CPaaS explained: What, why, and how

How businesses are using Communications Platforms as a Service to create superior omnichannel customer experiences

How businesses are using communications platforms as a service to create superior omnichannel customer experiences.

CPaaS explained: What, why, and how

Many businesses are seeking ways to improve their customer service and outshine competitors. That makes Communications Platform as a Service — CPaaS — a game-changing tool for optimizing business processes and creating a unified customer experience.

In Twilio’s 2022 State of Customer Engagement Report, 56% of consumers said they would outright stop doing business with a brand after a bad experience. The message has always been clear — customers prefer simple, unique experiences that meet their needs and don’t disrupt their routines.

From online shoppers to healthcare patients, every interaction with a brand can have a huge impact on their satisfaction and lifetime value.

If you’re just learning about CPaaS, this article is designed to get you started on the basics:

  • What it CPaaS?
  • Why do companies need CPaaS?
  • How is it used to build new and more complex customer communications experiences?

CPaaS defined: Communications Platform as a Service

CPaaS is a cloud-based platform that embeds real-time communications channels directly into business applications. It uses application programming interfaces (APIs), software development kits (SDKs), integrated development environments (IDEs), and documentation to add as few or as many different communications capabilities as desired onto a business’s apps and services. These include but aren’t limited to:

  • Messaging — SMS/MMS/toll-free
  • Messaging — Over-The-Top (OTT) channels (like WhatsApp and Messenger)
  • Messaging — conversations (multi-party, multichannel)
  • Voice calling — VoIP, PSTN, & SIP trunking
  • Video calling — P2P, group rooms, & interactive livestreaming
  • Email — transactional & marketing emails
  • Low-code/no-code — visual builders
  • Verification/identity — one-time passcodes, strong customer authentication, line-type lookup

Basically, CPaaS takes away barriers between businesses and their customers so they can interact where and when it will bring the most value to their experience. Think of ride-sharing apps that send SMS notifications when the driver has arrived, or healthcare offices that send appointment reminder texts to patients. The speed and simplicity of these interactions make for an overall positive customer experience — building loyalty and encouraging more engagement.

UCaaS and CPaaS: What’s the difference?

You may have heard of Unified Communications as a Service (UCaaS). It’s another cloud-based communications solution similar to CPaaS, but with a few key differences. Most notably, UCaaS is primarily used for internal employee communications, while CPaaS is centered around enabling external customer communications.

Additionally, UCaaS platforms tend to be one-size-fits-all, often with hefty upfront costs. CPaaS, in comparison, is customizable and less cost prohibitive by only requiring users to pay for what they need. They can add channels as needed and integrate them with existing or custom applications. The result is a scalable and flexible platform, which is key for organizations that regularly face unpredictable changes and expenses.

Why do companies need CPaaS?

Today, customers who have a negative buying experience can easily turn to another brand. Given how easy it is to switch brands, customer experience (CX) is becoming a key differentiator for many businesses. This makes CPaaS a powerful tool for enabling strong communications and ultimately better experiences.

How a company communicates — or fails to communicate — with its customers can hugely affect brand loyalty. According to Twilio’s 2022 State of Customer Engagement Report, common frustrations turning customers away include:

  • Customers can’t connect with someone from customer support
  • Service representatives aren’t aware of the customer’s history
  • Lack of personalization in interactions
  • Customers struggle to locate important information

CPaaS solves many of these issues by helping businesses customize a communications framework that fits the needs and preferences of their unique customer base. By adding the right channels in the right places and managing them from a unified workspace with orchestrations and automations, businesses can offer unique, personalized communications that continually strengthen the buyer-seller relationship — and hopefully stop customers from checking out the competition.

This kind of omnichannel automation is useful beyond an e-commerce setting. CPaaS serves a range of industries with customer-facing needs, including:

  • Healthcare
  • Nonprofit organizations
  • Retail
  • Real estate
  • Travel and hospitality
  • Education
  • Insurance
  • Banking

How is CPaaS used to build better customer experiences?

With a CPaaS solution, you choose the tools you need and manage them from a single platform. In IT, orchestrations, automations, technical support, and machine intelligence work in the background to speed up and simplify processes that used to be mind-numbingly complex.

CPaaS offers benefits across the organization, which means it serves a purpose for multiple consumer-facing teams. Leaders use their CPaaS omnichannel capabilities to pick and choose the communications experiences that have the most impact in their part of the customer lifecycle.

  • Marketing leaders build personalized marketing experiences that speak to consumers’ unique needs. Deliver targeted messaging on preferred channels like SMS, email, and push.
  • Product & engineering leaders verify identity and prevent fraud with account verification. Send automated alerts and notifications, and enable conversational messaging. Build real-time video calling applications that keep groups engaged directly in their app.
  • Customer experience leaders create accessible customer service with contact centers. Employ IVR and bots to offer 24/7 assistance. Update customers with relevant, multichannel notifications.

Despite CPaaS’s many uses, not all vendors offer every kind of channel or the same level of reliability. Always consider the platform’s scalability, geographic complexity, and automations. These play a huge role in making sure channels remain fast, open, and secure. In that way, the customer experience is protected from common issues like network outages and regulations.

CPaaS: Complicated investment or must-have tool?

It’s true that Communications Platform as a Service is still slightly unknown — which means there are a few inaccurate assumptions that could be made.

There’s a misconception that using a CPaaS platform requires having tons of technical know-how. In truth, CPaaS is extremely easy to implement and use. Even marketers, who don’t need to be tech wizards, find it easy to add CPaaS functions into their tasks.

As we see it, CPaaS is far from a passing fad. And the market agrees. According to Gartner’s Market Guide for Communications Platform as a Service, 95% of global and 40% of midsize enterprises will be using API-enabled CPaaS services by 2025. Their goals? To support their digital transformation, boost competitiveness in the market, and enable better customer communications.

Optimized customer communications features for all

Some unified communications technologies are too costly for anyone but enterprise businesses. CPaaS is an affordable alternative that even small businesses can take advantage of. Many organizations will start with one channel, then add more as they begin to see the benefits and discover new ways of creating meaningful communications experiences.

In a way, CPaaS has democratized communications for businesses of all sizes. Instead of requiring a big upfront investment, businesses typically pay less expensive rates for CPaaS based on usage. For example, they might pay per message or call minute. This gives them the huge benefit of being able to try different channels and find the ones that foster the most engagement. They can test, tweak, optimize, and scale experiences quickly, without risking a large investment in a channel that doesn’t work for them.

As the CPaaS market continues to see incredible growth, Twilio remains a clear leading provider. We’ve been CPaaS innovators since the beginning. Today, we’re sending over 180 billion messages per year and helping businesses protect and serve their users with speed and security.


Learn how our leading CPaaS solutions help businesses provide superior customer experiences with less technical complexity

Talk to sales