WhatsApp Business Platform vs SMS

WhatsApp Business vs. SMS – Which is better for Customer Engagement

I get asked a lot, which channel WhatsApp or SMS is best for engagement and is the lowest cost. The answer is that it depends and somewhat market specific as pricing varies from market to market.  In this blog we will delve a little into this topic and see what is right for your business.

TL:DR - Save Money, Grow Sales by moving A2P SMS engagement to WhatsApp Business.

End User Perception - WhatsApp Business vs. SMS

The effectiveness of WhatsApp Business versus SMS very much depends on the End User perception of the end users when receiving a message. SMS and WhatsApp have the benefit of not requiring another Mobile App, so device coverage is very good for each. SMS proponents would argue that SMS is on every phone, however, increasingly people only look at their SMS client when they are expecting a notification e.g. OTP, and only ever actively look at their preferred business messaging app like WhatsApp. One of the biggest issues for SMS is the sender can be spoofed and end users are never sure if they are talking to the business. In WhatsApp and other Business Messaging apps, there is a verified sender and business tick, which mean the end customer knows they are talking with the business. SMS is more a one-way notification channel, and doesn’t have an interactive (list, quick reply buttons etc.) that WhatsApp have natively.  Finally, there is strict opt-in policies for WhatsApp which means the channel is less associated with Spam.  

A2P (Application to Person) SMS is charged per message, whereas WhatsApp is charged per 24-hour conversation. So, comparing pricing is not apples to apples.  

The Global A2P SMS market is huge at $65B and growing to $89B by 2030. Mobile Squared, a leader in messaging business intelligence revealed that the average cost to send an A2P SMS internationally has almost doubled from $0.033 to $0.0646 since mid-2021 to mid-2023. These big cost increases, almost 2.5c per SMS is likely to put pressure on the A2P SMS market and drive more businesses to WhatsApp and other Business Messaging Apps.

WhatsApp / META have realised these large increases in A2P SMS present an opportunity for WhatsApp and have refined their pricing in June 2023 to address these issues in large A2P price increases. WhatsApp define different conversation types and are charged when a message (of a specific conversation type) is delivered to a customer. The difference between the different WhatsApp conversation templates is below:

• Marketing Template — This is the most expensive conversation and used to sell, promote, or drive awareness for a new product or service.
• Utility — This enables a business to get opt-in confirmation, delivery update, account updates or payment reminders.
• Authentication — This is the equivalent of delivering a onetime password or password recovery.  
• Service — Enables you to resolve customer inquiries.

Note, META offer free conversations for 72 hours, when customers send a message from an Ad that clicks to WhatsApp or Facebook Page call-to-action button. A snapshot of the WhatsApp rates from their Europe rate cards is shown below. You can get the full rate card on META page here.    

Calculating the effective rate per engaged customer is very dependent per business. WhatsApp has very high engagement rates with 98% open rates, 40-60% click through rates and 4X conversion. However, only through testing can you really understand the engagement costs. The following is a comparison for different price points for SMS and different WhatsApp market pricing for utility templates.  

The way businesses communicate and notify customers is changing. Existing methods used by businesses need to be continuously reviewed and assessed. Many communication channels have concerns e.g., SMS = Fraud, Email = Junk mail, Voice = Calls Screened, Mobile App = Muted Notifications. Choosing WhatsApp Business versus SMS goes beyond just pure cost decisions. If you followed the many SMS fraud and Smishing attacks across banks, big brands, and toll operators of late, SMS fraud is on the rise and can hurt and enterprise brand.

With Business Messaging, like WhatsApp you get:

1. Secure Sender – Business Tick your customers know they are talking to you.

2. It works – 98% open rates, up to 60% CTRs, 4x conversation of email. Everyone can use WhatsApp.

3. Make money – Upsell products/services, interactive engagement e.g. Leave parcel Yes/No

4. Save money – Cheaper than SMS for most use cases (>1 SMS in 24 hrs to customer),

Effective communication and engagement are key to success for any business. With the advent of business messaging apps like WhatsApp Business, businesses now have a powerful tool at their disposal for seamless communication and efficient notifications.

Sounds Interesting – Get in touch now.

We would love to chat with you about how your business could benefit from OMNI channel messaging and WhatsApp business platform with 4X conversion. Get in touch with us at sales@payemoji.com and we will schedule a call.

So go ahead and join the conversation by taking advantage of the 23 hours that consumers spend per week on their Messaging Apps and use that to grow your Business.