Do we not feel that it is enough, post being bombarded by brands with offers on our phones and this is not even a regular run-of-the-mill text message but rather on WhatsApp. And then there are also times, when we all want to be informed by brands with order status pings and promo pop-ups. Instant connectivity and personalised interaction is one of the key aims for businesses to engage with customers. But the question which remains is in the battle between SMS and WhatsApp which will emerge as the real winner. “As businesses globally navigate the complexities of customer relationship management (CRM), the choice between WhatsApp and SMS is a critical decision. While WhatsApp’s popularity in the digital communication space is undeniable, its application in CRM, particularly for small to medium-sized enterprises (SMEs), is often challenged by its cost structure.Whatsapp marketing is better only for high ticket value products and services as it offers a pay-per-conversation model and is extremely expensive as compared to an SMS. On the other hand, SMS works great for discount and sale campaigns which are time related,” Advit Sahdev, digital marketing and performance marketing expert, said.
As per market intelligence platform Statista, ad spending in the SMS advertising market is projected to reach $0.79 billion in 2024 while total spending on WhatsApp’s business platform is expected to amount to $3.6 billion by 2024.
An email sent to Meta India remained unanswered till the time of publishing this story.
The battle is on!
Interestingly, industry experts opine despite a battle, and Meta-owned WhatsApp being a new-age tool, SMS still hasn’t lost its relevance completely. SMS still holds its importance as a secure communication channel. For compliance reasons, particularly in the financial services sector, it remains indispensable for OTPs and other notifications. Furthermore, SMS is also a reliable failover option, especially in areas with limited data connectivity. It is used for delivering urgent messages and transactional alerts, ensuring widespread reach even in remote corners. “The introduction of Rich Communication Services (RCS) enhances the SMS experience, offering rich media messaging and conversational capabilities on native SMS channels. On the other hand, WhatsApp, with its surge in popularity, has become a hub for business-initiated interactions, excelling in marketing, support, and even facilitating purchases. The two-way engagement on WhatsApp, coupled with its ability to demonstrate tangible ROI from marketing efforts, sets it apart,” Shradha Thapa, regional head – OTT India, Infobip.
To be sure, the role is now being demarked. Experts believe SMS, with its simplicity and compatibility across devices, has become a staple in CRM (Customer relationship management). “SMS is well-suited for delivering brief and time-sensitive messages, such as appointment reminders, order confirmations, order tracking information, and concise promotional offers, one-time-passwords owing to its direct and immediate nature,” Tanisha Doshi, director – growth and strategy, WebEngage, said.
Although promotional data from various states that SMSes exhibit a modest conversion rate of 0.17%, those influenced by lifestyle demonstrate a higher rate of 0.46%. Notably, contextual and personalised SMS messages contribute to a remarkable 2.71 times growth in conversion rates while WhatsApp with its multimedia capabilities, is believed to be beyond text messaging. It allows users to share photos, videos, and documents. This includes activities such as product demonstrations, customer support interactions, and the sharing of longer-form content. “For an optimal strategy, I recommend opting for a mixed channel approach with appropriate budgets allotted to each communication channel. WhatsApp’s user-friendly interface makes it a better platform for CRM. Thus, businesses can offer quicker & more efficient services to customers which adds to their credibility and ultimately helps in brand building. On the other hand, SMS service remains effective in areas with weaker internet connectivity. Therefore, leveraging both WhatsApp and SMS within a well-structured communication strategy can maximize outreach and engagement while catering to diverse consumer needs,” Rajat Abbi, VP– global marketing India, chief marketing officer – Greater India, Schneider Electric, explained.
Game of engagement and reliability!
While assessing the reception of messages on SMS and WhatsApp, several factors come into play. It is believed that SMS boasts a high open rate and immediate delivery, while WhatsApp’s features and user-friendly interface often lead to higher engagement rates. “Media sharing options, interactive features, and real-time engagement possibilities within WhatsApp redefine the very essence of customer interactions. Unlike SMS, WhatsApp allows businesses to seamlessly integrate multimedia content, allowing them to craft compelling and visually appealing messages that resonate with consumers,” Mehernosh Pithawalla, executive vice president and head of brand and strategic insights, Godrej & Boyce, said.
In terms of meeting business goals within the Indian market, industry experts opine that WhatsApp is frequently favoured over SMS. Moreover, it is believed that the widespread popularity of WhatsApp in India, coupled with its extensive user base, positions it as a tool for establishing and consistently reinforcing brand identity. “While promotional SMSes are effective for spreading the word about transactions, seasonal discounts, and other offers, resulting in an average open rate of 47.87%, data from Verloop.io suggest that businesses leveraging WhatsApp experience a 70% increase in customer satisfaction and subsequently in customer retention compared to SMS-based communication,” Doshi highlighted.
As per a Webengage report, promotional WhatsApp campaigns yield a conversion rate of 0.25% while businesses witnessed an enhancement in conversion rates, reaching up to 3.79 times higher at 0.96% when employing personalised and contextual WhatsApp campaigns.
However, the effectiveness of WhatsApp versus SMS in CRM depends on the specific goals and preferences of the business. “WhatsApp excels in fostering rich, interactive conversations, while SMS remains a reliable and widespread channel for quick and straightforward communication. SMS boasts a broader reach, as virtually all mobile devices support SMS, ensuring wider demographic accessibility. Choosing between the two hinges on the nature of the communication desired – whether it demands multimedia engagement or streamlined efficiency,” Avanish Agarwal, CMO, SMAAASH, said.
Typically, it is believed that in case of CRM, the major goal is not just return-on-investment (ROI), but also a lasting and engaging direct relationship with customers. However, the ultimate goal remains conversion. From a cost perspective, SMS and WhatsApp present different financial implications for businesses. Industry experts opine that in the Indian market, WhatsApp campaigns often present a cost advantage over SMS in the realm of CRM-focused outreach as WhatsApp only charges for delivered messages, unlike SMS where charges still apply for undelivered messages (due to factors like inactive numbers). “In terms of cost, SMS is pricier than WhatsApp. Furthermore, from an ROI perspective, WhatsApp provides a superior return on engagement with read receipts, making it a more favourable choice for businesses. However, SMS holds its ground by reaching areas with limited Internet connectivity, offering wider coverage,”Abbi of Schneider Electric, said.
Furthermore, industry estimates reveal that sending contextual and personalised SMS messages instead of generic promotional campaigns can lead to a 1.3 times growth in open rates, 1.82 times growth in clickthrough rates, and a 2.71 times growth in conversion rates. Similarly, for WhatsApp, employing personalised approaches results in 1.11 times growth in open rates, 2.87 times growth in clickthrough rates, and a 3.79 times growth in conversion rates.
With the release of Android 14, Rich Communication Service (RCS) has become the talk of the town in the game of messaging. According to experts, RCS can replace standard SMS, with enhanced features such as multimedia messaging, group chat and read receipts. However, the adoption of RCS is still in its early stages, with ongoing debates between Android and Apple regarding universal support. “RCS provides a more convenient platform for businesses, with added benefits such as account verification and read receipts. Some brands, particularly in the banking sector, are experimenting with RCS to enhance customer engagement,” Agarwal said.
It is further believed that the emergence of RCS adds a layer of uncertainty to the future of messaging platforms when it comes to CRM strategies. “It’s worth noting that, as a channel incurring higher costs, businesses can benefit by using WhatsApp judiciously, reserving it exclusively for personalised campaigns. Brands should also be mindful that promotional messages on WhatsApp are more expensive than personalised campaigns, but they often yield greater engagement,” Doshi opined.