SMS vs. WhatsApp: What’s best for your business

SMS vs. WhatsApp: What’s best for your business

With so many communication channels available, how do you decide between SMS and WhatsApp for your business marketing messages? You might be thinking: SMS has great deliverability, but it doesn’t offer multimedia features. On the other hand, WhatsApp has more interactive capabilities, but it requires users to download and use a new app. 

The right choice for your business will depend on a variety of factors, including your audience, top use cases, and your budget. And who knows? Maybe the answer is a bit of both. 

Why messaging channels matter for your business

Consumers are very responsive to messaging, and for good reason, it’s a frequent way that we connect with friends and family. Because we use it to communicate with those we care about, both SMS and WhatsApp messages have an incredibly high open rate of 98%. Consumers also open messages very quickly, with 90% of SMS text messages read within three minutes.

This makes messaging a critical channel for timely information and provides businesses with an opportunity to have direct, one-on-one conversations with their customers. Both SMS and WhatsApp offer unique advantages for building stronger customer relationships. SMS, for example, is the staple of reliable and instant communication.

SMS: Reach customers instantly 

When it comes to SMS mass marketing, there are a few key reasons why businesses love SMS. 

Strengths of SMS

• Strong reliability: SMS works on every mobile phone, regardless of whether you’re using a smartphone or have internet connection. 

• High deliverability: SMS messages are delivered almost instantly, making them a great channel for time-sensitive communications.

• Low-friction: Because SMS is an automatic feature of a mobile device, users don’t need to download an application, making it super simple to use. 

Considerations with SMS

• Character limit: Messages are typically expected to be short in length, restricting complex content.

• Limited rich media: It’s primarily a text-only channel. Sending multimedia (MMS) is possible, but it is often more costly and less reliable internationally.

• One-way feel: While two-way SMS is an option, it often feels more transactional and less conversational than an app-based chat.

Best use cases for SMS

Because SMS is known for its speed and deliverability, businesses turn to SMS for time-sensitive alerts, notifications or marketing programs like ‘flash-sales’.

• Critical alerts: Reliably send two-factor authentication (2FA) or one-time passwords (OTPs), fraud alerts, and bank transaction notifications.

• Timely notifications: Deliver time-sensitive updates, like appointment reminders, delivery updates, or flight delay information. 

• Quick promotions: Flash sales, limited-time discount codes, or quick polls where the response is a simple text can be effective SMS marketing use cases. 

WhatsApp: A more interactive channel

WhatsApp, with over three billion users globally, offers capabilities that enable a rich, interactive, and personalized conversation.

Strengths of WhatsApp

• Rich media and interactivity: Send images, videos, PDFs, location, interactive list messages, and call-to-action (CTA) buttons, providing an engaging experience.

• Enhanced trust and security: Features like a green checkmark display business account verification, while end-to-end encryption builds customer trust.

• Two-way conversations: Make the most of two-way chat, whether it’s with an automated chatbot, human agent, or quick reply options. 

Considerations with WhatsApp

• Internet dependency: Users must have a smartphone and downloaded the app.

• Template approval: Businesses need to use pre-approved message templates for outbound, non-customer-initiated messages, which requires some planning and preparation.

• Regional preferences: Whereas WhatsApp is a preferred channel in several regions around the world, it’s not as widely used in some major markets such as the US.

Best use cases for WhatsApp

WhatsApp shines with its multimedia features, allowing companies to build tailored message flows, including abandoned cart reminders, purchase suggestions, or customized discounts.

• Personalized marketing: Share product catalogs, targeted offers with images/videos, and personalized recommendations.

• Conversational commerce: Guide customers through the sales process by making it easy to book appointments and offering in-chat purchases.

• Customer support and service: Real-time help with the ability to share media for troubleshooting, such as sending a picture of a damaged product.

  SMS vs. WhatsApp

Key factors for choosing the right channel 

The decision isn't just about features; it’s about a strategic fit. Your ideal audience, use case, and cost will all help determine whether you choose SMS or WhatsApp. 

Audience location and preferences

WhatsApp dominates in regions like LATAM (Latin America), India, and Southeast Asia, where it’s the primary communication method. In contrast, SMS maintains a stronger hold on critical, high-reliability notifications in regions like North America and some parts of Europe. Your choice should align with where your customers are and what app they check most frequently.

Type of message

• Critical, one-way messages: For time-sensitive, text-only alerts like OTPs, fraud warnings, or delivery notifications, SMS offers delivery and speed.

• Promotional messages and customer conversations: For promotions, in-depth surveys, or detailed support, WhatsApp’s rich media and conversational design offers an intriguing option for more involved communications. 

Regulatory considerations and compliance

When you send SMS and WhatsApp messages, you’re sending to a personal device and to apps that are often used for conversations with family, friends, and loved ones. In short, you’re entering a personal space. To protect this personal space, US regulations like the Telephone Consumer Protection Act and carrier-specific guidelines have been instated for SMS. Failing to meet these standards can result in fines, blocked messages, and reputation damage. 

WhatsApp may not have the same legal ramifications (WhatsApp messages do need to follow GDPR where applicable), but Meta’s robust messaging policy overlaps with many of the compliance requirements for SMS. 

Here are a few compliance best practices to build strong relationships with your customers. 

• Opt-ins are a must: Customers need to provide their consent to receive SMS and WhatsApp messages. 

• Opt-outs need to be seamless: Provide an opt-out statement in SMS messages, such as “Reply STOP to unsubscribe,” and readily comply with opt-out requests in WhatsApp. 

• Prioritize relevant, valuable conversations: If you’re entering a consumer’s personal space, make sure it adds value to their experience with your brand.

Integration needs and automation capabilities

The integration and automation options for the two channels reflect their complexity.

SMS integration needs and automation:

• Simple API: Integration is typically straightforward, requiring a simple API connection, like Twilio’s Programmable Messaging API. 

• Basic automation: Automation is supported with functions such as scheduled sends, basic auto-replies, time-sensitive alerts (e.g., two-factor authentication codes), hyperlink shorteners with click tracking, and more.

WhatsApp integration needs and automation:

• Simple API, but more setup: You can set up WhatsApp using the same core Twilio’s Programmable Messaging API. WhatsApp requires additional setup steps, including template pre-approval by Meta.

• Advanced automation: WhatsApp can support much more complex automation, such as chatbots that manage multi-step customer service or sales conversations.

Cost and ROI of WhatsApp and SMS

The cost and ROI for both channels are primarily usage-based, though the specific pricing models differ significantly, directly impacting business return.

Twilio SMS cost and ROI:

Cost: Uses a pay-per-message model, plus charges for the phone number (long code, short code, or toll-free). This model is low-cost per message and transparent, though global traffic can be more expensive due to international rates.

ROI: Because SMS is great for use cases like OTP or appointment notifications with a high deliverability and view rate, the low transactional cost results in a clear ROI.

Twilio WhatsApp cost and ROI:

Cost: Includes a per message fee categorized by conversation type (Utility, Service, Marketing, Authentication) and Meta pass-through fees.

ROI: The higher per-conversation cost is justified by reaching people on their preferred channel in certain regions as well as interactive experiences that engage customers. WhatsApp's rich media and conversational nature drive sales and self-service support, leading to a more satisfied customer. 

Messaging ROI with Twilio

Messaging, in general, can have a positive impact on your business’ bottom line. In fact, a commissioned study conducted by Forrester Consulting found Twilio Messaging (which includes SMS, WhatsApp, Conversations API, and RCS) provided:

• 132% ROI for customers

• 3% increase in messages delivered

Whether you choose WhatsApp or SMS, engaging with your customers via direct, one-to-one messaging is a great way to drive business outcomes. 

Why not both? Omnichannel campaigns with Twilio

The optimal strategy for most growing businesses is to reach customers on their preferred channels.

Multichannel: This approach will help you align with customer preferences. Ninety-one percent of consumers expect brands to communicate using their preferred channels, and by identifying your customers’ favorite communication methods, you can improve customer satisfaction while increasing conversions. Consumers are willing to spend 32% on brands that use their preferred channels, and 40% of consumers say they are more likely to make repeat purchases when brands use their preferred channels.

Begin using RCS: You could also use Rich Communication Services (RCS) to further engage customers. RCS allows brands to send verified messages with rich media, like buttons and carousels, within your phone’s native messaging app like SMS. This enables brands to reach those who don’t typically use WhatsApp with more engaging messages. 

What’s more is you can manage this entire messaging ecosystem from a single interface using Twilio’s platform. Twilio provides a cloud-based API that enables businesses to programmatically send and receive SMS and WhatsApp messages. Twilio takes care of the back-end delivery of the messages, so you can focus on starting conversations and fostering relationships with your customer base. 

The best of both worlds: SMS and WhatsApp

SMS provides the bedrock of universal reach and instant reliability, while WhatsApp offers the conversational depth and rich media necessary for modern customer engagement and ecommerce.

To begin building your unified messaging strategy, explore Twilio’s Programmable Messaging API and seamlessly integrate SMS and WhatsApp into your operations.

FAQs: SMS vs. WhatsApp for your business           

Q: Is WhatsApp for Business more secure than SMS?

A: WhatsApp provides end-to-end encryption for messages, meaning only the sender and recipient can read them. SMS messages are not encrypted by default and can be more vulnerable to interception. However, Twilio offers security features like SMS Pumping Protection and Verify to combat fraud and ensure only legitimate messages are sent. 

Q: Can I personalize messages on both SMS and WhatsApp for Business?

A: Yes, you can personalize messages on both. On SMS, personalization is often limited to basic variables like the customer's name, appointment time, or a unique coupon code. On WhatsApp, you can achieve much richer personalization by including dynamic media, interactive buttons tailored to the user's last action, or even a personalized product catalog.

Q: Can I automate customer interactions on both channels?

A: Yes, but the level of automation differs. SMS automation is typically limited to scheduled sends and basic, keyword-triggered auto-replies. WhatsApp can support chatbots and flows that manage complex, multi-step customer service or sales conversations without human intervention.

Q: What are the key differences in API integration capabilities between SMS and WhatsApp for Business?

A: Twilio's platform allows you to use similar logic for sending a message over both channels from a single API. However, WhatsApp includes additional capabilities for interactive messaging (buttons, lists), template management (for approved outbound messages), and specific read/delivery receipts, which aren’t natively supported by SMS APIs.

Q: What analytics and reporting capabilities do SMS and WhatsApp for Business offer for tracking customer engagement?

A: Both channels provide core metrics like delivery, click-through, conversion, and unsubscribe rates. However, WhatsApp offers more robust engagement metrics, like read receipts or button clicks, because it offers rich features.