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Routing systems matter and make an impact. Here's why.

Margus Sütt

26 Sep 2017 -

5 min read

Margus Sütt

26 Sep 2017

-

2 min read

SMS routes and connections are the core of delivering SMS messages. It’s like a neocortex; where connections help SMS messages move between endpoints and applications. Also, similarly to connections in the brain, there are stronger and weaker connections. Stronger connections are shorter, meaning less mid-points, or none. Weaker connections have multiple mid-points where information can get lost.

What does routing for application-to-person (A2P) messaging 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 negative results, as even a single undelivered SMS message has higher alternative cost.

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 is not backed up with data it is a worthless vanity metric. Frankly, delivery rates depend on the routes your vendor has selected and the quality of those routes. 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.

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 deliver to the percent or two is the enemy to the business.

1% matters. A lot.

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. Furthermore, it takes a lot of time to track down messages stuck in longer routing chains.

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. As mentioned before, Messente focuses on business-critical SMS messages, which is why our adaptive routing system adds several thoroughly tested, high quality routes into a single setup. It doesn’t make our SMS unit price among the least expensive, but it does make our delivery rate 2-3% higher than the market average.

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, etc. A 3% delivery rate improvement means a better customer experience for that many more people, impacting the bottom line more than a cent here or there per SMS.

The second Payment Services Directive (PSD2) impact: Read the full report.


Margus Sütt

Key account manager

Margus works as a business analyst at Messente. Identifying new opportunities and going deep into industries Margus consults Messente's key customers to help their businesses to advance.




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