Transactional SMS: What is it + use cases

Reading Time: 10 minutes

Ever wondered how brands keep customers updated with every order, delivery, and appointment? The answer is simple — transactional SMS.

Unlike promotional SMS, which focuses on marketing messages, transactional SMS delivers essential, time-sensitive information. Whether it’s confirming a booking, updating an order status, or sending payment receipts, these quick, automated texts keep things smooth for both you and your customers. 

As brands look to improve user experience, these messages are important because they help keep customers informed about their interactions in real-time.

Staying competitive would mean adapting to these SMS trends and integrating SMS transactional messages into customer touchpoints. 

This post explains everything there is to know about transactional SMS and how to get started. We’ll also discuss best practices for sending transactional SMS and how you can create effective, clear texts that add value to the customer experience.

What is transactional SMS?

A transactional SMS is an automated text sent to customers to share essential information, often triggered by a specific action or customer-initiated account activity. Since the messages regarding transactions are non-promotional, they aim to ensure timely communication between a business and its customers.

Some key characteristics of transactional SMS messages that make them reliable and valuable for customer communications include:

• Time-sensitive: These messages are sent at crucial moments when immediate communication is required
• Automated: SMS transactional messages are often triggered automatically by specific actions or events, ensuring prompt delivery without manual intervention
• Non-promotional: The content is strictly informational and doesn’t include marketing or promotional material 

Some common transactional SMS examples include:

• Order confirmations: A quick message confirming a customer’s purchase and providing an order number
• Shipping updates: Alerts on the status of a delivery, including tracking information
• Appointment reminders: Notifications reminding customers of upcoming appointments or reservations to reduce the instances of missed engagements
• Account alerts: Instant notifications of any account activity, such as login attempts or password changes, helping customers maintain account security
• Password resets and one-time passwords (OTPs): Secure links or codes to reset a forgotten password for safe account access

Difference between promotional and transactional SMS

Promotional vs. transactional SMS messages differ in purpose, timing, intent, and other aspects.

Promotional SMS messages are designed to advertise products, services, or special deals to customers. Examples of promotional SMS include welcome messages, sales alerts, discount offers, product announcements, or invitations to join loyalty programs. 

Here’s how else they differ based on their use:

Consent

• Since the intent is to promote, businesses must gain consent from customers through opt-in forms, website popups, and others to send promotional SMS messages
• Transactional SMS doesn’t require explicit marketing consent

Timing

• Promotional SMS marketing messages are subject to regulations restricting sending times (usually only during business hours)
• Because of their critical nature, transactional SMS can be sent at any time to ensure timely communication

Impact on business

• Promotional SMS or MMS campaigns work well for increasing sales, attracting new customers, and engaging with a broad audience 
• Transactional bulk SMS can help foster customer trust by ensuring they receive critical updates in real-time

Below are the major differences between transactional vs. promotional SMS:

Feature	Promotional SMS	Transactional SMS
Intent	Marketing and sales	Informational
Timing	Restricted to certain hours	Anytime, based on need
Permissions	Requires customer consent	No explicit consent needed
Content	Offers, discounts, new product alerts	Order status, account updates
Regulations	Subject to stricter marketing rules	Fewer restrictions, but privacy rules apply

Here’s a visual comparison highlighting the differences between a promotional SMS and a transactional SMS example. Notice the content and how they communicate different intent here. The promotional SMS prompts action and the transactional SMS is simply informative.

Best practices for using transactional SMS

To maximize the effectiveness of your SMS transactional messages, here are some best practices you can follow: 

• Keep messages clear and concise: Transactional SMS messages should be to the point and deliver key information. Include only essential details to help customers understand the message at a glance. 
  
  You can insert links in text messages so customers can easily access further details or resources. Clear and concise transactional SMS formats help maintain more professional communication.
• Ensure regulatory compliance: Adhere to transactional SMS rules and regional regulations. Check regulations like the TCPA (Telephone Consumer Protection Act) in the United States and GDPR (General Data Protection Regulation) in Europe to ensure compliance. Most regions require customers to opt in before receiving messages. They also make it easy for them to opt out. 
• Personalize messages: Transactional SMS messages can feel more relevant to the recipient if you personalize them. Beyond their name, your personalized text messages can reference specific details, such as the product they purchased, to make the interaction feel more genuine.
• Monitor SMS delivery and performance: It’s important to track key metrics to determine the performance of your SMS campaign. You can use an SMS calculator to evaluate the cost and weigh it against factors like open rates and return on investment. 
  
  By monitoring your transactional SMS campaign performance, you can compare the ROI with cost and refine your strategy based on what is working or not.

Benefits of transactional SMS

Due to increasing competition, businesses need reliable ways to communicate with customers. Investing in a transactional SMS solution can help meet this demand by providing instant updates on important transactions. 

Here’s why businesses should prioritize implementing transactional SMS marketing to elevate their customer communication strategy:

• Improves customer experience: Customers value being kept in the loop, especially for critical transactions. With transactional SMS services, you can notify customers instantly to make them feel more confident in their purchases. 
• Increases customer engagement: Regular, informative transactional SMS marketing messages can reinforce the brand’s presence in customers’ lives.
  
  When customers receive consistent real-time updates about their orders or account activity, it helps them stay engaged with the business. For example, a delivery notification or an appointment reminder can prompt customers to track their orders or confirm their bookings. 
• Supports multi-channel communication: Businesses can use SMS marketing vs. email marketing to provide updates. A transactional SMS solution can work for urgent or time-sensitive updates. Alternatively, emails are better suited for more detailed or less time-critical communication.
  
  Taking a multi-channel approach allows you to reach customers through their preferred method, ensuring no important message is missed.

How to get started with transactional SMS

Setting up transactional SMS services involves several steps, including selecting a reliable transactional SMS provider. 

You should also ensure that messages are optimized for efficient customer communication. Here, we’ll walk you through implementing transactional SMS campaigns for your business:

Step 1: Identify key use cases

The first step in getting started with transactional SMS is pinpointing the key use cases where SMS campaigns will add value to your business operations. 

Think about areas where you need to send time-sensitive information to customers. Common use cases include order confirmations, delivery updates, appointment reminders, password resets, and more.

For example, as an ecommerce store, you may send SMS notifications when an order is placed, shipped, and delivered. If you’re running a service-based business, you might use transactional SMS to confirm appointments or notify customers of cancellations. 

By identifying these use cases, you can ensure that transactional SMS fits naturally into your communication strategy.

Then, consider how these messages will affect customer experience. Transactional SMS should provide value to the customer by offering useful information. Don’t overwhelm them with unnecessary notifications. Focus on essential, real-time updates. 

Step 2: Choose a reliable SMS provider

The next step is to select a reliable transactional SMS provider that aligns with your business needs. There are so many options available, so it’s important to find one that offers the features that best support your goals. 

Consider a transactional SMS service provider with powerful automation tools, scalability, and integration capabilities with your existing systems. You should also evaluate the SMS provider’s reliability and compliance with local and international regulations. 

Remember, if your business operates globally, you need to choose a provider that supports international messaging so you can reach customers anywhere. 

Taking these factors into consideration, Omnisend can be a great SMS automation solution for ecommerce businesses. It can easily integrate with existing ecommerce platforms, allowing you to set up SMS campaigns, track performance, and set trigger-based transactional messages.

Step 3: Set up automated messages

Once you’ve chosen a bulk transactional SMS service provider, you’ll need to configure the platform to send messages automatically based on specific triggers. 

Begin by designing the messages you want to send for each use case, ensuring they’re personalized and relevant. 

It’s also important to ensure that your automated messages are aligned with your brand voice. Even though transactional SMS is often short and concise, keeping a consistent tone will help reinforce your brand’s identity. 

Many SMS marketing platforms, such as Omnisend, offer built-in and customizable automation workflows that allow you to trigger messages based on specific customer actions. For instance, when a customer makes a purchase, you can set up an automated message that confirms their order and provides tracking details. 

With automated transactional SMS messages, you can reduce the problem of delayed text messages and give real-time updates to the customers.

Step 4: Test and optimize your messages

Before sending the messages, it’s always better to test some elements, such as subject lines, message length, and call to action phrases, to see which version performs better. 

A/B testing is one of the most effective ways to identify which strategies work best. Over time, you can refine your message content and design based on the insights gathered from these tests.

In addition to A/B testing, regularly monitor SMS delivery reports to ensure that your messages are being successfully delivered. 

These reports will provide valuable insights into metrics like SMS message deliverability, open rates, engagement, and others. If you notice any patterns in delivery failures or poor engagement, you can consider adjusting your message content or timing. 

This ongoing monitoring and optimization process is essential to ensure the efficiency of your transactional SMS campaigns. 

Choosing a transactional SMS service provider

When selecting a transactional bulk SMS service provider, you must focus on several essential factors that can affect your SMS marketing campaign. Here are some factors to help you choose the right provider for your needs: 

• Essential features: A good transactional SMS service provider should offer core features that support your communication needs. 
  
  Look for real-time analytics and tracking to monitor the performance of each message and make necessary adjustments.
  
  Message scheduling is another useful feature to look out for. The ability to schedule messages in advance can help you plan and send messages at the most opportune times. 
  
  Additionally, there are SMS providers like Klaviyo or Omnisend that allow you to set up automated omnichannel workflows based on customer actions or triggers.
• API integration: For businesses that rely on multiple systems, choosing a provider with a strong API is essential. 
  
  A transactional SMS API allows integration with your existing business platforms, such as CRM tools, ecommerce sites, and others. With this integration, you can automate transactional messages without switching between different tools. 
• Customer support and compliance: Another critical factor to consider is customer support. A responsive support team can help resolve issues quickly, minimizing downtime or delays in message delivery. 
  
  Plus, compliance with regional regulations is a must when sending transactional SMS. Depending on the country or region, there are rules regarding message content, delivery timing, and opt-out options. 
  
  Ensure that the provider you choose is compliant with local laws to avoid fines or legal complications, which can add to your SMS marketing cost. 

Considering all of this, Omnisend makes for a solid choice, with its comprehensive SMS and email marketing solution. It offers powerful automation features that help businesses send transactional messages efficiently. 

With Omnisend, you can easily integrate SMS with your WooCommerce or Shopify store, ensuring that your transactional messages are sent automatically based on customer actions.

Common examples of transactional SMS

Businesses across various industries use transactional SMS to provide customers with real-time updates. Below are some common transactional SMS examples to enhance customer communication and experience:

Banking and financial services

In the banking sector, transactional SMS is used for various purposes, such as sending OTPs for secure login, account alerts, and transaction confirmations. 

These messages are vital in protecting sensitive data, preventing fraud, and ensuring customers stay informed about their financial activities. 

For example, One Bank Ltd provides real-time alerts on account balances, withdrawals, and other transactions through its SMS service:

This message helps customers keep track of their accounts, creating transparency. By offering instant updates, customers stay aware of their account status and can take immediate action if they detect any unauthorized transactions.

Ecommerce

Transactional SMS for businesses is the best way to keep customers informed about their purchases. Order confirmation messages are typically the first communication after a purchase, which could also be used as a strategy for SMS marketing for ecommerce. These SMS messages often include order details, payment confirmation, and an estimated delivery date.

As the package moves through the delivery process, customers are receives updates on the shipping status. Once the order is delivered, a notification is sent to ensure that the customer is aware their parce has arrived. 

These delivery messages are short and precise, focusing only on key details like time of delivery and any additional steps the customer may need to follow:

Healthcare

In the healthcare sector, transactional SMS helps patients stay on top of their appointments, prescriptions, and lab results. Appointment reminders are one of the most common SMS types, reducing no-shows and giving patients the flexibility to reschedule if needed. These messages include the date, time, and location of the appointment, as well as instructions on rescheduling. 

For example, Path Health sends patients SMS reminders for appointment scheduling for a medical screening:

By sending automated reminders, healthcare facilities can optimize their schedules and reduce last-minute cancellations. SMS alerts also serve as a discreet way to inform patients about lab results or remind them of prescription refills. This proactive approach enhances patient engagement and satisfaction with minimal effort.

Instead of waiting for a phone call, letter, or email, patients receive real-time alerts when results are ready. These SMS messages might include instructions on how to access results online or schedule a follow-up appointment with their doctor. 

Conclusion

Transactional SMS has become an indispensable tool for enhancing customer communication.

By providing real-time update, businesses can elevate the customer experience and strengthen customer relationships and interactions. 

As competition intensifies and customer expectations rise, integrating transactional SMS into your communication strategy is more important than ever. Best practices, such as concise messaging, personalization, compliance, and performance tracking can optimize your transactional SMS campaigns for maximum impact.

To harness the full potential of transactional SMS, it’s vital to choose a reliable service provider that aligns with your business needs. Start by exploring reliable solutions like Omnisend, which can offer customizable templates and powerful automation tools to help you get started with ease.

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