It’s common for an organization with a high-volume of SMS traffic to put up their business for bid and ask several SMS providers for proposals.
Bids, or tenders, are long-winded processes involving multiple decision makers and three or more SMS providers. The easiest decision seems to be choosing a provider based solely on price. That’s completely understandable – SMS costs occupy a line on the monthly expense report and minimizing costs is logical. And SMS definitely isn't something that comes to mind first thing in the morning or as the last thought before bed (at least we hope not.)
However, there are clear risks following that train of thought. So, here are important things to consider when selecting a global SMS provider.
1. Legitimate Routes
All proposals should be somewhat close in price, as SMS provider costs from network operators and hubs are similar when comparing routes in the same country, on the same network, with similar delivery rates.
If there is an outlier in the proposals with a significantly lower price, it’s questionable. Is the provider trying to win the business by running a loss, then raise the price in the future? But that doesn’t make business sense in this industry (there’s nowhere to make up the loss).
We’ve found that proposals offering a significantly lower price are comprised of grey routes. This poses a risk for the client, as messages can ultimately be undelivered at high rates (like all of them), and they still incur costs. Grey routes are typically connections with network carriers that are not contractual, and the provider is exploiting a loophole. The carrier can shut off the connection without the client or the provider ever knowing.
We've come across such cases in the past. One case involved a lengthy tender, with the bid granted to the (significantly) lower proposal, and their software was deployed. There was only one small issue – the provider did not establish legitimate routes with operators and hubs. Essentially, the client was sending messages through a provider who was unable to deliver those messages, while being unaware that they were undelivered. Imagine the alternative costs incurred by the client.
Some primary reasons businesses outsource SMS messaging is to forgo building the software, brokering the networking connections, and maintaining the system. With high volumes, things can go wrong, and it’s the partner’s responsibility to maintain delivery rates and re-route connections when needed.
We think that personalized support is the foundation of good software products and APIs. Whether it be having a real person to call to discuss time-critical cases or a transparent way to find solutions, having one point of contact is invaluable. In addition, it simplifies geographical expansion and monthly administration.
So, understanding how support is handled is crucial to direct or indirect costs. Is support from an account manager factored in the price or is it an additional cost? If support is not included and a client does not buy support, the responsibility falls on the client’s tech team, which costs the client indirectly from the cost of the service.
The SMS provider must be able to go where the client’s company goes, otherwise, the client will end up looking for another provider to support a different geographical region. Eventually, clients manage a mess of several APIs to do the same thing (and separate tenders for each region).
Does the SMS partner align with the company’s growth plans and do they understand the company’s business processes? Do they exist in regions we want to go, or do they plan on going to those geographical markets to forge new connections?
Expanding geographically or offering new services means that the SMS partner must be able to scale with the client, whether it be connections in geographical markets the client intends to expand to or the same breadth of services across the world. Looking to the future leads to a better decision, which builds a stronger partnership while reducing the indirect costs of repeating the bid process in other markets.
4. Experience in the field
Experience leads to expertise. A potential SMS partner must have experience in the industry and have good relationships with network providers and hubs. This includes substantial throughput via various channels as well as a strong prioritization system. Also, the SMS provider should have a product roadmap that elaborates their perspective of the market. These two variables provide insight into whether the SMS provider knows how to expand into new markets and has the capability to build on their technology.
They matter even more for business-critical messaging, as ripping and replacing APIs at scale isn’t a fun thing to do. So, a good partner has their eye on the industry - what’s the next phase of global, mass messaging? Businesses are ready to implement new features once there’s a use case – features like number lookup, omnichannel messaging, WhatsApp capabilities, Google RCS, etc. Customers shouldn’t be waiting on their SMS partner.
A mutually beneficial, long-term partnership is built on trust and it’s something the customer should feel good about. A 5% lower price can lead to more work for the customer in the future.
There are a couple of aspects to transparency:
- Pricing – some providers might have fees in place, which
aren't apparent at first glance. As negotiations tend to anchor around cost per
SMS, which is understandable, other factors tend to be ignored. But these costs
are usually significant in implementing and using a provider’s service.
- Some questions to ask: What are the costs associated with
integrating the software? How much time is required from our development team?
Are there costs associated with having a personal account manager or support?
Are there other costs associated with using the software, like monthly fees?
- Complete analytics – Having access to instant and detailed delivery reports, which provide information about if and when, messages are delivered and help analyze, organize, and track the performance of the service. However, analytics are only accurate if the provider is using legitimate routes.
6. Partner reputation
When outsourcing an important building block of your product or service, selecting a reputable and solvent partner is paramount. It is completely normal to request detailed financial information, like revenue and profits, to get a clear image of the provider’s solvency.
It’s also common to request credit reports from independent sources to understand how they’re working with their partners (mobile network providers & hubs,) and whether traffic will flow long-term.
There you have it. If you follow these guidelines, we are confident that you’ll find a suitable partner for your company. Good luck!