What Is SMS? How Phonexa Transforms SMS Marketing for Business

This article is more of a technical look at SMS messages, including how they work, compliance requirements, and technical limitations. I cover some SMS marketing basics here as well, but there are more in-depth guides on SMS affiliate marketing and bulk SMS marketing.

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I bet you received marketing SMS thousands of times, both helpful and annoying. And I bet you’ve unsubscribed from receiving marketing SMS at least once in your lifetime – no one can withstand marketing pressure forever.

Now let’s turn the tables. From a marketing perspective, you’d only want to send well-crafted, personalized SMS messages to the right user at the right time. You can’t settle for less if you want to maximize engagement and eventually generate sales.

To be accurate with your SMS marketing, you surely need to know the marketing part – what your marketing SMS should look like for different groups of consumers, when it is best to send marketing SMS, and what they should look like – but it also helps to know what SMS is from the technical perspective, as well as the compliance requirements and limitations you may face.

Get started with Phonexa now to uncover new SMS marketing opportunities for your business.

Actually, the SMS guide below may offer a fresh perspective on SMS communication, leaving you with new ideas or – if you’re doing it right – more confidence in your SMS marketing strategies. So read on if you want to take your SMS marketing to the next level with insights that you may not even find anywhere else. And, of course, Phonexa’s tech stack has to do a lot with it.

­How Do SMS Messages Work for Marketing?

Did you know 98% of SMS messages are opened, giving you an opportunity to send your marketing message to your audience and have it read and – hopefully – engaged with. And while SMS is limited to 160 characters unless you split the message into several consecutive chunks, it’s a globally accepted standard for short communication you cannot ignore.

So if you think SMS messages are old, outdated, and constantly losing attention, you might be surprised by this: Over 48% of consumers prefer to receive brand updates via SMS messages, followed by emails (22%), app notifications (20%), and direct mail (8%).

Here are the advantages of SMS messages for marketing:

• High open rates: Unlike emails, SMS messages are usually opened within seconds to minutes, making it a great channel for urgent communications. Likewise, you can use SMS as a reserved communications channel for consumers who don’t respond to emails.
• Easy access: SMS messages are delivered instantly to all consumers who own a mobile phone, including those who don’t have internet access. SMS works on all mobile phones, enabling unlimited reach.
• Built-in personalization: Knowing the consumer’s phone number also means you know their location, name, and – with a performance marketing ecosystem like Phonexa – their full customer journey, including where they came from, industry-specific details like their credit score, and anything else in your Phonexa database or integrated CRM system.

At the same time, SMS is naturally a very specific marketing tool with obvious constraints. You have to know your audience, the right timing, and the right messaging, and align SMS with your other marketing avenues, such as email marketing or phone calls.

For example, while SMS would be great for follow-up and reengagement campaigns, as well as informational campaigns like appointment scheduling or confirmation, it’s not a suitable tool for fully-fledged campaigns built around storytelling, visuals, and long-form content. Overall, SMS marketing has a great technical component to it without much touch on the consumer’s emotions.

Important: Performance marketing ecosystems like Phonexa are one step ahead of the competition. Not only do we provide the best-in-class platform for sending bulk yet personalized SMS messages to consumers, but we also allow you to automate the process based on hundreds of data points collected throughout the customer journey and, most importantly, coordinate your SMS campaigns with your other lead nurturing efforts.

“The US ad industry alone is reported to have grown by around 5% annually across 20 forms of media, and it’s not going anywhere soon. So realistically, you just need to make sure that you are giving yourself the best chance, giving yourself the armory and the tools in place to actually stay ahead of that curve or at least be part of that curve and not be left behind.” – David Pickard, CEO, Phonexa, during the Affiliate Marketing Podcast

Omnichannel marketing coverage creates natural experiences for consumers, guiding them smoothly through the marketing funnel without redundant interactions, repeated questions, or suboptimal distribution. Every lead gets what they want at every step of their journey.

Get started with Phonexa to improve the quality and timing of your SMS marketing.

How SMS Messages Work: Technical Breakdown

Here’s how SMS messages work technically:

1. An SMS is created and sent via a mobile carrier or SMS gateway to a Short Message Service Center (SMSC). Message encoding uses either GSM 03.38 (GSM 7-bit alphabet) or UCS-2 (ISO/IEC 10646), depending on the characters used. The overall SMS structure is defined by 3GPP TS 23.040. When sent by an application, submission typically occurs via SMPP or HTTP APIs.
2. The SMSC determines the recipient’s network – often via intermediary carriers or aggregators – and routes the message accordingly, signaling standards such as SS7 (MAP) or Diameter, in accordance with 3GPP TS 23.040
3. The recipient’s network delivers the SMS to the recipient’s device, where it is decoded and displayed according to the applicable encoding standard. If supported, returns a delivery report to the sender indicating the delivery status.

 

Within mobile networks, SMS messages are transported using SS7 (MAP) in 2G/3G networks or Diameter signaling in LTE and 5G networks. These signaling protocols handle message routing, delivery, and acknowledgments between carriers and mobile devices.

If, however, you’re sending an SMS through an app, you should know that applications do not connect directly to mobile networks. Instead, they send SMS messages through SMS gateways or aggregators using application-level protocols such as SMPP (Short Message Peer-to-Peer) or HTTP APIs. SMPP connections may be secured using TLS to encrypt data in transit, a requirement increasingly demanded by carriers.

SMS Marketing Campaign Examples

Segmentation

One of the least conventional ways to segment your audience is through an SMS message. In some cases, though, it’s quite effective, like if you’re allowing your subscribers to choose the niche or product they’re interested in – in a way, you’re asking them to choose the line of communication and the customer journey you’re going to offer them.

In the example above, as many as 14 niches are presented to the consumer, informing them of the brand’s scope and scale they might not have been aware of before, and opening opportunities for cross-selling. For example, someone who originally subscribed to top A might want to explore related topics or products, or even try a completely new one, especially if their previous experience with the company was superb.

Cross-Selling & Up-Selling

Since SMS messages are great for decision acceleration, it’s quite natural to use them for cross-selling and up-selling. For example, a consumer buying a bed might also want a bedside table, or linen, or anything that goes with it, or they might want the premium version of the product, more features, or features that make more sense for them.

The best thing about SMS cross-selling and up-selling is that it looks very organic and almost never causes annoyance, disengagement, or unsubscriptions. The worst-case scenario is that the consumer just ignores the message, which isn’t a big deal unless your average engagement is fine. Even if they don’t buy on the spot, they become aware of the product in question and might want to change their mind later – and you’ll be able to support that with omnichannel marketing.

Speaking of which, using Phonexa is about connecting with consumers at the right time and on their terms, without annoying them with irrelevant messages. Free data flows within our comprehensive performance marketing platform enable you to choose the best timing for SMS, emails, social media posts, direct text messages, and other forms of engagement.

Get started with Phonexa to grow your marketing through omnichannel consumer insights.

Behavior-Triggered SMS

One of the most effective marketing strategies is to send SMS messages based on the previous behavior of a consumer – just like you’re sending behavior-triggered emails with E-Delivery. For example, you can set up a follow-up SMS for users who viewed a product but didn’t convert, those who abandoned the cart before completing the purchase, as well as those who interacted with your marketing assets, such as calculators, forms, etc.

In every case, bulk SMS campaigns should add a bit more nurturing to nudge the consumer toward conversion. For example, you can provide a discount, or – if the SMS is not immediate – update them on a drop in the product price, or anything else that makes the offer more appealing.

But then again, to make such interactions possible, you need a comprehensive marketing ecosystem that tracks your leads across channels and touchpoints and uses the collected behavioral, demographic, firmographic, and psychographic insights for personalized marketing. This is why Phonexa is so great for bigger companies – we keep everything in one place so you can get a clearer view of your marketing without having to jump between platforms, systems, and reports.

Take a product tour to see Phonexa in action, including two core products and six features.

How to Stay Compliant When Sending Marketing SMS in the United States

In the United States, marketing SMS is regulated by the Telephone Consumer Protection Act (TCPA) and CTIA guidelines, with the former establishing what SMS are legal to send (including consent, timing, and consumer rights) and the latter defining how SMS should be used (opt-in language, content, messaging frequency, etc). To safely send SMS messages at scale, you must comply with both the TCPA and CTIA, as even legal messages can be blocked if they violate the carrier’s requirements.

Important: The key idea to keep in mind is that violating TCPA creates legal risks, including lawsuit risks, whereas violating CTIA only extends to the SMS not being delivered. Likewise, TCPA violations may risk results in the carrier blocking your SMS messages, followed by a lawsuit.

Here are some common TCPA and CTIA violations resulting in SMS being blocked:

• No prior express written consent. Without a doubt, obtaining prior written consent from a consumer is the number one priority before you can send them marketing SMS. It’s also important that consent is given knowingly by the user; for example, using pre-checked opt-in boxes might violate TCPA compliance. No less importantly, brands that generate and sell traffic should retain consumer consent and transfer consent metadata to the buyer when the lead is sold. On the advertiser’s side, it might make sense to review the landing pages where the traffic is generated, including checkboxes, disclosures, brand naming, consent language, and other pertinent nuances.
• Violating the TCPA timing. According to the TCPA, you cannot send marketing SMS before 8.00 a.m. or after 9.00 p.m. in the recipient’s local time. So if your consumers are in different time zones, you cannot just batch-and-blast your emails to everyone at once.
• Ignoring the consent revoke requests. Under TCPA, consumers can revoke consent easily and immediately by replying with the “STOP” message (sometimes also CANCEL, QUIT, END, etc.), as per CTIA and carrier guidelines. Ignoring or delaying consent revocation leads to TCPA violation – even if you send only one more promotional SMS after receiving the STOP message.
• Not following the opt-in disclosure. When a user agrees to receive marketing SMS, they agree to receive them from specific brands, at specific frequencies, of specific types, as well as other nuances that might be included in your opt-in disclosure. In this context, frequency mismatch – sending more marketing SMS than the limit set in the opt-in disclosure – is the most common CTIA trigger. Among other triggers are content mismatches, brand mismatches, and changes in the type of marketing SMS over time.
• Unregistered or misregistered SMS.  Before you can send marketing SMS, you must register with the mobile carriers – both register the business and each type of SMS messaging separately – telling them who you are, what type of messages you are going to send, and how often. If, however, you send marketing SMS without 10DLC or short code registration, the campaign is often blocked or throttled.

Last but not least, engagement also matters. Carriers track engagement, volume, spam reports, send frequency, and other data to detect bad messaging behavior and protect their subscribers from unwanted SMS. Ultimately, low-quality and poorly timed SMS will not be delivered.

In the heavily regulated markets with strict compliance rules, Phonexa might be your safest platform to send marketing SMS without worrying about legal implications:

• SOC 2 compliance audits, including Type 1 and Type 2 reports, confirm that Phonexa has appropriate controls for security, availability, confidentiality, processing integrity, and privacy.
• ISO/IEC 27001:2005 & ISO/IEC 27001:2013, confirm that Phonexa has structured programs to manage and protect data.
• PCI DSS Compliance, confirming that Phonexa is compliant with the Payment Card Industry Data Security Standard (PCI DSS), which governs the secure handling of payment card information
• CDSA Certificate of Compliance, confirming that Phonexa has met industry-recognized controls and practices for protecting digital content and maintaining secure systems.

To learn more about Phonexa’s certification and compliance, click here.

Phonexa’s full compliance doesn’t guarantee by default that all marketing SMS are going to be compliant – it’s absolutely up to you to make them compliant – but it provides you with a compliant environment for SMS marketing and lead and phone call tracking, distribution, and analytics.

Get started with Phonexa to learn more about how to make your SMS marketing compliant in the United States.

E-Delivery: SMS Marketing, Well-Timed & at Any Scale

If you’re a high-volume consumer email sender – an affiliate marketer, network, or lead buyer – Phonexa’s E-Delivery can take your email and SMS marketing to the next level, from sending personalized email sequences at scale to ensuring 100% deliverability across ESPs. In other words, you’ll be able to send the right email or SMS message to the right consumer at the right time.

 

Here’s what you can do with E-Delivery:

• Multi-channel content distribution across email and SMS channels
• Comparing inbox and SMS data to focus on the best-performing campaigns
• Split tests for emails and SMS messages
• Behavioral segmentation to enable personalized email and SMS messages
• ESP integrations to leverage the functionality of leading email service providers

If you’re already using Phonexa’s LMS Sync for leads or Call Logic for phone calls, you can use SMS messages alongside your emails in real-time. This gives you plenty of marketing opportunities, such as reengaging and remarketing leads and phone calls that didn’t convert on the first try or disengaged for any reason.

With E-Delivery, no leads or phone calls are lost forever – instead, you can monetize consumers that you would otherwise not follow up on. Technically, to unlock SMS marketing within Phonexa, you should set up SMS delivery channels and get approved for text messaging.

Here’s how you can set up SMS marketing messaging within Phonexa:

 

For more details on setting up SMS campaigns, visit Phonexa’s SMS/MMS support center.

Your Enterprise-Grade Software Suite to Uncover Marketing Insights Across Channels

With SMS an important yet not the only marketing channel, it’s crucial to coordinate your SMS campaigns with other marketing avenues, such as email marketing, affiliate marketing, social media marketing, phone calls, paid ads, and more. This is why you need Phonexa.

With our comprehensive lead and phone call tracking, distribution, and analytics platform, you get free data flows, real-time reports, and – above all – you get it all in one place without having to jump between different platforms and tools. With Phonexa, you know who your leads are, where they are coming from, when and why they engage, and how you can make it better for them.

“Put everything in one place – that’s what we tried to do. Phonexa is about tracking everything – the call outcomes, the source of the calls, the route that the call went through, which publisher did it come from, which IVR model it went through, which buyer bought the lead, and what happened next – and then reporting on everything to the point where you can then analyze it in real-time.” – David Pickard, CEO, Phonexa, during the Pioneering Pay-Per-Call Excellence podcast

Phonexa uncovers more insights into leads and calls than any other platform and helps you keep it all together so you never lose the forest for the trees. You’re confident, fresh, full of energy, and your ROI grows. We’ve done it many times, and we’ll do it for you and your business as well.

 

Here are the two core products you get at a single price:

Here are the six extra features you get as a Phonexa client:

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Frequently Asked Questions

How do SMS and text messages work for marketing?

The biggest advantage of SMS for marketing is high open rates and quick engagement. If sent at a reasonable time, over 90% of SMS are opened and read within a few minutes, which is perfect for time-sensitive campaigns. Likewise, SMS doesn’t require an internet connection or apps.

What is the character limit for SMS?

A standard SMS limit is 160 characters. However, if an SMS includes non-standard characters – emojis, accented letters, non-Latin scripts – the limit reduces to 70 characters. If you exceed the limit, the SMS is split into several linked SMS, each containing 153 characters for GSM-7 encoding and 67 for Unicode (UCS-2) encoding.

Is SMS a secure marketing channel?

SMS messages are not encrypted, which means carriers can technically access their content, and SMS is theoretically vulnerable to SS7 network exploits (SS7 is the signaling network phone companies use to make the global phone system work).

That said, for most marketing campaigns, there’s no need for encryption, especially if you’re doing marketing correctly and comply with the relevant rules and regulations. Messages like offers, reminders, notifications, links, or promo codes don’t really require confidentiality or protection.

What is the difference between a text message and an SMS message?

Every SMS is a text message, yet not every text message is an SMS. For example, a text message sent on social media – WhatsApp, Telegram, or Viber messages – isn’t an SMS message. On the other hand, when used in the right context, text messages can mean SMS.

What are the most important SMS metrics and KPIs?

The most important SMS metrics and KPIs are delivery rates, open rates, and conversion rates, all of which are measurable with Phonexa’s E-Delivery. At the same time, there are dozens of SMS marketing metrics you can measure, such as revenue per SMS, click-through rates, and many more.

What are good SMS deliverability rates?

The rule of thumb is that the minimum health email deliverability rate is 95%. Anything less may indicate problems with your SMS marketing campaigns. In fact, most SMS marketing campaigns achieve 98% to 99% deliverability if executed correctly.

What are good SMS conversion rates?

The actual SMS conversion rates depend on the industry, campaign type, audience, level of personalization, wording, timing, and other factors. It would be safe to say that the average conversion rate is the highest for technical campaigns like sending a long code (over 90%), followed by reminders and appointment confirmations (up to 60%), time-sensitive and limited offers (up to 20%), and general promotional offers (up to 10%).