Evolution From SMS To IP Messaging

Consumers find these messages to be essential to stay updated with their personal activities

Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The global enterprise messaging industry accounts for 2 trillion messages annually. 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. Most messages are delivered today using good old-fashioned SMS messaging. According to analyst estimates, this accounts for $30-50 billion in enterprise spending globally. That means messaging is the essential lifeblood for enterprises and enables them to acquire, engage, transact, and support their customers. Consumers find these messages to be essential to stay updated with their personal activities.


However, this sizable enterprise messaging industry is about to change in significant ways. Newer messaging channels are emerging with far greater capabilities, namely WhatsApp, Rich Communication Service (RCS), Google Business Messages (GBM), among others. The common theme across all these channels is that they are all based on data messaging using the Internet Protocol (IP messaging).

SMS messaging does have many advantages; it is unmatched in terms of universal reach and simplicity. But it also has limitations; it does not support rich, interactive messages and conversations. Also, regulations limit what messages can be sent from businesses because consumers lack the ability to control the message flow themselves.

IP messaging overcomes these limitations. IP messages include rich media, such as images, audio, video and files. For example, a bank can send a scanned copy of a check along with the transactional alert. IP messages have structured layouts that reduce clutter and enhance visual appeal. IP messages include interactive, clickable buttons that enable users to respond with a single click. For example, a bill-pay alert with a “Pay Now” button, banking alert with a “Report Fraud” button, a flight confirmation with an “Upgrade” button and so on.

While most SMS messages are one-way notifications, IP messages enable two-way conversations. Conversations enable users to select from available options, take actions in response to the message content, engage in a multi-step flow to troubleshoot a problem, get details about a promotional offer before making a purchase etc. Businesses can use either human customer-support agents or AI-enabled chatbots to engage in customer conversations. This enables users to ask questions and get replies in natural human language.

IP messages enable a high degree of engagement and personalization. Businesses can develop a detailed, personalized user profile and customize their interactions accordingly. Users get fine-tuned control, enabling them to determine who, when, why, and how frequently a business can send messages to them. IP messaging lets consumers consume content at their own pace.

IP messaging transforms virtually every touch point across the entire customer lifecycle including marketing, operations and support. In the marketing area, offers can be individually targeted and leads can be automatically qualified. In the operations area, businesses can support shopping activities and activate new features. In the support area, customer support can be automated. Conversations increase revenue and reduce cost for businesses while building long-lasting relationships with customers.

Thousands of early-adopter businesses have started using IP messaging already. We expect millions of other businesses to follow soon. Consumers are getting used to receiving instant message responses from businesses rather than calling the call center. COVID-19 has further accelerated the shift from physical to digital – even the corner store or restaurant is accepting orders digitally. IP Messaging has begun transforming business-to-consumer interactions and will continue to do so in ways yet unimaginable.