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Transactional SMS: Definition, uses, and tips

Alia Paavola
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Chances are you’ve received a text from another business confirming a hotel stay or providing a shipment update. These text messages are called transactional SMS.

Transactional texts have become popular across industries because they keep customers informed with vital updates about their purchases and interactions. But how can your business send these informative texts?

In this guide, we’ll discuss transactional SMS. You’ll learn its definition, its top benefits, how it differs from SMS marketing, and get examples from real businesses worldwide. Let’s dive in.

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A visual of transactional SMS

<h2 id="What">What is transactional SMS?</h2>

A transactional SMS is an automated informational text that provides customers with helpful updates and details. Transactional text messages provide bite-size information to support customers and improve the customer experience. Some common examples include shipping notifications, order confirmations, appointment reminders, and two-factor authentication.

What is the difference between transactional and promotional SMS?

Transactional text messages are strictly informational. Companies send them to provide customers with helpful information about recent transactions or interactions.

On the other hand, promotional text messages are a form of digital SMS marketing. Promotional SMS advertises services, deals, products, or events to contacts. Some common examples of promotional text messages include product launches, flash sales, and exclusive discounts.

Transactional vs promotional text message example

<h2 id="Types">8 types of transactional SMS</h2>

There are many types of transactional SMS messages. Let’s take a look at some of the main types used by brands across the globe. 

  • Service notifications. A common transactional SMS type is service notifications. This bucket includes texts that inform customers about various topics, from service outages to important user account updates. For example, flight boarding alerts, fraud detection texts, or support ticket-received messages would fall into this category.

  • Confirmation texts. Businesses can send confirmation of a purchase or appointment right after customers finalize or book a transaction.

  • Order and delivery updates. These messages let customers know when their order was processed, shipped, out-for-delivery, and delivered to keep them informed.
  • Receipts. Many brands send purchase receipts via transactional text. Customers receive these automated text receipts after they complete a purchase, helping them keep a record of their purchases.

  • Account verification. If customers have trouble logging into their accounts or need to verify their identity, companies can send one-time codes, password resets, and two-factor authentication texts.

  • Reminders. Informational reminder texts can include payment reminders, renewal notices, meeting details, or appointment reminders.

  • Welcome messages. Brands often send automated texts to new customers who opt into SMS notifications. Be mindful that welcome texts only fall into this category if they don’t include a CTA or promotion.

  • Unsubscribe messages. Customers no longer interested in a company’s SMS messages can unsubscribe by replying STOP or another specified word. An automated message confirms receipt of a customer’s unsubscribe request and notifies them they will no longer get texts.

<h2 id="Uses">18 best use cases and examples of transactional SMS</h2>

Let’s dive into some real-world examples of transactional SMS messages. You’ll see ways brands across different industries use transactional SMS to keep customers informed and boost customer satisfaction.

Order confirmation

Many businesses use transactional text messages to let customers know their order was successful. This confirmation text is a gentle way to let customers see the purchase details, where to go for additional updates, or when they can expect delivery. 

In the following example from Nick the Greek, the restaurant lets a customer know that their food order was successful and when they can expect it to be ready for pick up.

A transactional order confirmation text from Nick the Greek restaurant.

Booking confirmation

Like an order confirmation, booking confirmation texts inform customers their reservation is confirmed. This is a popular format hotels and restaurants use to manage reservations. Use a transactional text to let guests know they have a place to stay or dine.

In the following Airbnb example, the vacation rental company lets its guests know their reservation is confirmed and provides a link to review the reservation. This gives guests peace of mind, knowing they have a confirmed stay for their upcoming trip. 

A transactional booking confirmation text from Airbnb.

In another transaction booking example, Sofi Restaurant lets its diners know they have a table reserved.

A transactional booking text example from Sofi Restaurant.

Appointment confirmation

Another transactional text use case is appointment confirmation texts. Service companies like salons, vets, medical facilities, dental offices, and more frequently use this message type. This triggers after a customer or patient schedules an appointment, serving as a reminder and a confirmation.

In the following example, a pet grooming business lets a client know their appointment is set. 

A transactional appointment confirmation text example from a dog groomer.

Digital receipt

Some businesses use transactional text messages to send digital receipts to their clients automatically. This helps customers keep track of their purchases, view price breakdowns, and access their receipts if they want to return an item. 

In the following example, Flirt Salon provides its clients with a digital receipt for a haircut. This receipt breaks down the cost. 

A transactional mobile receipt text example from a beauty salon.

One-time passwords

Businesses want to protect and secure customers' accounts. One way to do this is to send two-factor authentication texts. These messages verify a contact’s identity by having them input a one-time code sent via text message. These 2FA texts are transactional because they provide information about an account. 

In the following Verizon example, the mobile carrier requires customers to input a code to log into an account.

2FA authentication text example from Verizon.

Similarly, a makeup artist requires clients to input a one-time access code to view a personalized quote. This is an automated transactional text and a form of 2FA.

A transactional one-time password text example from a makeup artist.

Account activation

Often, businesses require you to verify the information you add to your account to activate it. One way to verify your phone number is to send an automated text with a verification link. 

In the following example, United Airlines requires a passenger to confirm their mobile number by following a link. Once verified, that customer will be a MileagePlus member. 

An account verification transactional text example from United Airlines.

Order-ready notification

One of the most popular transactional SMS use cases is for order updates. This message type informs customers when their order is ready. Brick-and-mortar retailers or restaurants often use this to let customers know an order is ready for pickup.

In the following example from Walmart, a brief text lets customers know their print order is ready and when they can pick it up.

An order update transactional text example from Walmart.

Shipping update

Another typical transactional messaging use case is shipping updates. These updates inform customers when their order has shipped, when to expect it, and where to track it. Many businesses automate these texts to send once the tracking number is assigned.

In the example below, Script Drop Pharmacy informs patients that their medication has shipped and provides a tracking link with additional details.

A transactional shipping notification text from Script Drop Pharmacy

Delivery notice

Use a transactional text message to send delivery notifications to customers. These automated texts tell customers exactly when their item is at their doorstep. This keeps customers in the loop on delivery to improve customer satisfaction.

In the following example from Wayfair, the furniture retailer notifies a customer when their couch was delivered and includes a link that provides more information.  

An order delivery transactional text example from Wayfair.

Service reminder

Share essential reminders about a service or product with customers to inform them about crucial transaction details. This is a popular message type for home service businesses and rental car locations.

In the following Enterprise example, the car rental provider informs the customer when the car needs to be returned and how to modify the reservation if necessary. 

A transactional service reminder text from Enterprise. 

Appointment reminder

Automated appointment reminder texts can save your business time and revenue. These transactional reminder texts help reduce no-shows.

A BMW location reminds customers about a service appointment in the following example. 

An appointment reminder transactional SMS example from BMW.

Payment reminder

Customers may set up recurring payment reminders to ensure they pay their bills on time. You can text about a credit card payment, rent payment, and more. Customers appreciate the gentle reminder to avoid late fees.

In the following example, Discover sends a transactional text reminding customers to pay the minimum balance by a particular due date. 

A transactional payment reminder text from Discover.

Support ticket received

Tell customers their support inquiry is in the queue. This automated message lets customers know their inquiry is next up in line and when to expect a response. 

In the following SMS example, a transactional text is sent to tell a customer when to expect a reply.

An inquiry-in-the-queue transactional text from Goldbelly.

Table-ready alert

For restaurants that do not accept reservations or are known for longer waits, notifying guests when their table is ready makes everything more seamless.  

Callie, a restaurant in San Diego, uses a transactional text message to let a customer know their table is ready and to head to the host stand to check-in. 

Automatic subscription renewal 

If you offer an automatic monthly subscription service, notify customers when you will charge their account. This can improve customer satisfaction as they have a heads-up about the payment.

In the following example, Modern Healthcare provides a quick renewal reminder to a subscriber. It also includes the amount that they will charge their credit card. 

A transactional subscription renewal reminder example from Modern Healthcare.

Service alert

Use a transactional text message to let customers know about timely service alerts. This can include when a plumber is dispatched or a flight is boarding. 

American Airlines texts customers when their flight is boarding when it’s time to check-in, and if there are any delays. The following example shows their boarding text.

A service alert transactional text example from American Airlines.

Welcome message

Use a text message to welcome customers to your SMS program. You can thank customers for joining to receive updates from your company. Remember, transactional texts are strictly informational, so you wouldn’t want to include a promotion or welcome discount in this type of message. 

Take the following example from Optum. The online pharmacy simply thanks a patient for choosing to receive order-related notifications.

A transactional welcome text example from Optum.

Unsubscribed message

In addition to opt-in messages, an automatic unsubscribed message is considered transactional. These messages should trigger when customers reply to your texts with words like STOP or UNSUBSCRIBE. 

In the following example, Anthropologie automatically sends a message informing customers they will no longer get messages from the company.

A transactional unsubscribe text from Anthropologie. 

<h2 id="Benefits">7 benefits of transactional SMS</h2>

Transactional text messages provide many benefits. Let’s take a look at some of the key benefits for businesses.

  • High open and engagement rates. The average open rate for a text message is 98 percent, nearly five times that of email. This ensures customers read your important messages. Texts are sent directly to a customer's mobile phone, making them engaging and hard to miss.

  • Fast and reliable. People read text messages quickly. In fact, most people read texts within three minutes of receipt, ensuring time-sensitive messages get delivered promptly. Tap into SMS as a real-time communication channel.
  • Build trust. Transactional messages build customer trust by informing them about crucial information regarding their orders and purchases. Additionally, this message type ensures your brand communicates with customers beyond just trying to sell them something.

  • Keep customers informed. The most significant benefit of transactional texts is they keep customers in the loop about important information and updates. In fact, 64 percent of customers said appointment reminders are the most valuable texts they can receive.

  • Access to details 24/7. Since transactional texts are often automated and sent in response to a customer's action, they can be received at any time of day. One example is that customers who purchase past business hours will still get an automated messaging confirmation.

  • Customers prefer it. Customers want and prefer to get transactional messages via SMS. In fact, a study found 70 percent of customers prefer getting delivery updates via text.

  • More lenient regulations. While all types of business texting are regulated and require an opt-in first, regulators are more lenient on transactional than promotional SMS. Transactional texts like order confirmations don’t need to comply with marketing quiet hours because they can happen anytime. Transactional texts only require prior express consent, while promotional texts require express written permission.

  • Easy to implement and scale. Transactional texting is easy to implement and scale with the right SMS provider. An SMS platform can help businesses automate texts that trigger after an action is taken. 

<h2 id="Best">Transactional SMS implementation best practices</h2>

Here are some best practices to remember when implementing transactional SMS.

  • Pick the right SMS provider. You need to pick an SMS software provider to send transactional text messages. This allows your business to send text messages at scale and connect to an API for greater automation capabilities. To find the best SMS platform for your business, consider what features, integrations, and pricing structure you need.

  • Integrate your tools. You should integrate your SMS platform with your key business tools. This will help you customize your workflow and build automation triggers.

  • Get SMS opt-ins. Even transactional text messages require an opt-in. You need to collect permission from your customers to text them. Many businesses ask for permission to text at checkout. Be sure you’re clear about what they will opt into.

  • Send texts promptly. Timely updates build customer trust. Ensure your text messages are sent right after a trigger event occurs. For example, you will want the text to send as soon as possible post-purchase.

  • Personalize your messages. Use variables like name and order number to personalize each text message. This will help customers feel valued.

  • Keep messages short. SMS messages are 160 characters. Use this character limit wisely by sharing only the most relevant details. Consider an SMS link if you need to provide more extensive information.

  • Stick to information sharing. Advertising or adding a promotional CTA to your transactional texts may seem tempting, but it is not recommended. Transactional messages inform and should not promote your brand in any way. Adding a CTA like “Check out now” or “Book now” would make it a promotional message. Don’t get in trouble with regulators; stick to transactional content and CTAs.

Reliably send transactional messages with Textline

Are you ready to keep customers informed with transactional messages? Textline is the most secure SMS platform for businesses and boasts robust automation capabilities.

Sign up for a free 14-day trial of Textline today, and you can experience the benefits of non-marketing texts firsthand. 

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