The Future Of SMS And Text Messaging: Superpowers Of Conversion And Engagement

Felix Heckmann

Often I scratch my head and wonder, “How relevant is SMS in 2018, which also marks the 25th birthday of text messaging?”

Looking at my SMS inbox, my gut feeling is that SMS is still relevant. Could it just be me, blindly and deeply attached to text messaging as a mobile messaging industry veteran of fifteen years?

The data says no, it’s not just me.

While numerous studies can be cited, nearly all of them boast an open rate of over 90% when it comes to SMS, and most of those are opened within the first three minutes. Despite these powerful numbers, most businesses aren’t utilizing text messaging to engage or communicate with their customers.

Those statistics look like a good reason to have a birthday celebration of SMS rather than a revival party.

SMS: Almost dead or alive and kicking?

Remember how it all started, and how disruptive SMS was at the time? While the initial takeoff for messaging was slow, in 1995 when the first predictive texting was introduced based on typed letters, messaging volumes started to ramp up. It took another five years for SMS to finally take off for good, and by early 2000, text messaging had changed the world completely with regard to communication habits.

Around this time new SMS-based business models were introduced: Ringtones, horoscopes, news alerts – whatever message fit into 160 characters got published, and was soon sold as a subscription. Premium SMS were the frontrunner and the successful start to selling digital content, beginning the disruption to traditional ways of monetizing and publishing content.

Quickly, marketing was also disrupted with mobile marketing in the early 2000’s via interactive SMS campaigns, replacing paper coupons with mobile coupons, delivering discount codes through Nokia Picture Messages or EMS Enhanced Messaging Service. Loyalty campaigns and clubs were built on SMS beginning around 2002/2003. With the advent of text messaging, very targeted campaigns were suddenly possible.

Getting better with age

The business models and usage of SMS have matured significantly since their debut. Premium SMS nearly disappeared, and WAP push messages were replaced by delivering content through apps.

Today, SMS is no longer used as a disrupting single channel marketing tool, but rather is an important part of orchestrated omnichannel campaign management in a world where contextual marketing and using the customer channel of choice is more important than ever before.

Mobile PIN codes and verification requests sent during registration processes or to finalize a financial transaction offer an extra layer of security for consumers and organizations.

As a matter of fact, SMS used in such scenarios play an increasingly important role to combat identity fraud and to increase cybersecurity. A recent example is the National Health Service (NHS) in the UK launching a 20 m GBP cybersecurity initiative based on SMS alerts.

The future of SMS and text messaging: Conversion and customer engagement

So why do we think SMS is dead and not relevant anymore?

Text messaging in our daily communication with friends and family is being replaced more and more by chat applications, falsely leading to the assumption that SMS is dead. We recognize SMS more as part of communication with a brand, bank, or any other business.

We are so familiar with text messages that we take them for granted and don’t recognize the fantastic bottom-line value SMS have today. If that trend continues, SMS could suffer the same fate as other matured and well-established products used in our day-to-day life.

The reality is that SMS is fast and efficient. SMS do not require any specific app or data coverage to send and receive, and last but not least, text messaging remains the smallest common denominator for the delivery of messages at anytime, anywhere globally.

Make no mistake: The future of SMS and text messaging is alive and kicking, with industry consulting firms forecasting growth over the coming years.

Happy birthday SMS! Here’s to the next 25 years!

The future of customer engagement is mobile. Learn more about how to boost retail commerce via mobile here.

This article originally appeared on Future of Customer Engagement and Commerce.


Felix Heckmann

About Felix Heckmann

Felix Heckmann, Director Solution Management, SAP Digital Interconnect, brings with him over 15 years of experience in building and selling mobile engagement solutions. In his current role, Felix focuses on leveraging SAP Digital Interconnect messaging solutions across the SAP Portfolio. Previously, Felix held Sales leadership positions with SAP. Prior to joining SAP, Felix co-founded a company focusing on Mobile Interaction and Mobile Payment Solutions for the Entertainment & Hospitality Industry.