Transactional SMS: Best practices for customer satisfaction

When was the last time you checked your phone? If you’re like most people, one-third of your waking hours involve a smartphone. It’s people’s go-to for almost everything, like news, updates, shopping, banking, and how we interact with businesses. And when texts have a 98% open rate, SMS is a great way for businesses to reach their subscribers with automated updates and news.

This is where transactional SMS comes into the picture. It’s about sending essential, time-sensitive information directly to your customers’ phones.

Transactional SMS taps into that near-constant connection we have with our phones, and text messaging’s incredibly high open rate. In this article, we’ll cover what these kinds of texts are, detail how to send them, and share some examples to inspire your transactional SMS messages.

Transactional SMS is a direct way for businesses to communicate specific, important information to customers through text messages. It’s the kind of message customers get after completing an action or when an update is necessary. Businesses can set up triggers – in their CRM or other software – for SMS automation based on a customer’s actions.

Unlike promotional SMS, which focuses on marketing and sales, transactional SMS enables timely and critical updates and action. Here are some examples:

• A brand can send an SMS with a one-time password (OTP) to authenticate a user’s identity as they’re logging into their account.
• A bank can send an SMS when there’s an action required for a customer’s credit card. This keeps the customer informed but also alerts them to any unauthorized use.
• An online store can automate texts to subscribers to let them know when their orders have shipped with a tracking number and expected delivery date.
• An airline can send an SMS with updates about changes in a flight’s schedule or gate number.
• A doctor’s office can send a reminder about an upcoming appointment, with the option to confirm or reschedule.

Used this way, transactional SMS helps businesses take care of their customers by providing important information in a timely manner. As a result, customers are happy because they gain instant access to details about their transactions or orders. It’s a win-win!

Transactional vs. promotional SMS

Let’s say that someone made a purchase, booked a flight, or scheduled an appointment. They might get a transactional SMS message as a follow-up that provides additional details, like an order status, or to secure their login with SMS verification.

Promotional SMS messages, on the other hand, are for advertisements. They announce sales or promote a brand. Companies might send these messages to subscribers to share details about a weekend sale or a new product launch.

The goal? To grab attention and, hopefully, persuade someone to buy or engage. These are carefully planned and sent on a schedule based on the company’s SMS marketing strategy.

On the other hand, people get transactional messages as needed – specific to their actions. They’re inherently more personal, since they’re specific to the individual and their relationship or interaction with the business.

Transactional SMS communicates necessary information quickly and directly to customers. Customers stay well-informed and engaged with timely updates. Here’s why this kind of messaging is so beneficial:

• It’s instant. A study called “Time to Win” highlighted that two-thirds of customers consider speed to be as important as price. Transactional SMS hits the mark by delivering messages in real time. Your customers stay informed the moment something important happens (like a payment or delivery update).
• It’s reliable. SMS relies on mobile networks rather than wifi or mobile data to be delivered, so your audience doesn’t have to deal with with uncertainties with internet connectivity or poor network coverage to get their important messages.
• It’s convenient. The information your customers need lands right in their pockets. There’s no need for them to log in somewhere or check emails – it’s all there in a simple text.
• It helps improve the customer experience. Customers appreciate being kept in the loop – even if it’s not all positive – like a shipping delay. You’ll reduce frustration from people calling to ask about unrecognized transactions or their order status. With transactional SMS, they already have the information they need.
• It helps build trust. According to an OptimoRoute study, almost 60% of respondents said that real-time order tracking makes them more loyal to brands. Loyal customers spend more, become advocates for your brand, and boost your retention rates.
• It can be automated. Transactional SMS messages save businesses a lot of time by automating essential notifications like order confirmations and delivery notifications. This ensures these messages are sent promptly without manual intervention.

So how do you actually send transactional texts and what triggers the messages? Here are five steps to help you get started:

1. Integrate your SMS service provider’s API into your business’s systems

An API, or Application Programming Interface, is like a bridge between your business’s system and your SMS service provider. It allows these two different systems to talk to each other.

SMS API providers that support multiple programming languages such as Java, PHP, Node, .NET Core, or Python make integration easier for your developers.

Sinch’s API goes a step further by lending a hand during the setup, too. All you need to do is:

1. Sign up for a free account on the Sinch Customer Dashboard.
2. Get a free virtual phone number for testing.
3. Create your credentials.
4. Select a language and follow the instructions to set up a simple application.

You can start sending large volumes of SMS messages automatically once you integrate the API. Think of it as setting up a super-smart, automated system that keeps your customers in the loop with zero hassle.

2. Run an opt-in campaign

An SMS opt-in campaign is how you get your customers’ permission to send them text messages.

Though specific opt-in practices for promotional and transactional messages are different, we recommend getting explicit opt-in for all your messages.

Why? Because this respects your customers’ privacy and adheres to sms compliance. Plus, it prevents you from sending customers messages they don’t want.

Here are a few places that might be good for a customer to choose to receive transactional SMS:

1. Your website. Add a pop-up or banner asking if customers want to receive SMS updates.
2. At checkout. Give people the option to receive SMS updates about their order as they’re making a purchase.
3. With their email receipt. Allow email subscribers to opt in for text message updates.
4. In-store signage. Put up signs or posters in your physical location asking customers to opt-in for SMS updates.

No matter which method you choose, make it easy for customers to opt in and know exactly what type of messages they’ll receive from you.

3. Develop message templates

No one has time to write a unique message every time they write an SMS. That’s why adding a layer of automation with SMS message templates is your new best friend.

Create and save templates for common messages, like order confirmations, transactional updates, or appointment confirmations and reminders. This way, you’re always ready to send a message without the hassle.

Just customize the specifics for each situation, and you’re good to go. Template variables like customer name, order number, or appointment time make it easy to personalize each message without typing out every detail.

Plus, with templates, messages are always on-brand and have a consistent tone of voice. Say, “goodbye!” to last-minute typos and mistakes!

4. Start with one campaign

Test messaging for a specific scenario – maybe shipping updates – and see how it goes.

Start with one campaign based on a specific customer interaction to fine tune your approach and understand your audience’s response in a controlled setting. Then, gather valuable insights and make necessary adjustments before expanding to broader campaigns.

Monitor how your customers engage. Are they acting on them? If your opt-out rate is high, it’s a sign to tweak your language.

Remember: the goal is to provide value, not overwhelm your customers.

Pick one process that’ll benefit the most from instant updates. See firsthand how transactional SMS can enhance your customer experience and gradually expand to other areas as you gain confidence and insights.

5. Adjust your messaging and add more transactional texts

Those insights you just got from your initial campaign? Use them to improve and expand your messaging. Add more transactional texts for other use cases based on customer responses.

You’re looking for things like:

• Are customers curious about their order status, or do they need help with the product after purchase?
• Do you have a high call volume for appointment scheduling?
• Do subscribers ask for reminders about upcoming events or deadlines?

Use transactional texts to fill these gaps and streamline customer interactions.

Do you include irrelevant information? Is your language too formal or informal?

Answers to these questions affect customer engagement or can even push subscribers to opt-out. To make transactional SMS work, follow these best practices:

• Personalize your message. Use template variables to tailor each SMS to the individual. For example, “Hi [Name], your order [Order Number] is on its way!”
• Keep it short. The length of a standard text message is 160 characters. Only include “must-know” information.
• Use a clear CTA. Be straightforward with what you want the customer to do next. A clear call-to-action like “Click here to track your order” helps.
• Include opt-out text. Respect your customers’ preferences by including an opt-out option. A simple “Reply STOP to unsubscribe” works well.
• Send SMS messages promptly. Send messages within minutes after a trigger event. Timely updates maintain trust and efficiency.
• Use automation. Make sure your transactional SMS are sent automatically based on specific events or times that your audience prefers (like delivery notifications, or fraud alerts).

There’s nothing better than seeing how this SMS strategy works by taking inspiration from real-life examples of transactional SMS. In this section, we’ll cover different ways that transactional SMS improves customer experience, complete with case studies and templates.

Bookings and appointments

Transactional SMS is a convenient way to confirm and remind customers about upcoming appointments.

For healthcare professionals, speed is of utmost importance. Every second they spend on administrative tasks like managing appointments and paperwork is a second taken away from patient care.

French healthcare company, Doctolib aimed to digitize these processes and make connections between medical professionals and patients smoother.

During the pandemic, their needs skyrocketed to 40 million messages! They realized the potential impact of their platform and the need for a reliable messaging partner.

Doctolib then turned to Sinch SMS to help them send appointment reminders and two-factor authentication messages to over 25 million customers every month. This approach has significantly reduced no-shows and increased access to healthcare.

And the results? They’re achieving a 97% delivery rate for SMS messages, with 95% having a latency of less than one second.

No-shows are down, and streamlining appointment management has improved security and the patience experience. By adopting transactional SMS, Doctolib has improved efficiency, security, and user-friendliness in healthcare.

Looking for a template to help you send your first transactional booking or appointment confirmation text? Try this one:

Your appointment at [Business Name] has been confirmed, [First Name]! We’ll see you on [Date] at [Time].

Reply STOP to opt out

Account verification

Transactional SMS for account verification ensures that when a customer – or someone claiming to be them – tries to access an account, it’s really them. A unique code sent to the customer’s phone as a second verification of identity. This extra step helps prevent unauthorized access.

Take Triodos Bank as a case study. They’re pioneers in sustainable banking and are committed to using money for positive change.

But with great power comes great responsibility – especially in keeping their 170,000 clients safe. They needed a reliable method to secure their mobile app and online portal logins.

Triodos Bank rolled SMS verification out to clients and sends around 250,000 texts monthly. Each time someone tries to log in, an OTP is sent to their registered number.

It’s a simple yet powerful way to thwart fraudsters. This move secures accounts and gives their customers peace of mind.

And by streamlining the sign-up process with SMS verification, Triodos Bank significantly increased the number of new digital account registrations. Transactional SMS has many benefits – in this case, security plus growth!

Here’s an account verification template to get you started:

[CODE] is your [ServiceName] OTP. Do not share it with anyone.

Reply STOP to unsubscribe

OTP codes for quick sign-ups

Let’s be real. Who wants to create another login and remember yet another password? Combine this with a complicated parking situation in a busy city and, well, you get the picture.

Imagine you’re rushing to park your car downtown. Stress is high, and you need a reliable solution. EasyPark allows you to pay for parking from your phone, without the need for a parking meter.

But here’s the catch: secure access to their app is essential, not just to find and pay for parking, but also to get timely alerts about your parking session’s expiry.

Consider the consequences if an SMS notification fails. Customers may be left with a parking fine because of the missed expiry alert.

That’s a situation EasyPark users need to avoid. Their solution? SMS verification for sign-up and log-in and crucial real-time SMS alerts about parking.

The results? A significant boost in user verifications and SMS delivery efficiency.A 7% increase in conversions shows how convenient OTP codes are for authenticating users and encouraging quick sign-ups.

Here’s a quick template you can work with if you’re getting started with sending OTP codes via SMS:

Hi [FirstName], welcome to [ServiceName]! Your verification code is [Code]. Enter this to complete your sign-up.

Not you? Reply STOP to unsubscribe

Fraud alerts

Nobody likes to be in the dark when it comes to suspicious activity on their accounts.

In 2022, credit card fraud was the most common type of identity theft. This means that there’s a high chance of it happening to you or someone you know.

But with transactional SMS, customers get immediate alerts if there’s any unusual activity on their account.

Nets, a leading payment processor in Europe, understood this need well. Handling millions of card transactions daily, they needed a swift and secure method to verify transactions and prevent fraud. Previously, validating suspicious transactions was a slow, bank-driven process.

Recognizing the need for rapid communication in fraud prevention, Nets implemented a new solution: instant verification through two-way SMS.

The real-time validation of card transactions improved the customer experience in fraud mitigation. The key was delivery speed – in fraud prevention, every second counts.

But the user experience was equally important. Messages about suspicious activity should be intuitive, recognizable, and conversational, so customers can respond quickly.

Through mobile alerts, Nets enabled cardholders to respond immediately, halting potential fraudulent activity in its tracks. The use of two-way SMS not only increased security, but also gave control directly to the customers.

Here’s a transactional fraud alert template to get you started:

[BankName] Fraud Alert: Hi [FirstName], did you use card ending in [XXXX] at [Retailer] on [Date]? Reply YES or NO.

To opt out of alerts, reply STOP

Delivery notifications

We’ve all been there – eagerly waiting for a package, only to receive an email notification it was missed or delayed. It’s frustrating and you think, “If only the company had let me know sooner, I could have made arrangements.”

That’s why delivery updates are important.

By using Sinch’s SMS services, companies like Budbee can provide real-time updates on the status of deliveries directly to their customers’ mobile phones.

Since 2016, Budbee has focused on customer convenience. They understood that buyers want control over their deliveries – choosing the day, time, whether to receive it in person or find it at their doorstep, and even if they’d like a photo confirmation.

Messages include tracking links, personalization options, and more. Delivering this way not only ensures a smooth delivery process, but also builds trust with customers.

And the result?

Budbee’s millions of reviews averaging just below 4.9 out of 5 stars speak volumes.

“I personally have seen many reviews that mention the communication as a big part of it – they really appreciate the notifications,” says Simon Strindberg, Chief Marketing Officer at Budbee

Here are a few transactional delivery notification templates to inspire your own:

Hi [FirstName], your package ([TrackingNumber]) is on its way! Track it here: [URL]. To stop msgs, reply STOP

Or, if you’re looking to be a bit more conversational:

Good news, [FirstName]! Your order ([TrackingNumber]) has been shipped. Check delivery status: [URL]. Opt-out? Reply STOP

And here’s one to alert your subscriber that their order is out for delivery:

[FirstName], your order ([TrackingNumber]) is out for delivery today! See details: [URL]. To unsubscribe, reply STOP

Clearly, there are many different ways you can keep your customers informed with transactional SMS!

Order confirmations

Have you ever ordered something and wondered if it actually went through?

Order confirmations via SMS give your customers peace of mind by providing instant, reliable confirmation that their retail and ecommerce orders were received.

But it’s not just about assurance – it’s also about convenience. Customers can retrieve their order details and track delivery status directly from their phone without having to dig through emails or log into a website.

Consider TaskRabbit, a global network connecting people with local Taskers for household jobs.

They initially used transactional email for communications, including order confirmations. But for more urgent updates, email wasn’t cutting it. They needed something faster, something that grabs attention immediately.

Transactional SMS allows TaskRabbit to send various notifications and alerts directly to customers’ phones.

This includes task requests via SMS, updates on appointment dates and times, schedule changes, reminders, and notifications about in-app conversations. It’s quick, direct, and effective.

And the results speak for themselves. TaskRabbit has millions of users and sent around 36 million chat messages from September 2020 to September 2021. Their 96% open rate shows just how effective SMS can be for getting customers’ attention.

Here’s a quick template to inspire your own order confirmation SMS messages:

Hi [First Name], thanks for your order! Your tracking number is [Tracking Number]. Stay updated at [Link]. To opt out of SMS, reply STOP

Transactional SMS meets customers where they are – on their phones. It doesn’t get more convenient than that.

But its effectiveness also depends on striking the right balance between being informative and intrusive. Choose the right timing, messaging, and frequency to provide a positive customer experience.

And of course, none of that matters if you don’t have a reliable SMS provider. That’s the first step to getting started with transactional SMS. Our guide covers everything you need to know about finding the right SMS provider. Check it out and start getting your customers’ attention with transactional SMS.