What is Two-Way SMS, and How Does Two-Way Text Messaging Work for Businesses in 2024?

In the ever-evolving digital landscape, businesses continuously seek effective communication tools to engage with customers. Enter two-way SMS (Short Message Service), a powerful channel that enables real-time, interactive conversations between businesses and their customers. In this blog, we will explore two-way SMS and how it works, highlighting its significance for businesses in 2024.

Two-way SMS empowers businesses to engage in bidirectional communication, providing prompt responses, personalized support, and improved customer satisfaction. Businesses can facilitate seamless customer conversations by leveraging dedicated phone numbers or shortcodes, integrating SMS APIs, and configuring routing and templates.

Read along to delve into the capabilities and advantages of 2-way SMS, uncovering its potential use cases and best practices. Discover how businesses can harness the power of two-way text messaging to revolutionize their communication strategies, foster engagement, and forge stronger connections with customers in 2024.

What is Two-Way SMS?

Businesses can utilize the two-way messaging service to send and receive SMS messages, allowing clients to easily respond. This service utilizes APIs from messaging platforms, enabling effective communication with a large client base.

Two-way SMS expands the potential of text messaging by providing a platform for direct contact with clients. It allows companies to send SMS messages and receive replies on the same number, at a reasonable cost.

Two-way SMS texting provides a comprehensive solution that incorporates both incoming and outbound messages. It addresses scalability concerns for organizations communicating with clients, allowing simultaneous messaging to a large number of recipients and prompt responses.

Two-way SMS messaging offers specialized tools and methods to facilitate interactive conversations. Users can actively participate in discussions using keywords, offer codes, answer choices, and natural language chats. It provides seamless text-based communication similar to chat windows or instant messaging programs. The advantage lies in using SMS, a widely familiar and commonly used mobile communication medium.

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Why Do People Prefer SMS over Other Channels for Business Related Communication?

According to a study by VoiceSage, 90% of SMS messages are opened within 90 seconds of being sent, compared to just 20% of email messages.

Since SMS can be received on any mobile phone, regardless of its model or operating system, it has a wide audience. It enables companies to reach out to a wide audience, including clients who might not have internet access or who would rather not use email or social media. Due to strong open rates and the fact that most people always have access to their mobile devices, it is more probable that they will immediately notice and open an SMS message.

SMS texts convey a sense of urgency and are promptly sent. This promptness makes it an efficient channel for communicating critical information or time-sensitive information since it motivates receivers to read and reply to messages quickly. People are accustomed to texting and find it simple to communicate through brief, succinct texts. SMS message composition and response time are very quick and easy. To receive communications from companies through SMS, users often need to opt in or provide their approval. Customers who get SMS messages are therefore more likely to interact with the material since they have previously shown interest in the business or its products.

Businesses and customers may communicate directly and personally with SMS messaging. The messages are delivered straight to the receivers' mobile devices, resulting in a more personalized and intimate one-on-one contact experience. Compared to other media, SMS frequently generates better engagement and response rates due to its high open rates and direct nature. A call to action contained in an SMS message is more likely to elicit a response or action from the recipient.

One-Way Vs. Two-Way SMS: Top differences

There are two main types of SMS used by businesses and organizations: one-way SMS and two-way SMS.

One-way SMS is a form of bulk or mass text messaging service sent to large groups or contact lists. It is primarily used for sending promotional, informational, or transactional messages, and recipients cannot respond directly to the message. This type of SMS is ideal for sending out announcements, updates, or alerts to a large audience.

Two-way SMS allows for a more conversational commerce and interactive form of communication. With two-way SMS, recipients can respond to the message, enabling businesses and organizations to engage with their customers or clients in a more personalized manner. This type of SMS is ideal for customer support, appointment scheduling, and gathering feedback.

Let's check out the top differences between one-way and two-way SMS.

1. Purpose

• One-way SMS: Sending announcements, updates, alerts, and promotional messages
• Two-way SMS: Engaging with customers on a personal level, providing support, and gathering feedback

2. Phone Number Types

• One-way SMS: Short-codes
• Two-way SMS: Local 10-digit (10DLC) and toll-free numbers

3. Applications

• One-way SMS: ‍Promotional, informational, and transactional messaging
• Two-way SMS: Conversational SMS experiences, appointments and scheduling, reminders and confirmations, billing and payments, surveys and polls, feedback and reviews

4. Pros

• One-way SMS: ‍Easy to send bulk SMS, prevents flooding with responses, suitable for various campaigns, saves time
• Two-way SMS: Meets customer preferences, improves customer experiences, gathers real-time feedback, versatile use cases

5. Cons

• One-way SMS: ‍Limited personalization and not conversational in nature
• Two-way SMS: Higher cost, needs sophisticated AI technology

Why Do Customers Prefer Two-Way Texting Over One-Way SMS Messaging?

Two-way texting enables direct interaction between customers and businesses, making communication dynamic and interesting. It allows for questions, comments, and back-and-forth conversations, promoting engagement and improving customer satisfaction. Personalized responses and tailored information can be provided to customers based on their specific queries or needs, using keywords, offer codes, and response options to offer value and understanding.

Two-way texting facilitates swift resolution of difficulties or concerns, allowing customers to seek help, make support requests, or report problems, and receive timely responses from companies. This efficient problem-solving enhances client satisfaction and builds trust. The convenience and familiarity of text-based communication make it a preferred choice for customers, as it eliminates the need for voice calls or in-person interactions, allowing for concise and clear communication. The non-intrusive nature of texting enables customers to respond at their convenience.

Two-way texting accommodates a range of interactions, from simple inquiries to more involved conversations, supporting natural language dialogues and providing relevant answers. It is adaptable for various customer engagements. Customers appreciate the privacy and control offered by two-way SMS, allowing for private conversations without interruptions or eavesdropping. By managing their responses, customers can efficiently handle their time and responsibilities.

How Does Two-Way Text Messaging Work for Businesses in 2024?

In 2024, two-way text messaging continues to be a valuable communication tool for businesses. Setting up two-way text messaging involves selecting a reliable SMS service provider that offers robust APIs for seamless integration with existing systems. Businesses can acquire dedicated phone numbers or shortcodes through the provider to establish the point of contact for customers. Integration with customer support systems or CRM platforms enables businesses to manage and respond to incoming messages efficiently, ensuring timely and personalized communication with customers. The components of two-way SMS include the messaging platform or API, dedicated phone numbers or shortcodes, message routing configurations, and the ability to automate responses and workflows.

Setting up two-way text messaging for businesses

Setting up two-way SMS for a business involves a few key steps. Here's a step by step guide for businesses on how to set up a two-way SMS solution: 

Step 1: Choosing a Messaging Service Provider

Businesses should carefully consider factors such as reliability, scalability, pricing, integration capabilities, supported channels (SMS, MMS, social media messaging, etc.) and customer support when selecting a messaging service provider for two-way SMS. They should prioritize providers with a strong track record of message deliverability and high uptime

Step 2: Signing Up for an Account

Businesses can create an account with the chosen messaging service provider and provide the necessary information and complete any registration or verification processes required.

Step 3: Obtaining a Dedicated Phone Number or Shortcode

Typically, businesses need a dedicated phone number or shortcode that is compatible with the channels they intend to use to receive inbound messages. The messaging service provider can assist in obtaining a number or shortcode for your business.

Step 4: Integrating the API

Most messaging service providers offer APIs (Application Programming Interfaces) that allow businesses to integrate their systems with the messaging platform. The business development team or IT department can implement the API.

Step 5: Setting Up Message Routing

The message routing settings need to be configured within the messaging service provider's platform. Companies can determine how inbound messages should be handled and where they should be routed for processing. This may involve setting up keywords, rules, or message filters to direct incoming messages to the appropriate departments or personnel within the organization.

Step 6: Creating Design Message Templates

Businesses need to create clear and concise message templates for different scenarios or use cases, while taking into account any character limitations imposed by the messaging channels they are using. These templates will serve as the basis for the automated responses or initial messages.

Step 7: Testing and Iterating

Before launching two-way SMS communication to customers, businesses need to conduct thorough testing to ensure that messages are being sent, received, and processed correctly. They can test both inbound and outbound message flows, and verify that the routing and integration with their systems are working as intended.

Step 8: Implementing Opt-In and Privacy

To comply with regulations and respect privacy, businesses should implement opt-in mechanisms for customers to receive two-way SMS messages and clearly communicate the purpose and frequency of messages, and provide easy opt-out options, apart from following data protection and privacy norms.

Step 9: Automating Responses and Workflows

Automation tools and workflows should be implemented to handle common or repetitive interactions. Businesses can also utilize AI chatbots or automated text responses to provide instant replies to frequently asked questions or standard inquiries. This helps reduce the burden on the team and ensures prompt responses even outside of regular business hours.

Step 10: Launching 2 Way SMS and Monitoring performance

Once the two-way SMS setup is complete and tested, businesses can launch communication campaigns or begin engaging with customers for customer support through two-way messaging. They can monitor the performance of the messages, response rates, and customer feedback using SMS analytics.

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Components of Two-Way SMS

Two-way SMS offers a range of options to meet diverse company demands. Short codes, which are often used yet occur in several forms, are more remembered than phone digits. Long Numbers, on the other hand, resemble conventional phone numbers and are useful for reaching a worldwide audience. The most important factor is that working with an experienced SMS Gateway provider for your Two-Way SMS setup removes the need to understand the nuances of SMS messaging particular to a certain region.

Messaging Platform or SMS Gateway

A messaging platform, such as an SMS gateway, is required to manage the sending and receiving of text messages. This platform should be capable of handling the volume of messages a business expects to send and receive and should offer features such as message templates, scheduling, and analytics to optimize the messaging process.

SMS Short Codes

SMS Short Codes are frequently used for various activities, including voting in television contests, showing interest in special deals, and interacting with customers via filing trouble complaints. Short Codes have the benefit of being easier to remember than complete phone numbers because they are often four or five digits long. Most individuals don't need to write things down because they are usually easy to recall.

There are two different categories of shortcodes. 

Dedicated short code: A dedicated short code is the first choice; it's a private SMS channel that is only given to your business. No other business may use that particular number, and all communications received to it are sent to your organization. In some circumstances, it's even possible to modify the number to produce a Vanity Short Code that is easier for your clients to remember. The supplier will provide your business a random five-digit number if a vanity code is not wanted.

Shared Short Code: The Shared Short Code, on the other hand, caters to a somewhat different business context. Similar to a dedicated code (which uses keywords to identify certain transactions), a shared short code allows communications addressed to your business to stay confidential. However, few businesses could use the exact five-digit number. Since the supplier may divide the costs among several consumers, there is the possibility of cost reductions, which is one benefit of a shared short code.

SMS Long Numbers

Short codes have certain limits, however, SMS Long Numbers provide a workaround. Long numbers work like conventional phone numbers and may be used by users anywhere in the globe, in contrast to shortcodes, which are often restricted to a particular nation. The possibility of incurring significant fees for international inbound and outbound contacts with clients who might not deliver enough value is eliminated by the usage of lengthy numbers.

Long numbers function similarly to short codes, allowing users to text the number and get a response. Long numbers, however, have the extra advantage of enabling users to send and receive messages from anywhere in the globe. Customers from abroad who use lengthy numbers are aware of the charges involved since they must also add the proper international dialling code.

This enables advertisers to feel close to their target audience and have a localized presence. Having local numbers available may greatly increase response rates and conversions, improving overall business success.

Keywords for SMS

The infrastructure makes sure that incoming text messages are sorted and sent to the appropriate business using SMS keywords when numerous marketers use the same Short Code for SMS messaging.

When you get outbound marketing messages from a business you have opted into, SMS keywords are the instructions sent. A retail store may use a common short code to give you a "10% discount voucher" and urge you to respond with "DISCOUNT," while an ice-cream seller would use the same code and instruct you to respond with "SOFTIETREAT." The message provider routes the inbound text in accordance with these keywords, which identify the target firm.

Automated Actions

Automated responses to text messages are triggered after a consumer replies. Even with a high rate of exchanges, these acts make two-way SMS into a conversational experience. In order to advance the conversation, keywords are used to start predetermined sequences of automated operations. This eliminates the need for human engagement, such as from a customer service agent.

Automated processes integrate particular input data with previously established rules that specify how they should be handled. Consider welcoming new customers differently from current ones if they react with "WELCOME20," showing their interest in a voucher. Additionally, you might wish to compare several offers to see which performs better, for example, comparing "10%OFF" to "B2G1." Such information gleaned from automated activities aids in campaign planning, and understanding of consumer preferences.

APIs

Application Programming Interfaces (APIs) are a crucial component in the two-way SMS process. APIs allow businesses to integrate the messaging platform with their existing systems, such as CRM software or marketing automation tools. This integration enables seamless communication and data exchange between various systems, ensuring a smooth and efficient messaging experience.

Double Opt-In and Opt-In

It is essential to have protections in place because of the expenses entailed for both organizations and customers. Opt-in is a technique for ensuring that clients voluntarily agree to receive outbound SMS communications. Nowadays, trustworthy SMS message companies use opt-in procedures to confirm that clients actually wish to receive communications. Double opt-in, where users must provide a certain text response before being included to a database, is legally required in several nations. In the event that a supplier approaches you and offers non-opted-in lists, you should exercise caution.

Top Use Cases of 2-Way SMS in 2024

Healthcare

In the healthcare sector, text messages are employed to inform, update, and remind patients. These messages may include appointment reminders, prescription refill notifications, immunization schedules, and more. Some healthcare professionals even provide diagnostic test results and medication information upon patient request. Hospitals and clinics often send confirmation requests to minimize missed appointments. Patients can respond to indicate their availability, and alternative appointment times can be offered to those unable to make it. Patients can then reply to the message and request a new appointment time.

Retail

In the retail sector, businesses now use text messaging to send electronic sales receipts instead of paper receipts. This enables customers to easily organize their receipts and allows companies to personalize subsequent SMS messages based on previous purchases. Retailers can gather feedback from customers and send updates about loyalty programs and sales promotions. They can also create exclusive short or long codes, advertise their phone numbers, and encourage customers to opt in with their mobile numbers for discounts and updates. Additionally, they can efficiently conduct customer surveys using two-way SMS services.

Finance and Banking

In financial transactions and activities, individuals often require a one-time pin or authentication code for security purposes. Financial institutions employ SMS to deliver services, enhance customer engagement, and ensure secure transactions. Some banks allow customers to request and receive information about balances, transactions, and account activity via SMS.

Media and Entertainment

In the media and entertainment industry, which encompasses radio, television, art, video games, and more, two-way SMS is utilized in diverse ways.

During television viewing, audiences can actively participate by sending SMS votes to choose winners of reality competitions or express their opinions on breaking news. These SMS messages are then read aloud or displayed on television.

TV networks and stations leverage text messages to gather fan input and conduct pilot testing for new programming. News programs may offer SMS notifications to viewers about breaking news or weather alerts in exchange for localized information.

Media companies are permitted to send one-time SMS advertisements if they have the necessary legal authorization. They also use SMS to provide promotional offers, notify customers about upcoming performances or events, and confirm ticket orders.

Various Industries Like Services Sectors

Two-way SMS is finding applications in various sectors. Salons, gyms, and restaurants use it for appointment confirmations and reminders. Travel and tourism businesses, accommodations, and airlines utilize two-way SMS services to communicate with clients. As the benefits of two-way SMS become more apparent, creative uses for this powerful tool will continue to emerge.

Real-Life Examples of Businesses Using Two-Way SMS for Customer Engagement

Domino's Pizza

Domino's Pizza utilizes two-way SMS via messenger to enable customers to place their orders via text messages. Customers can simply text their order and address, and Domino's processes the request, confirms the order, and provides real-time updates on the delivery status through text messages. 

Airbnb

Airbnb uses two-way SMS for customer support and communication. Guests and hosts can exchange messages through the Airbnb platform using two-way SMS, allowing for seamless communication regarding bookings, check-ins, and other inquiries, using masked phone numbers, ensuring the privacy of both parties.

Pizza Hut

Pizza Hut uses two-way SMS to send out appointment reminders and confirmations for online orders. Customers can also use SMS to check the status of their order, make changes to their order, or cancel their order. Pizza Hut had also launched Text Messaging Loyalty Program in 2014, through which customers can text the word “PIZZA” to the SMS short code 69488 to get exciting offers.

Delta Air Lines

Delta Air Lines utilizes two-way SMS to provide flight updates and notifications. Passengers receive text messages regarding flight status, gate changes, and baggage information. They can also respond to these messages to make changes to their reservations or seek assistance. Delta Air Lines tested a new messaging feature in 2019 that allowed travelers to send the airline a message from an Apple device if they have a question or issue.

Sephora

Sephora, a popular cosmetics retailer uses 2 way SMS in which customers can opt in to receive text messages from Sephora by texting "JOIN" to 500500. Once they have opted in, Sephora will send them text messages with special offers, product recommendations, and other updates. It uses shortcodes and keywords to facilitate 2 way messaging.

Benefits of Using 2-Way Texting in Businesses

A widely used technology with a lengthy history is SMS. As a result, it exposes you to a broad audience, which may include those who have never seen you online. It is excellent for your retention and acquisition objectives. 

Another benefit of using SMS as a channel is that thousands of people will typically answer your text as soon as they feel their phone buzz, so whether you're sending out offers or asking for feedback, you'll frequently get the majority of data in just a few minutes.

Instant delivery

Text messages often arrive within a few seconds, allowing your company to send time-sensitive communications immediately. SMS's open and response rates are far greater than emails'. Your clients can decide more quickly if you communicate more quickly and directly.

Versatility Across Demographics

Text messaging has a broad demographic appeal. It is not limited to a specific age group or demographic, making it an effective means of communication for businesses targeting a wide range of customers. This versatility is particularly beneficial when engaging with a diverse customer base.

Automation

By setting up automatic, dynamic answers based on specified phrases that indicate your clients' preferences, the 2-Way SMS service may save time and resources.

Cost-effective, High Conversion

SMS texts have reasonable conversion rates since they are concise, understandable, and don't contain many links or graphics. In comparison to other forms of marketing, SMS campaigns often cost less to set up and maintain.

Easy-to-Use APIs

Good two-way SMS providers have easy-to-use APIs that allow organizations to send, receive, and monitor messages. They may also be quickly integrated with any tools or programs from a third party.

Limitations or Disadvantages of Two-Way SMS

Character Limit

SMS messages are frequently restricted to a particular number of characters, typically 160 per message. This may limit the amount of information that can be said in a text, making it difficult to send lengthy or elaborate messages.

Misinterpretation Risk

Text-based communication lacks nonverbal indicators like voice inflection and facial emotions, which can cause messages to be misunderstood. This could lead to misconceptions or poor communication between companies and clients.

Opt-In Requirements

Due to stringent laws governing SMS communication, several nations demand that companies gain consumers' express approval before sending out promotional texts. The scope and audience of two-way SMS marketing may be constrained by this opt-in procedure.

Limited Formatting Options

Text that is bolded or italicized, photos, or hyperlinks are frequently not available in SMS messages. This may limit SMS messaging's aesthetic attractiveness and branding options.

Lack of Multimedia Support

SMS is primarily a text-based communication channel, lacking support for multimedia content such as images, videos, or interactive media. If businesses need to share visual or interactive information with customers, they may need to rely on alternative channels or direct users to other platforms for a richer experience.

Chances of Delayed Responses

While SMS messages are generally delivered quickly, response times may vary depending on the recipient's availability, network connectivity, or personal circumstances. Delays in receiving or responding to messages can hinder the real-time nature of two-way SMS and impact the overall user experience.

Conclusion

In conclusion, as you've explored the concept of two-way SMS and how it works for businesses in 2024, you've gained valuable insights into its advantages, diverse use cases ranging from customer support and engagement to marketing campaigns and appointment reminders., and real-life examples of successful implementations. Two-way SMS has emerged as a preferred communication channel for businesses due to its interactive nature, high engagement rates, and convenience for customers.

However, it's important to be aware of the limitations and challenges, such as cost considerations, message delivery limitations, and compliance requirements, in order to mitigate them effectively.

How can App0’s AI-powered customer engagement platform enable two-way text messaging and help businesses go beyond transactional messaging?

App0's AI-powered customer engagement platform can effectively address the challenges and limitations of two-way SMS for businesses. By leveraging App0's platform, you can overcome the cost of setup, integrations, opt-in and TCPA compliance, message delivery limitations, and difficulties in sending or receiving multimedia content.

App0 is at the forefront of the conversational AI revolution for customer service, dedicated to revolutionizing workflow automation through messaging. It enables you to go beyond transactional messaging and create meaningful customer experiences through conversational interfaces and user-friendly design.

With App0, you can seamlessly connect with your customers across multiple channels, centrally manage user preferences, and leverage AI to turn notifications into action-based conversations. This means you can reach your users at the right time and on their preferred channels, improving customer satisfaction and driving desired outcomes. App0's AI capabilities, such as sentiment analysis, enable you to make data-driven business decisions and further enhance the customer experience.

Imagine the convenience of confirming payments over SMS with a simple "Y" response from your customer.

Request Demo now to unlock the full potential of two-way text messaging and take your customer engagement to new heights.

Two-Way Text Messaging: FAQs