customer. These texts contain information that is critical for your customers to use your product or service. For example, if you enable two-factor authentication on your email account, then the email provider must send an SMS when you access your inbox from a new device.

How Are Transactional SMS Different From Promotional SMS?

We wrote an entire guide on the difference between promotional and transactional SMS. In short, transactional texts are triggered by events, interactions, or preferences within a service or application rather than by a company’s marketing campaign.

The lines sometimes blur when transactional emails help fulfill marketing needs by–for example–recovering abandoned carts or re-activating inactive users. Still, these texts are functional and provide an expected response to an (in)action or a request. 

It can help to think about it like this: Unlike promotional texts, which are bulk distributions of the same marketing message to many recipients simultaneously, transactional SMS are personalized and are typically sent to individuals one at a time.

Let’s take a look at a promotional SMS example.

Today 8:00 AM
Flash Sale!!! Until the clock strikes midnight, get 65% off our spring collection with code TEXT65. Shop now: http://txt.st/VB1x

And here is an example of a transactional SMS.

Today 8:00 AM
Dear Customer, your one-time password is 1234. Please do not share it with anyone.

If you’re wondering why this difference matters–after all, you’re just texting customers–it comes down to consent. While you always need to have permission to send texts to your customers, the level of permission varies based on whether you’re sending transactional or promotional messages.

How Does Transactional SMS Compare to Other Channels?

To illustrate the unique benefits of transactional SMS, let’s quickly compare different communication channels.

  • Mail is not ideal for reminding someone their car insurance is renewing soon or that their check-up is next week. It’s slow, expensive, and can end up in the bin. 
  • Phone calls are a bit extreme if you’re letting someone know a package arrived. They can also be untimely and intrusive, and if you don’t reach someone and leave a voicemail, there’s no guarantee they’ll hear it.  
  • Email alerts are commonplace, but they can get lost in overflowing inboxes or end up in the no-mans-land that is a junk folder.
  • Text messages are read quickly, given that people already spend a ton of time on their phones. They also prefer getting this kind of information via SMS. Just look at how patients want to receive appointment reminders.

Source: Maximizing Patient Access and Scheduling Report by MGMA

Examples of Transactional SMS Formats

You can use transactional SMS throughout the entire customer journey and across business functions. Just take a look for yourself.

Welcome Message

You can send customers a text message when they sign up for a new account, whether that be online or in-store.

Today 8:00 AM
Welcome aboard Tom! Thanks for creating an account. You can access it here at any time:http://txt.st/VB1x

Order Confirmation

When people place an order online, they expect immediate confirmation that they’re good to go. When you need to communicate information immediately, SMS is your best bet.

Today 8:00 AM
Hi John: Your Glovo order was started on Mar 11, 2020, at 10:42 am. You can see your order details here: http://txt.st/VB1x

Shipping Update

Today 8:00 AM
Hi there! Good things are on their way: Your order has just shopped. You can expect to get it in 3-5 days.

Two Factor Authentication (2FA)

Two-factor authentication adds a layer of security. SMS 2FA has become the industry standard, as most people carry their mobile phones at all times. 

Today 8:00 AM
For your online transaction at DiscountStores for USD145.94, please use this Verified by Visa one time; 1234567 within 5 minutes. Thank you.

Appointment Reminder

Appointment reminders allow you to reach out to your customers in advance of an upcoming appointment, reducing no shows in the process.

Today 8:00 AM
Hi Laura, this is a reminder for your appointment on 3/10/2020 at 3 pm. Reply Y to confirm, N to cancel.

Payment Reminder

These types of transactional emails keep customers informed of when payments are due on their accounts and also help improve cash flow.

Today 8:00 AM
Hello John, a reminder that your account balance of $68.24 is due on the 23rd. You can submit your payment online, or we also take credit card payments over the phone!

Support Ticket Confirmation

Support-based transactional SMS can help both customers and your support team by aiding the communication process and notifying each party of status updates. 

For example, if a customer submits a new ticket, you can send them a text to let them know you’ve received their request and will get back to them ASAP. 

Today 8:00 AM
Hi Sarah, This is to inform you that your customer support ticket 6537 has been received. We will be in touch shortly. Thank you.

How Do I Get Started with a Transactional SMS Service?

Depending on the volume of transactional SMS you plan on sending, there are a couple of ways you can get started. 

  1. For more complex use-cases, where you plan on sending a lot of transactional texts, we recommend using our SMS API. You can plug our API into your CRM or reservation system to notify your customers of upcoming appointments. We also recommend leveraging our API if you plan on using SMS for two-factor authentication and shipping notifications.
  2. Zapier allows you to connect your SimpleTexting account to 1,000+ apps like Google Calendar, Zendesk, and Shopify, to automate common workflows. For example, you can send SMS reminders via SimpleTexting for approaching Google Calendar events or send automated abandoned cart SMS.
  3. If you only plan on sending a low volume of transactional SMS, then you can leverage our template feature. Templates allows you to avoid rewriting the same message over and over again, reusing frequently sent messages.

There is so much competition for your customer’s attention. Between social media, messaging apps, and email, people receive a lot of notifications. Sending a proactive notification or reminder via SMS can help you cut through that noise. 

No matter what kind of transactional message you decide to send, the speed and effectiveness of this proactive messaging keeps your customers happy and helps you get ahead of potential issues.

If you’re interested in sending transactional SMS, be sure to sign up for a free trial or schedule a demo today!

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