Promotional vs Transactional SMS: Which is Better For Your Brand?

By Richard Conn

Once associated almost exclusively with spam, SMS marketing has become a text message trend in 2021. It has proven itself to be a simple yet powerful B2C communication tool, boasting a 98% open rate compared to email marketing’s 21-22%. 

With businesses across multiple sectors sending promotional and transactional messages to increase their customer engagement, satisfaction, and conversions, you’re probably wondering which SMS strategy is better for your brand. 

First, it’s important to understand the difference between promotional and transactional SMS.

Promotional vs Transactional SMS: What is the difference?

Promotional SMS

Promotional text messages are automated marketing messages sent to consenting customers/prospects.

Transactional SMS

Transactional text messages provide customers and prospects with information specifically regarding their customer journey. 

Promotional SMS Best Practices 

While creating and sending promotional messages is fairly straightforward, there are certain rules you should follow.

1. Always Get Consent 

Compliance laws mean that you cannot contact a customer without their consent. Make sure to only message contacts who have specifically opted in for SMS marketing, and always provide a clear and accessible opt-out process.

There are plenty of organic ways to collect numbers for SMS marketing that comply with the law, such as through social media marketing or blog subscriptions. You can also opt for an hosted phone system for efficiency.

2. Keep It Concise

The character limit on text messages means that you want to get straight to the point, as sending two messages in a row can be considered spammy. Write short, snappy texts that people can read on the go.

3. Be Personal and Professional

Being too formal can result in robotic, unengaging messages. On the other hand, being too informal can come across as unprofessional. 

Create a nice balance between personal and professional copy by personalizing messages and using language, abbreviations, and emojis that reflect your brand’s culture. 

4. Include a Call-to-Action (CTA)

CTAs are a popular and effective way for businesses to multiply their average ecommerce conversion rates using SMS marketing. A well-placed CTA creates a sense of urgency, increasing click-through rates and conversions.

Just remember to provide a link!

5. Don’t Message Too Frequently

Nobody likes being bombarded with ads! To avoid annoying customers, send texts only when you have something genuinely exciting to promote.

6. Pay Attention to Time Zones

It’s easy to forget that time differences can result in you contacting customers at inconvenient times. To avoid this, you can utilize customer segmentation tools in your customer support tech stack to categorize contacts by time zone. 

Promotional SMS Benefits

Promotional messaging is a great way to reach a wide range of people in a short amount of time. There are plenty of other benefits that you should be aware of too.

Promotional SMS:

• Increases customer engagement and conversion rates – CTAs, links, and personalization inspire customer action.
• Cost-effective compared to other forms of marketing.
• Has the ability to re-engage inactive customers – SMS marketing is short and to the point, meaning that people are much more likely to read and re-engage.
• Increases employee productivity – cloud messaging services and platforms often utilize cloud-based integration. They synchronize data between your texting platform and other applications, increasing efficiency and productivity. 
• Supports other marketing mediums – with the help of integrations and online scheduling, text, social media and email marketing can be united to create a harmonized and collaborative marketing strategy. 

Transactional SMS Best Practices

Creating and sending transactional messages is more straightforward than promotional messaging. However, there are still a couple of things to be aware of.

1. Identify Yourself

Because transactional messages potentially hold sensitive information, it is best practice to use a dedicated number so that customers know they are definitely being contacted by you.

2. Don’t Include Marketing Content

Including promotional or marketing content in a transactional SMS could have serious legal implications. Always make sure that your transactional message only includes the necessary information.

3. Send Only as a Response to Direct Interaction

Transactional messages should be sent in response to a specific action taken by the customer, or to provide further information regarding the customer journey. For example, you might send a confirmation text after a purchase has been made, and another text once it has been shipped.

Transactional SMS Benefits

Transactional messages provide customers with information automatically, reducing the strain on customer support and creating a more productive team environment. There are other benefits too.

Transactional SMS:

• Easy to set up 
• Reduces the likelihood of missed appointments
• Can be sent 24/7 regardless of DND status
• Builds brand loyalty and trust

Promotional vs Transactional SMS: Which is Better for Your Brand?

So, now that you know the benefits and best practices, it’s time to consider which type of SMS is better for your brand. 

Many companies implement both promotional and transactional messages into their SMS strategy. This is because they serve two different functions, both of which are vital to B2C communication. However, depending on your specific goals and services, as well as your brand’s overall culture, it might be wise to focus on one type of SMS more than the other.

Promotional SMS is beneficial for brands that:

• Want to connect with customers on a personal level
• Are targeting the younger generation
• Run an ecommerce business

Transactional SMS is beneficial for brands that:

• Provide a service that requires appointment booking
• Need to convey time-sensitive information 
• Provide a lot of customer support

It’s important to note that promotional and transactional messaging strategies are not only supportive of each other, but supportive of other communication methods too. This allows customers some agency over how they are contacted.

Utilizing a telephone system for businesses with integrated SMS support, ACD software, app notifications, social media strategy, email marketing or pre-recorded phone calls are all ways that you can diversify your customer communication methods.

Takeaways

With customer relationships becoming even more essential to business success, now is definitely the time to use SMS to connect with your customers on a more immediate and personal level. Frequency, timing, and usefulness are key, but as long as you don’t bombard your contacts with advertisements in the middle of the night, SMS is an efficient way to connect.

Whether you focus on promotional or transactional SMS, being able to deliver messages straight into your customer’s hands promises an exciting and enriching experience.

About the Author

Richard Conn is the Senior Director for Demand Generation at 8×8 Call Center Outsourcing Services, a leading communication platform with integrated contact center, voice, video, and chat functionality. Richard is an analytical & results-driven digital marketing leader with a track record of achieving major ROI improvements in fast-paced, competitive B2B environments. Here is his LinkedIn.