What does SMS routing mean though? Essentially, it's changing and reorganizing different connections between end-points to increase the delivery rate.
As Messente focuses on business-critical SMS messages, the delivery rate is crucial due to each undelivered message having a large negative impact on the customer’s business. Thus, the cost of an undelivered message can be hundreds of times higher than the SMS cost itself.
Each route is a connection to a partner, operator, or carrier, that enables the transfer of the message data to the recipient. In our case, a route is a connection between us and the operator to whom the customer’s number belongs to. Our job is to enable our customers to send messages via this connection.
True delivery rate
When discussing delivery rates, any vendor can claim a 98-99% delivery rate. This seems like an appealing number, but if it’s not backed up with data it’s a worthless vanity metric. Frankly, delivery rates depend on the routes your vendor has selected and the quality of those routes.
The best bet is usually a direct connection to the operator, without any middlemen. Although, this isn’t always possible. In some markets, operators only allow certain partners to provide connections to end customers or allow the local companies to enable foreign service providers the use of their connections without giving them direct connections themselves. These partnered connections vary in quality. So, constant testing and monitoring is required to provide truly high delivery.
And to make things more difficult, back-door workarounds and hacked connections exist as well. These are known as grey routes, which are used when a company who has a mobile network operator’s license sends SMS messages between network operators that don’t have a traffic agreement in place between each other.
The price pressure due to competition has devalued the importance of true delivery rates, as companies are more focused on saving fractions of cents on every SMS, rather than making sure their vendor can deliver the highest rate of messages. Thus, more of these grey routes pop up that promise a super low price, yet fail either outright or after a few weeks leaving the customer with a higher priced alternative and additional integration costs, or undelivered messages and business losses.
Now, regarding business-critical SMS messages, it’s important to understand true delivery rates. Why? Because if the lifetime value of one converted customer via SMS is, say, 500€, suddenly delivering every SMS matters and splitting cents loses priority. A delivery rate of 95-97% for most vendors isn’t a problematic target, yet variances in delivering to the percent or two are the enemy of the business.
The typical amount of undelivered SMS messages due to routing issues among competitors is approximately 3-5%. That means after attempting to deliver SMS messages to 1000 mobile numbers, about 30 to 50 of them will not be delivered since they got lost somewhere along the routing chain.
These can stem from peak times in different markets, incorrect priorities in the delivery chain (PIN codes need to be delivered in seconds, but a marketing message can usually wait 30 seconds), etc. Furthermore, it takes a lot of time to track down messages stuck in longer routing chains as each vendor might have their own time-zone, priority and escalation procedures for the support seeker.
A high-quality vendor-operator connection doesn’t just cover high delivery rates that result from the lack of technical issues but also message prioritization for truly time-critical messages such as PIN codes. Even on peak delivery times such as the holidays. Not only does the delivery need to happen, but it needs to happen in a reasonable timeframe, this drives down the amount of resend requests a customer makes as each request leads to a message sent and charged for.
1% matters. A lot.
Regarding business-critical communication, where results and return are extremely valuable, a 1% increase in the delivery rate results in an exponentially better return compared to the cost of a single SMS. So, if we deliver an additional 1% of messages adding 10 more potential conversions, even a 5-euro gain will pay for half of the campaign in most of the world.
As mentioned before, Messente focuses on business-critical SMS messages, which is why our adaptive SMS routing system adds several thoroughly tested, high-quality routes into a single setup. It doesn’t make our SMS unit price cheap, but it does make our delivery rate 2-3% higher than the market average as well as help mitigate peak-time delays and delivery issues.
A slightly higher price for a delivery increase of 3% means 3% more customers are reached, less PIN code resends, appointment reminders are delivered, more customers know their taxi has arrived, more customers can pick up their package on the way home, more conversions on marketing campaigns etc. A 3% delivery rate improvement combined with timely service, means a better customer experience for that many more people, impacting the bottom line more than a cent here or there per SMS ever could.