The Evolution of Messaging: How IP Messaging Is Upending SMS

Opinion: Early adopters stand to benefit immensely

IP messages enable a high degree of engagement and personalization AndreyPopov/iStock

The global enterprise messaging industry accounts for 2 trillion messages. In other words, enterprises send that many messages to consumers worldwide each year. This includes transactional messages such as financial notifications from banks, shipping notifications from ecommerce companies, booking details from travel companies, order confirmations from retail companies and so on. It also includes promotional deals and offers from many kinds of companies.

Most messages are delivered today using good old-fashioned SMS messaging. According to various estimates, this accounts for $30 billion to $50 billion in enterprise spending globally. This means messaging is the essential lifeblood for enterprises and enables them to acquire, engage, transact and support their customers. Consumers find those messages to be essential to stay updated with their personal activities.

However, this sizable enterprise messaging industry is about to change significantly. Newer messaging channels are emerging with far greater capabilities—namely WhatsApp, RCS (Rich Communication Services), Facebook Messenger, Skype, Viber, etc.

The common theme is that these new channels are all based on data messaging using internet protocol, or IP messaging. These channels have enriched person-to-person messaging and are poised to do the same with business-to-consumer messaging. Today, the proliferation of many messaging channels gives businesses a rich variety of ways to reach and engage their customers.

SMS messaging does have many advantages. It is unmatched in terms of universal reach and simplicity. Yet it limits businesses from sending rich, interactive messages to users. Also, regulations limit what messages can be sent from businesses because consumers feel that they cannot control which messages they wish to receive.

Such limitations are overcome via IP messaging. IP messages include rich media such as images and audio and video files. For example, a bank can send a scanned copy of a check along with the transactional alert.

Since IP messages are highly interactive, a message can have interactive, clickable elements, allowing users to respond with a single click. A new type of banking alert enables a customer to report fraud instantly, a delivery notification allows a user to reschedule right away, a bill-pay alert lets the user pay instantly and a big sale alert gets the “buy” on the spot.

While most SMS messaging invokes one-way notifications, IP messages enable two-way conversations. Users can now ask questions in normal human language. IP messaging leverages artificial intelligence and chat bot capabilities to automatically respond to these queries. Users can reply to a promo offer requesting more details, and the chat bot can provide detailed information and enable the user to make a reservation or purchase.

In this way, IP messages enable a high degree of engagement and personalization. A chat bot develops a detailed, personalized user profile and customizes its interactions accordingly. Users get fine-tuned control, enabling them to determine when, why and how frequently a business can send messages to them. IP messaging lets consumers consume content at their own pace.

What an incredible opportunity for enterprises to transform their business communications. For example, an enterprise can now be more targeted in its marketing activities, while being more respectful of consumer preferences than ever before. Enterprises can better engage customers by designing their chat bots to be trusted friends, advisors or assistants—leading to improved conversion rates.

IP messaging means enterprises can take full advantage of this new era of conversational experiences—one where virtually every customer interaction is bound to be driven through conversations. A conversation, therefore, enables businesses to build long-lasting relationships with customers.

And not only is smart messaging better, it’s also more cost-effective. IP messaging offers far greater value for the same or lower cost. Most businesses will begin to add IP messaging to their communications portfolio any day now. This way, businesses can manage multichannel environments by maintaining a user profile that includes a preferred channel. So, by using the correct mix of messaging channels, businesses can optimize user engagement, messaging cost and marketing return on investment.

Messaging will now become a more strategic function for enterprises. It’s a shame that so many enterprises have banished management of their messaging services to the depths of the information technology departments. With its substantial impact on business, it now needs to be returned to strategic business and marketing folks. Why? Because messaging will transform every customer touchpoint, so it must be integrated into most customer-facing business processes.

This combination of functionality and price makes this migration a no-brainer. My firm, Gupshup, sees its customers adopting IP messaging with incredible results.

In sum, IP messaging will transform the messaging industry—quickly. Early adopters stand to benefit immensely.

Beerud Sheth is founder and CEO of bot and messaging platform Gupshup.