The last messaging spike at Tise, a well-known secondhand marketplace, was a costly surprise. Their SMS traffic unexpectedly increased from 2,000 messages to over 12,000 per day, the monthly bill for their SMS traffic increased by more than 400%—all due to AIT traffic spike.
When the team examined the campaign, they discovered that text messages had been sent to fraudulent numbers via expensive routes. What’s worse, they seem to have paid for multipart message triggers and failed delivery attempts.
And, their previous service provider offered little to no support.
Amidst artificial traffic spikes, rising carrier surcharges, and tightening vendor budgets, simply optimizing SMS campaigns is not enough. As an array of threats creep up, eating away at SMS expenses, it becomes essential to consider unit economics, including hidden fees and cost drivers.
In this guide, we will walk you through 13 proven strategies to reduce messaging expenses significantly while ensuring compliance and maximizing ROI.
Behind the scenes of the SMS delivery process
SMS cost optimization can be done right only when you know how text messages travel from your messaging platform to the recipient’s mobile. And, it is far from a direct line of communication.
Text messages don’t take a direct line from your messaging tool to the end user’s mobile. This multi-step journey involves APIs, carrier routing, and messaging protocols, which impact SMS costs along with the speed and quality of deliveries.
Here’s a look under the hood of the delivery process:
Once you hit send, your system shares your message via APIs to your SMS service provider (like Messente).
Your SMS provider then routes the message via the most efficient route to the user’s network operator.
The recipient’s carrier will then deliver the message to their mobile device.
The Short Message Peer-to-Peer (SMPP) protocol facilitates message exchange between messaging service providers and mobile network operators. Messaging platforms either deliver these messages directly to the carrier or through trusted global partnerships.
Another vital step in this delivery chain is verifying whether a mobile number has been ported from one operator to another using a mobile number portability (MNP) check. This helps ensure that the message is shared with the right network operator.
The real cost of sending SMS
Every SMS message that you send will incur a complex ecosystem of costs ranging from carrier fees and aggregation markups to compliance surcharges and volume tiers. Let’s start with the common SMS pricing models and then dig deeper:
Pricing model | How it works | Ideal fit for |
Pay-per-message | Offers the flexibility to pay only for messages sent | Low volume senders |
Subscription-based | Preset volumes incur a pre-determined monthly fees | High-volume senders with predictable SMS marketing |
Committed use | Discounts are offered for annual or monthly volume commitments | Enterprises with large-scale messaging operations |
With the base fee in place, there are still other cost drivers such as:
Carrier costs: Direct costs paid to operators as cost per SMS segment set forth in carrier agreements
Maintenance costs: Monthly operator fees (€100–€1,000+), uptime SLAs (<20 s OTP delay)
Aggregation mark-ups: Layers of concealment on top of carrier fees for SMS messages laid by aggregators
Compliance and registration: SMS marketing or brand registration fees (e.g., US 10DLC)
Fraud & AIT: Traffic rise caused by bots triggering fake OTPs
Message encoding: GSM-7 vs. Unicode (160 vs. 70 characters), emojis can double or triple the segment count
Routing tiers: While grey route SMS may look cheap upfront, the message drops and resend triggers may escalate costs
When you overlook these various drivers, your SMS expenses inflate and your ROI dwindles. To battle these hidden cost drivers head-on, opt for a messaging provider like Messente, which uses direct routes to connect with the carrier.
With Messente, you can take back control of your marketing budget, using its free tools, including SMS length calculator, number lookup API, and AIT detection to optimize each layer of your SMS route.
13 Proven strategies to ensure your SMS costs reduce substantially
Here’s a breakdown of the 13 proven strategies that can help you lower your SMS costs without compromising your deliveries or diminishing your ROI.
1. Lower carrier costs with direct-to-carrier providers
Did you know? Most aggregators utilize complex SMS routes with multiple layers of intermediaries, each adding its own markup. The result is inflated costs per message and delivery issues, such as latency.
Partnering with providers who offer direct-to-carrier connections can help you avoid high prices and spotty deliveries. Messente’s extensive local network partnership with Tier-1 mobile carriers across 190+ countries ensures reliable and faster delivery at lower costs. Best of all, you get complete visibility into routing paths.
How do you verify if your provider is an aggregator? Just take a closer look at their network map. If they don’t highlight any direct carrier connections, they could be an aggregator.
Suppose you are worried about overpaying for your business SMS marketing campaigns. Use Messente’s SMS Cost Calculator and compare our transparent plans with your current platform rates.
2. Identify number type and status to improve list hygiene
Scheduling a campaign without verifying the numbers in your list is a massive risk. Especially if your database is riddled with invalid, disconnected, and VOIP numbers.
To avoid the chances of paying for messages that never get delivered, use Messente’s Phone Number Validator. It checks every number in real time for validity, MNP status, line type (VOIP, landline, mobile), formatting, and more.
Protecting your sender reputation and reducing failed sends is as easy as scrubbing your contact list before SMS campaigns. When you’re working with large-scale lists, you can integrate our Number Lookup API directly into your CRM to speed up the process.
3. Shorten concatenated messages to reduce messaging costs
If your message exceeds the 160-character limit for GSM-7, it will be instantly split into multiple segments. When you include emojis, curly quotes, or any other special character, the message type would automatically swap to UCS-2 encoding.
The worst part is that the UCS-2 character limit is only 70, which is less than half of the GSM-7 limit. Messente’s Auto-Replace Tool identifies and converts these UCS-2 characters into GSM-7 equivalents.
Our SMS Length Calculator helps users determine the character count, the type of message, and the number of parts it will account for. It empowers users to edit copy on the go, reduce unnecessary words, and keep SMS within the expected length.
4. Use HLR lookups to avoid sending SMS to invalid numbers
HLR (Home Location Register) lookup searches dig deeper than basic mobile number or carrier check validations.
The HLR lookup functionality embedded within Messente’s Number Lookup API helps spot invalid and inactive numbers in your campaign. They prevent failed OTP deliveries, block inactive numbers, and refine audience segmentation.
5. Leverage bulk discounts and scheduling for off-peak sends
You can save money better by planning your campaigns well in advance. Messente’s intuitive dashboard helps you schedule SMS campaigns for a future date and time.
Carrier prices in certain regions (e.g., India and the UK) decrease significantly during nighttime hours. You can queue text messages during these off-peak periods (overnight or weekends) using the SMS scheduling option in our dashboard.
6. Eliminate fake traffic with AIT protection
Looking back at Tise’s experience, we can see that SMS volumes can spike 6x, driving a 400% cost increase in just one month due to AIT traffic.
Messente’s fraud prevention layer actively spots and secures your account against artificially inflated traffic. It uses a carrier-level detection layer to flag sequential numbers, unusual foreign routes, and safeguard your messaging costs and sender reputation.
7. Use alphanumeric sender ID where allowed
An alphanumeric sender ID allows you to use a branded name like “Messente” or “YourBrandName” in place of a standard phone number. While this option may not be available in countries with strict regulatory norms, it is popular across several parts of Europe and Asia.
Although it doesn’t directly lower the per-message spend, it can help induce trust and improve brand recognition. These branded messages help enhance the effectiveness of your SMS strategy by increasing brand recall and response rates.
8. Use segmentation for targeted, fewer messages
The common belief that more messages equal more engagement cannot be further from the truth. Overmessaging can lead to increased disengagement and higher messaging expenses.
Segmenting your audience based on their user behavior, demographics, purchase history, and more can help you send personalized messages. Personalization enables you to tone down the overall message volume while improving conversion rates.
For example, you can send discount codes to customers who have abandoned their carts. Likewise, sending reengagement offers to inactive customers may incite a few reactivations. Sending VIP perks to high LTV (life-time value) subscribers can increase brand loyalty and customer engagement.
Messente’s Phonebook API and intuitive dashboard help you manage contacts, segment audiences, and tailor effective, cost-efficient SMS marketing.
9. Compress links and use branded short domains
The usage of long URLS in SMS can send messages over the character limit and break them into multiple segments. Most often, links created using generic URL shorteners can be flagged as suspicious.
On the other hand, a branded short domain can not only trim the character count but also reduce instances of your SMS being blocked or undelivered. A trustworthy link will enhance your deliverability and maximize the effectiveness of your SMS campaigns.
10. Negotiate committed-use discounts for large message volumes
Minimum usage brackets and higher carrier fees can diminish the effectiveness of your marketing strategy. And, changing SMS marketing platforms halfway through can cause more disruptions than improvements, without mentioning the stress it causes.
And that’s precisely why Messente values its transparent pricing, clearly mentioning its per-message fees and a flat platform fee. As Messente’s pricing scales alongside usage patterns and volumes, you can save money substantially with a committed volume plan. When you commit to a monthly sending volume and hit the higher monthly thresholds, your per-message cost will be lower than the pay-as-you-go bracket.
11. Automate opt-outs to save money and reduce non-compliance
Sending even a single SMS message to users who have opted out not only adds a chunk to your SMS message fees but can also violate regulations like TCPA and GDPR. Non-compliance with these opt-in regulations can result in hefty fines and a damaged brand reputation.
Messente helps handle these critical compliance tasks easily with its instant opt-out processing. It prevents you from paying for text messages that people are no longer interested in.
While you can easily add an unsubscribe link to your SMS marketing campaign, Messente also identifies keywords such as “STOP” and adds the specific number to your blacklist. Once you integrate your CRM with Messente, our webhooks and API communicate the opt-out status to your CRM in real-time.
12. Set up OTT channel fallbacks to reduce your SMS costs
The most cost-effective way to reduce unnecessary expenses is to utilize alternative over-the-top (OTT) communication channels, such as WhatsApp and Viber. Utilizing other marketing channels to establish a fallback workflow for sending messages, including transactional notifications, can result in significant cost reduction.
A successful omnichannel messaging strategy creates a valuable communication cascade. A communication cascade method helps ensure that your messages are delivered while proactively reducing communication costs.
In practice, if the first effort fails on a primary channel like SMS, the system would revert to the lowest cost OTT marketing channels, (i.e., WhatsApp or Viber), until only multimedia messaging service is left with email marketing in the mix.
13. Monitor and automate campaigns to lower messaging expenses
You can spot and eliminate redundancy effectively by monitoring the performance of your SMS campaigns and automating your communication workflows. It will help you stay on top of your delivery rates, open rates, and other conversion metrics to decipher what's working well and what can be improved.
Messente's real-time analytics and reporting features will help you do the heavy lifting by turning your messaging and customer data into actionable insights. You can use these real-time customer insights to optimize your campaigns to maximize your ROI.
Best practices for a cost-effective marketing strategy
Register for 10DLC to avoid surcharges while sending SMS.
Run character audits to minimize message length and optimize encoding.
Stop UCS-2 encoding for non-Latin scripts unless necessary, as it doubles character counts.
Segment ruthlessly to personalize your SMS and reduce overall volume.
When you receive messages related to opt-outs, honor them immediately to ensure regulatory compliance.
Beware of hidden carrier fees by reviewing contracts thoroughly.
Choose the right number type (e.g., short codes for high-volume, long codes for conversational).
Measure quality via conversion rates, CTR, and A/B testing, not just delivery rates.
Ask providers about direct connections, partners, routing changes, and testing frequency.
Test periodically to verify service; be wary of offers 15–20% below market rates.
Renegotiate pricing annually, considering predictable increases (e.g., 7–10% in Norway, UK, Sweden).
Wrapping up
Toning down your SMS expenses is much more sophisticated than merely opting for an SMS service with a low price per message. Taking a strategic approach that optimizes the entire messaging cycle, from list integrity to message content and channels that you use, can help reduce your marketing spend.
By working with a provider like Messente, which provides transparency, innovative tools, and specialized knowledge to implement these strategies, you can transform your SMS program – a non-direct-cost center – into a measurable, effective, and powerful engine of customer engagement and revenue generation.
Start sending SMS messages and begin sending smarter with Messente. Sign up for a free trial to see how easy it is to reduce messaging expenses while maximizing ROI and ensuring compliance.
