Differences Between Promotional, Transactional & OTP SMS | How to Set It Up

SMS is evolving into a crucial channel of business communication for a variety of reasons. The world is becoming more mobile-friendly as more and more people use their smartphones for daily communication and transactions. SMS is a popular and practical way for businesses to communicate with their customers because it is a mobile-friendly communication technique. Consumers today expect businesses to communicate with them in a personalized way. SMS messaging allows businesses to send customized messages to their clients, strengthening relationships and increasing client satisfaction. SMS messaging enables businesses to interact with customers in real-time. For information that must be received right away, such as discounts, promotions, and event reminders, this is essential. Comparing SMS messaging to other forms of communication like direct mail or advertising, businesses can communicate with their customers for less money. As was already mentioned, SMS messages have a high open rate of 98%, so businesses can be confident that their customers are seeing their messages.

In this article we would learn about the differences between promotional, transactional and OTP SMS services.

Difference between Promotional, Transactional & OTP SMS

Promotional SMS

A promotional SMS is one that advertises a business’ products, services, or brand. Promotional SMS messages frequently include information about sales, deals, events, or promotions and are sent to a large audience.

Businesses can reach out to a specific audience or their current clients with promotional SMS messages. These messages are used by businesses to broaden their brand, increase sales, and raise awareness.

To send promotional SMS messages, businesses must use a bulk SMS service provider that enables them to send a lot of SMS messages at once. These service providers offer features like message scheduling, message personalization, and message tracking to help businesses streamline their messaging strategies and improve outcomes.

The following industries/businesses would benefit from using promotional SMS

• E commerce: Store events, sales, and promotions can be announced to customers via promotional SMS, and retailers can also provide special deals and coupons.
• Hospitality: To inform customers of special events, promotions, and discounts on lodging, meals, and services, hospitality businesses like hotels and restaurants can use promotional SMS.
• Healthcare: Hospitals and clinics can use promotional SMS to offer discounts on services, remind patients of upcoming appointments, and provide health advice.
• Fitness: To inform customers of special classes, promotions, and discounts on memberships or training sessions, fitness businesses like gyms and personal trainers can send out promotional SMS.
• Education: Schools and tutoring services, among other educational businesses, can use promotional SMS to alert students to upcoming classes, tests, and assignments as well as to provide discounts on tuition or study aids.
• Beauty: Spas and salons that are in the beauty and wellness industry can use promotional SMS to alert customers to new services, sales, and promotions on goods and services.

Overall, using promotional SMS can be advantageous for any company looking to quickly and affordably connect with customers.

Applications of Promotional SMS

Let us look into the major applications of promotional SMS

Promotional SMS to announce a product launch

Sending promotional SMS to bulk leads to announce the launch of new products or features is an effective way to connect with potential customers and generate interest in your offerings. 

Here are some things to consider doing:

• Segregate your leads: Divide your leads into groups based on their traits, preferences, and actions to start segmenting your leads. This will improve your chances of receiving feedback and assist you in directing your messages towards the right group of people.

• Craft compelling messages: Construct a persuasive message that is clear, understandable, and concise. Use plain language, highlight the benefits of your product or service, and include a call-to-action (CTA) that encourages readers to take some sort of action.
• Create a detailed message: To make your message more relevant to each recipient, use names when addressing your leads and include personalization tokens. This will increase the possibility of conversion and aid in grabbing their interest.
• Choose a reputable SMS service provider: Choose an SMS service provider with a good reputation who can handle bulk messages and ensure timely delivery. Verify the provider’s standing in the industry and that it abides by all relevant laws. 
• Schedule your message sendings: Choose the best time to send your messages based on the routines and time zone of your target audience. Sending messages on the weekends or after hours may lessen the likelihood that you will receive a response.
• Test and optimize your messages: Keep an eye on the response rate of your messages and modify your approach as necessary. To determine what works best for your audience, experiment with various message formats, CTAs, and sending times.

Sending customized Industry-Specific messaging relevant to target groups using promotional SMS

Use promotional SMS to send targeted, sector-specific messages to your target audiences to boost the effectiveness of your marketing campaign. Here are some things to consider doing:

• Choose your target markets: Determine the various audiences that your messaging is intended to reach before anything else. This group could include clients, potential clients, or other people working in your sector.

• Segment your target audiences: After you’ve established who your target audiences are, divide them into groups according to their traits, passions, behaviors, and other important factors. This can be used to create tailored messaging that resonates with each group.

• Craft industry-specific messages: Depending on each target group’s industry or profession, create messaging that is pertinent to that group. Emphasize the advantages of your product or service for their particular needs while using language and terminology that are specific to their industry.

• Personalize your messaging: To make your messaging unique for each recipient, use personalization tokens. Include their company name or other pertinent information, address them by name, and cater the content to their particular needs or interests.

• Include a call to action (CTA): To encourage readers to take the desired action, such as visiting your website, buying something, or signing up for a free trial, include a clear CTA in your messaging.
• Test and optimize the messages: Enhance your messaging by keeping an eye on the response rate and modifying your strategy as necessary. To determine what works best for each target audience, experiment with various messaging formats, CTAs, and sending times.

Advantages and disadvantages of Promotional SMS:

Short Message Service (SMS) advertising can be a powerful marketing tool, but like all marketing channels, it has benefits and drawbacks. 

The following are some of the main benefits and drawbacks of promotional SMS:

Advantages:

• High open rates: Since most people read their text messages within a few minutes of receiving them, promotional SMS messages typically have a high open rate.
• Cost-effective: Promotional SMS can be comparatively cheap when compared to other marketing channels like print or TV advertising, making it an affordable choice for small and medium-sized businesses.
• High response rates: Since promotional SMS messages are frequently time-sensitive, they can persuade recipients to act right away, like buying a product or signing up for a service.
• Customizable: To make promotional SMS messages more interesting and pertinent, you can add the recipient’s name, location, or other pertinent information.

Disadvantages:

• Message length restriction: Since promotional SMS messages are only allowed to contain 160 characters, it can be difficult to communicate a complex idea or a lot of information.
• Opt-in requirement: Promotional SMS messages are subject to opt-in requirements, so businesses must obtain customers’ permission before sending messages. The size of the target market might shrink as a result, forcing businesses to compile a list of contacts who have given their consent.
• Spam complaints: If recipients feel they are receiving an excessive number of promotional messages or messages that are irrelevant to them, they may mark SMS messages as spam. This may result in fines and harm to the sender’s reputation.
• Mobile device restrictions: Not all mobile devices can receive SMS messages, though some might be preconfigured to do so. Because of this, it might be more difficult to reach some target audiences and the reach of promotional SMS messages may be constrained.

Overall, when used effectively, promotional SMS can be a potent marketing tool, but it’s important to weigh the benefits and draw conclusions before developing a strategy that works for your business’s goals and target audience.

Transactional SMS

Transactional SMS are texts that clients or users receive from businesses or service providers informing them of critical or urgent information relating to a transaction they have already started with the client or provider. These alerts are frequently triggered by specific occurrences or actions, such as a customer placing an order, making a purchase, or changing their password.

Unlike promotional SMS, which are used to advertise products or services to a large audience, transactional SMS are used to send transaction-related information to a specific person or group of people. 

Since transactional SMS are frequently sent from a business or service provider to a customer’s mobile device, they must abide by specific privacy and security rules and guidelines. Because they are frequently urgent and important to the customer, these messages are frequently sent directly to their phone with high deliverability and open rates. Now a days there are lot of call center software solution providers are integrating these SMS feature with in the platform.

The following industries/businesses would benefit from using transactional SMS:

• Order confirmation and delivery updates: Transactional SMS can be utilized to confirm orders, offer shipping or delivery updates, and alert clients to any delays or modifications to their order status. 
• Account updates and verification: Transactional SMS can be used to update a user’s password or other account information, verify the user’s account information, and alert them to any suspicious activity or changes to their account status.
• Reminders for appointments: Transactional SMS can be used to inform clients of upcoming appointments or services, as well as to remind them of any necessary instructions or information. 
• Payment and transaction updates: Transactional SMS can be used to inform customers of any billing questions or discrepancies, confirm that a payment has been received or processed, and provide information on refunds or cancellations.

Transactional SMS for the various businesses:

• E-commerce: E-commerce businesses can use transactional SMS to confirm orders, give shipping updates, and notify customers of any changes or issues relating to their orders.
• Banking and financial services: Businesses in the banking and financial services sector can notify customers via transactional SMS of any improbable activity or changes to the status of their accounts, as well as to confirm transactions and provide account updates.
• Healthcare: Clinics and hospitals can use transactional SMS to send appointment reminders, test results, and wellness tips to their patients.
• Travel: Organizations involved in the travel industry, such as hotels and airlines, can use transactional SMS to confirm reservations, offer discounts or upgrades, and give customers travel updates.
• Education: Institutions of higher learning, like colleges and universities, can use transactional SMS to inform students of changes to their schedules or activities as well as updates on assignments and exams. 
• Service providers: Transactional SMS can be used by service providers like utilities, telecom, and internet service providers to inform customers about billing and payments, service updates, and alerts about outages or disruptions. 

Overall, using transactional SMS can be advantageous for any business that must convey critical information about a transaction or service. But it’s crucial to make sure the messages are timely, pertinent, and in accordance with all applicable laws and policies.

Advantages of transactional SMS:

• Fast and reliable: Transactional SMS are delivered instantly to the customer’s phone and have high deliverability and open rates. By doing this, it is made sure that the client receives urgently needed information.
• High engagement: Transactional SMS have high engagement rates, meaning that a sizable portion of recipients open and read them. This could lead to greater customer loyalty and satisfaction.
• Cost effectiveness: Transactional SMS are frequently more cost-effective than other forms of communication like phone calls or mail. Therefore, they are a popular choice for businesses looking to engage customers on a tight budget.
• Customizable: Transactional SMS, can be customized to share updates such as order details, appointment times, or account updates. As a result, they become more pertinent and beneficial to the customer.
• Compliant: Particular privacy and security-related laws and regulations apply to transactional SMS, which enables businesses to send secure and compliant messages.

Disadvantages of transactional SMS:

• Limited marketing potential: Because transactional SMS are intended to provide transaction-related information to a specific person or group of people and are not appropriate for marketing or promotional activities, they have limited marketing potential.
• Opt-in requirements: Prior to sending transactional SMS, businesses may need to obtain explicit opt-in consent from customers. This may limit the number of clients who are able to receive these messages.
• Short message length: Only 160 characters are allowed in transactional SMS messages, making it difficult to fit all the information you require in a single message.
• Only available on mobile: Because transactional SMS can only be accessed by mobile phone users, it may be harder for businesses to reach customers who do not use mobile devices.

In general, businesses that want to provide customers with urgent and important information about a transaction or service may find that transactional SMS can be a useful communication tool.

OTP SMS

OTP SMS stands for One-Time Password SMS. It is a form of transactional SMS that is used to send a unique and transient password or code to a user’s mobile device. Online banking, account login, and other verification and authentication processes all frequently use OTP SMS.

When a user requests an OTP, a unique password or code is generated and sent via SMS to the user’s mobile device. By entering the OTP into the required field on the website or app, the user then completes the verification or authentication process. Because OTPs are temporary and can only be used once, they provide an additional layer of security and aid in preventing unauthorized access to user accounts.

OTP SMS typically have a short expiration time that can range from a few minutes to several hours, depending on the specific use case. The likelihood of the OTP being intercepted or used maliciously by someone other than the intended recipient is decreased as a result.

Advantages of OTP SMS:

• Security: OTP SMS adds an additional layer of defense for user accounts and transactions. Because the password or code is temporary and can only be used once, accessing user accounts is more difficult for hackers and unauthorized users.
• Convenience: OTP SMS is a convenient way to verify and authenticate user accounts and transactions because it enables users to receive the password or code on their mobile phones without the need for additional hardware or software.
• Cost-effective: OTP SMS is a cheap way to provide users with one-time passwords or codes because it doesn’t need any extra hardware or software.
• Versatility: OTP SMS can be used for a wide range of operations, including online banking, e-commerce, and account login procedures.

Disadvantages of OTP SMS:

• Short lifespan: OTP SMS have a short expiration time, ranging from a few minutes to several hours, which can create inconvenience for users if they do not enter the password or code in a timely manner.
• Dependence on mobile networks: OTP SMS depends on the availability and dependability of mobile networks, which can be impacted by a number of variables including network congestion, signal quality, and location.
• Limited reach: Because OTP SMS can only be accessed by people who have mobile phones and can receive SMS messages, businesses that are trying to reach customers who do not use mobile devices may find that their message distribution is limited.
• Security concerns : Phishing attacks, SIM swap fraud, and other forms of social engineering are security risks that OTP SMS is susceptible to.

Overall, the high open and deliverability rates make sure the user gets the password or code for OTP SMS as soon as possible. OTP SMS is delivered straight to the user’s cell phone.

Here are some suitable businesses for using OTP SMS:

• Banking and financial services: Banks and financial institutions frequently use OTP SMS to authenticate transactions, verify user accounts, and prevent fraud.
• E-commerce: E-commerce websites use OTP SMS to authenticate transactions, confirm user accounts, and prevent fraudulent activities like credit card fraud.
• Healthcare: Healthcare providers use OTP SMS to verify user identities and protect sensitive patient data.
• Government Agencies: Government agencies use OTP SMS to authenticate users and prevent fraudulent activities like identity theft and tax fraud.
• Travel and hospitality: OTP SMS is used by these industries to authenticate reservations and prevent illegal activities like credit card fraud
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• Education: Educational institutions use OTP SMS to authenticate online exams and assessments and to confirm user accounts.

Overall, any business that needs secure and practical verification or authentication of user accounts, transactions, or sensitive information may benefit from using OTP SMS.

In conclusion, the mobile-friendly world, the demand for personalized and real-time communication, the cost-effectiveness of SMS messaging, and the high open rates of SMS messages all contribute to the growing need for SMS as a communication channel for businesses. SMS messaging will be a crucial business communication channel as companies continue to adjust to shifting customer needs and preferences.