- Ever since Facebook acquired WhatsApp for $19 billion (Sh1.9 trillion) in 2014, they have been trying to find a way to make money from this free service.
- SMS is currently one of the most efficient forms of direct marketing.
- Last week, WhatsApp announced that it would let businesses pay to send messages to their customers.
If you own a smartphone you are most likely one of the 1.5 billion people worldwide who use WhatsApp every month. This simple to use application made it cheaper and easier to send messages compared to SMS. WhatsApp users collectively send 60 billion messages everyday, almost four times the global number of SMS sent everyday.
Ever since Facebook acquired WhatsApp for $19 billion (Sh1.9 trillion) in 2014, they have been trying to find a way to make money from this free service. SMS is currently one of the most efficient forms of direct marketing. Last week, WhatsApp announced that it would let businesses pay to send messages to their customers. Will this take off?
One of the reasons a business may consider using WhatsApp instead of SMS is because you can send more content in a single message.
SMS is limited to 160 characters, but on WhatsApp you can send up-to 4,096 characters. Indeed this entire article could fit in a single message. They say a picture is worth a thousand words, and with WhatsApp you can send images, audio, video and even file attachments within a single message. Marketers will love being able to send you pictures of the products being sold.
Another key feature is that with WhatsApp it is possible to tell if a recipient has received and even read a message.
This will be very effective for marketers as they will be able to tell if their target audience has seen a message. This, however, is a double-edged sword as consumers will also be able to prove that a business has actually received and read a customer service complaint that they have sent.
Increased security is another reason why businesses may look favourably on WhatsApp as a customer communication channel. Messages on WhatsApp are end-to-end encrypted. This means no third party (including WhatsApp) can intercept the message as it is encrypted on the sending device and only decrypted by the recipient’s device.
While all of these seem to favour WhatsApp, there are still some important reasons why a business may chose to remain using SMS. The first reason is that WhatsApp requires an Internet connection and there is still a big part of the population without access or unable to afford this and a smartphone. If your business serves this demographic, SMS is still your best option right now. WhatsApp also imposes strict restrictions in terms of which of your customers you will be allowed to send messages to and how. The customers must have explicitly opted in to receive communication from you and in many cases are expected to have sent a message to the business first, before you can message them. SMS has fewer restrictions meaning a business’ current contact list can be used without additional processes.
The price of SMS has been reducing over the years, making it a cost effective marketing channel. Providers have bulk discounts depending on the number of messages you intent to send. While WhatsApp is free for individuals, businesses will have to pay to message their customers.
Early indications are that the price will be higher than SMS. Ultimately, the price and terms of service are subject to Facebook which owns the service. By comparison, SMS is governed by market prices and not subject to a single company.
Instant messaging channels like WhatsApp are clearly the future of communication and businesses need to adapt to this new modes of communication for marketing and customer support. SMS will still play an albeit diminished part in business to consumer communication.
Mr Kimenye is CEO of Ongair, an instant messaging service provider