In 1995, the average SMS user sent 0.4 texts per month. Twenty-five years later, it’s a feature of everyday communication that’s as familiar as making a slice of toast. More recently of course, OTT messaging apps like WhatsApp and Viber have surged forward in the P2P space, yet in enterprise communications application to person (A2P) SMS has endured and continues to grow.
Sinch’s own research, with analyst firm Ovum, forecasts 1.28tn A2P messages will be sent by the end of 2019 up from 1.16tn in 2016. The survey indicated that enterprises are increasingly looking to the future, and how A2P messaging can support their growing messaging needs, in particular consumer engagement, loyalty and customer service.
To achieve that, they are keen to embrace new richer messaging formats like RCS. 36% of respondents in the survey said for example that RCS messaging was on their radar as part of a more complex and evolving messaging mix.
It follows that A2P message delivery continues to be a big part of the communications picture. So what are the key drivers?
1. Smartphones have changed consumer behavior
Pew Research estimates that more than 5 billion people around the world have a mobile device (approximately two thirds of us), over half of these are a smartphone. While it’s true that people in advanced economies are more likely to have smartphones, and are more likely to use the internet and social media than people in emerging economies, penetration of mobile devices breaks down as 76% in advanced economies vs 45% in emerging.
Of course, the rise and rise of smartphones has resulted in a step change in how people communicate. In short, we are more habituated to communicating via voice and text message than ever before, often spontaneously, in the moment. One consequence of this is a change in consumer expectation around how we communicate with enterprises. We want accurate and timely notifications when a parcel is going to be delivered, or on how much we have left in the bank. And increasingly consumers want that conversation to be two-way.
At its simplest form this means the ability to reply to an SMS, for example to reschedule an appointment or to have an SMS-based conversation with a contact-center agent, and more recently, with RCS messaging, communication has become a lot richer. Where once there were lines of text, now messages can be branded, include images, maps and linked buttons that extend and enrich the consumer experience of any given enterprise.
2. The increased use of A2P messaging in customer facing industries
A2P SMS is a quick and reliable way to reach consumers at every stage of their interaction with a company, making it ideal for any customer facing industry.
One major benefit is that customer service functions can now be operated out of hours and on demand. A consumer study by West UC, found that 70% of respondents want more convenient customer service options to support 24/7 lifestyles, whilst 74% agree that it’s frustrating when customer service is only available during working hours.
In areas like banking and financial services, which are increasingly facing disruption and churn from startups, customer service is the key battleground for winning and retaining consumers - not meeting high customer service levels has dire consequences. Accenture estimates the cost of customers switching due to poor customer service is $1.6 trillion. The Digital Disconnect In Customer Engagement report goes further. It found that 52% of customers have switched providers due to poor customer service, with banks, retailers, and cable and satellite television providers being the worst offenders.
A2P SMS makes this possible so that things like notification, verification and one-time passwords (two-factor authentication) are routinely delivered via an encrypted SMS message - anytime, anywhere.
3. SMS is ubiquitous and trusted
Perhaps the greatest strength of A2P SMS is that it’s ubiquitous, it works on every handset, smart and dumb as a native function. SMS also works without the need for an internet (4G) connection.
Going back to the Pew Research mentioned above, if half of the 5 billion global mobile users connect via a smartphone, what about the other half? SMS is guaranteed to be delivered to any handset on any network and for enterprises represents the largest possible customer segment.
A2P SMS is also well established, and the most trusted channel by consumers when communicating with enterprises. In fact, according to research from mobile trade body, MEF, SMS is the most trusted of all enterprise communication channels - almost double the trust levels seen with email or OTT apps.
Looking ahead, richer forms of messaging, like RCS, will increase the consumer engagement potential for enterprises, but delivery via A2P will remain the preferred method for reaching the largest possible audience. Why? because consumers and businesses want it, and it’s the most trusted form of enterprise communication.