Promotional vs. transactional SMS – What is the difference?

Here is a brief overview of these two types of SMS:

Now, let’s explore each type in more detail.

Promotional SMS refers to using SMS for marketing purposes, such as advertising products or services, announcing sales, sending special offers, or promoting events. You can easily recognize these messages by their clear call to action, like “Use code” or “Buy now.” 

Although SMS is limited to 160 characters of text, SMS marketing campaigns are quite popular among businesses. In fact, we’ve seen a 63% increase in promotional SMS traffic when comparing 2023 to 2022. Consistently high open and response rates are among the main benefits of SMS marketing, which makes it a very cost-efficient channel for promoting products and services. 

These are some of the most common ways businesses use promotional SMS:

These are just a few examples of using SMS to send marketing messages. You can always adapt your tactics to your audience and business needs for the best results.

Here is a step-by-step guide on how to start sending promotional SMS messages:

Start by finding a reputable promotional SMS service provider. Look for scalability, high delivery rates, and compliance with regulations. Consider providers that offer APIs for seamless integration with your existing systems.

In many countries, sending promotional SMS to customers requires explicit consent (opt-in). These messages are often strictly regulated under SMS laws, such as the Telephone Consumer Protection Act (TCPA) in the US or GDPR in the EU. These laws dictate how promotional SMS messages should look and when they can be sent. They also regulate how businesses collect, store, and use customer phone numbers, ensuring privacy and consent are respected.

Before sending promotional texts, you must understand and comply with the SMS laws in your market. We always recommend consulting with your provider to get expert guidance. 

You need to ensure each recipient consents to receive promotional SMS from you. You can achieve this through opt-in forms, checkboxes during sign-ups, or clear disclosure of SMS marketing messages during transactions. You should also maintain a record of consent to comply with legal requirements.

Divide your audience into relevant segments based on demographics, behavior, or preferences. Segmentation allows you to tailor messages for better engagement. For example, segment by location, interests, or purchase history.

Keep your promotional SMS concise and impactful. Aim for clarity and urgency. 

Include a clear call-to-action (CTA): What do you want recipients to do? Visit a website, redeem an offer, or participate in a sale?

Personalize the SMS by using the recipient’s name or other relevant details. Dynamic fields allow you to insert custom information into each message.

A/B test different aspects of your SMS campaigns: content, timing, and CTAs. Monitor delivery, open, and conversion rates, then adjust your strategy accordingly.

Transactional SMS refers to automated text messages that don’t have a promotional or commercial intent. Instead, they are used to send important information to customers, such as account changes, upcoming appointments, shipping updates, etc.

People tend to trust SMS more than emails or other communication channels. This makes it a great way to reach your customers on time with the critical information they need to know.

Here are some of the most common use cases for transactional SMS:

Real examples of delivery updates sent from MrSpeedy, one of our customers:

Note: Although some might categorize SMS 2FA as transactional, we consider it a slightly different use case that’s not just informational, as it involves a time-critical security aspect (e.g., accessing user accounts). 

Here is a step-by-step guide on how to start sending transactional SMS messages:

Find a reputable SMS service provider that specializes in transactional SMS messaging. Look for features like high delivery rates, scalability, and robust APIs.

While regulations on transactional SMS aren’t as strict as those on promotional messages, users must still be informed that they will be notified via SMS. 

For example, you can include a clause explaining transactional communication during sign-up or account creation.

Segment users based on their interactions with your business. For example, separate order-related messages from account-related ones.

Transactional SMS should be straightforward and informative. It should include relevant details (e.g., order number, appointment time) and a clear purpose.

Set up triggers for transactional SMS in your messaging platform. For example:

Ensure that the SMS flow works seamlessly. Test different scenarios (e.g., order confirmation, appointment rescheduling) to verify accuracy.

High delivery rates are crucial for transactional messages, so keep an eye on them, and optimize your flows and messages accordingly.

To get the best results from your SMS programs, we recommend finding a proven SMS provider to help you meet compliance requirements and equip you with the right solutions. 

Please note: this content is provided for information purposes only and should not be relied on as legal or compliance advice.

This blog was last updated in June 2024. Updates include a summary of the differences between promotional and transactional SMS, and general guidelines on how to start sending each message type.