Picking an SMS Gateway Provider for Your Business

SMS gateway service is a great fit for small businesses but when choosing the right platform cost is a huge factor. Most business users consider the price per SMS as the primary criteria when evaluating the various competing services. If your business has thousands, if not millions, of promotional messages being sent to your customers each month, a fraction of a cent increase makes a huge difference. What seems like a minimal increase can easily add up add up and become a large monthly marketing expense. While it isn’t unreasonable to evaluate the various services on price, it shouldn’t be the sole factor.

Business professionals use price when considering SMS platforms because as the saying goes, you only get what you pay for. Layman consumers often assume text messages to be a commodity where it doesn’t matter which provider you choose because “they are all the same”. Nothing is farther from the truth.

The Issue of International Routing

The cost of an SMS message varies from country to country and it also depends on the type of network a company uses. In the United States, a leading network provider like AT&T charges its retail subscribers around $0.20 for one text message. In comparison, the cost of sending a text message to the US over a leading provider in India like Airtel costs INR 5, which is roughly $0.075. This cost can further drop when sent over a small-time network provider in smaller countries.

Some SMS service providers route your messages through a network provider to one of the smaller countries. But such providers are not reliable and the destination networks (your target recipient’s network provider) often list these messages as spam. While international routing can save your business tons of money, they destroy your ROI. Your marketing messages won’t get delivered to the right customers at the right time.

Barking Up the Wrong Tree

The issue of international routing impacting your marketing ROI is only the tip of the iceberg when it comes to issues. In most countries, the charges for sending an SMS depend on the type of communication. On a per-SMS basis, the costs are typically lower for consumer-to-consumer messages and transactional messages (account balance alerts, payment notification, etc.) and higher for marketing messages.

The reason being is that the termination cost (the cost that the sending network pays to the recipient network if the messages are routed through more than one network) is more expensive compared to promotional messages. In some cases, your SMS gateway provider may choose to route your promotional message over the transactional pipe thereby reducing your per-SMS cost. This action is illegal and could put your company, along with your service provider, in a tangled legal web if not resolved.

So how do you pick the right service provider? Here are some things you should ask:

Insist on a Direct Route

The first thing to do is insist on a direct route. Direct routes essentially mean that an SMS meant for an AT&T subscriber is sent over an AT&T line while one meant for Verizon is sent over a Verizon pipe. Going this route allows your marketing efforts follows a more streamlined process. Most of the reputed gateway providers have direct routes and while this may be slightly more expensive, it is well worth it from an ROI perspective. The deliverability is extremely high and will help your company’s marketing efforts tremendously. Your company should make this an included point in an SLA or other agreements that are signed between your company and your service provider.

Inquire About Cold SMSes

Legitimate bulk SMS service providers are never too pushy and prospective leads are routinely asked about the geography of the recipients, nature of SMSes being sent and also whether you have an opt-in list or cold list available with you. If your service provider does not question you and your business on these factors, they may be violating the law in one way or the other.

The anti-spam laws in most countries have provisions to either filter out unwilling recipients with a Do-Not-Disturb tag or require businesses to include explicit opt-in permission from recipients. Failure on this part could result in extremely high cost and backlash between both the business and the provider. If your provider does provide this information or question your company on these aspects, you should seek these services elsewhere.

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[Image courtesy of Torsten Dettlaff]