Insights

Texting, Trust and Transformation: The Future of Business Communications

Nov 07, 2023

It's been 30 years since the first SMS text message was sent, and, in that time, we’ve seen texting’s seismic transformation from a niche technology to an omnipresent source of connectivity to family and friends. And the growth continues as more and more businesses make it the channel of choice for communicating with customers. 

At the 2023 Somos Summit, a panel of business messaging experts gathered to discuss the current state of business messaging – including challenges and new opportunities for this ubiquitous tool – as well as its path to a promising future. The panel, which was moderated by Dave Stewart, SVP & Chief Business Development Officer at Somos, featured the following SMS thought leaders:

• Eli Katz, Founder & CEO of XConnect 
• Gavin Macomber, CEO of Cloudli Communications
• TJ Thinakaran, CEO of CasselRoad Consulting

Dave opened the session by demonstrating, through statistics, the meteoric influence of business messaging, as well as the significant shift in consumer behavior towards receiving SMS messages from their favorite brands. Take, for example, the following:

• According to B2B research firm Markets and Markets, global business messaging spending is projected to exceed a staggering $78 billion by 2028.
• In the U.S., this figure is expected to reach a remarkable $35 billion, as predicted by Mobilesquared. 
• SMS boasts open rates nearing 100% and click-through rates double those of email. 
• Engagement with recipients through SMS can be up to ten times higher than other communication methods.

However, with all these benefits, as is usually the case in life, there's a catch. As we embrace the convenience of SMS, we are also bombarded by robotexts and spam messages. According to Robokiller, the first half of 2023 saw a mind-boggling 78 billion robotexts sent, a 20% increase over the previous year – that’s more than one text message per day per person in the U.S., totaling over a quarter of a million messages per minute.

Worse yet, these unwelcome intrusions come at a significant cost, estimated at over $13 billion in fraud losses for businesses and consumers in the first half of this year alone. Globally, the trust index in messaging is declining, and here in the U.S., only 55% of consumers trust the SMS channel. It's clear that the industry needs to strike a balance between enabling legitimate businesses to use this effective channel and keeping bad actors at bay.

With the stage set, the panelists went into more depth on what’s happening now in the business messaging landscape, what being able to text with brands means to consumers,  how the global marketplace is addressing business messaging and what to expect as we look into the future.

Gavin Macomber started the conversation by stressing the importance of helping businesses adopt messaging as a channel for customer interactions. Specifically, he noted that “93% of customers want to talk and text with businesses... but the challenges are becoming extremely frustrating.” And despite consumers’ desire to engage on this communications channel, more businesses than not are failing to adopt this preferred method of engagement.

The conversation next transitioned to a more holistic view of business messaging on a worldwide level. Eli Katz offered an international perspective on the U.S. business messaging market and shared insight into the global markets. He likewise highlighted the tremendous opportunities awaiting the business messaging marketplace. However, he warned that to reap the greatest benefit from business messaging, we must take a collaborative approach and, more specifically, “By working together, we can implement proper solutions.”

Following the international perspective, TJ Thinakaran shared his thoughts on the current state of the market – which he characterized as both dynamic and growing.  He also described some of the challenges that preclude businesses from adopting texting. Specifically, he cited a longer onboarding process, increased operating costs and necessary “Know Your Customer” (KYC) requirements. 

These challenges are surmountable, however. TJ looked at WhatsApp’s success, which he points out “is getting the secret sauce of SMS right.” He also touched on the potential of Rich Communications Services (RCS) as a formidable competitor to WhatsApp. Likewise, he warned, “If we don’t get this right, WhatsApp is coming for our lunch.”

In a world where SMS is becoming the preferred way to connect with businesses, it's clear that the future of business messaging holds both challenges and opportunities. Trust is vital, and the industry needs to work collaboratively to ensure the continued success of SMS as a channel for businesses.

As Eli Katz aptly pointed out, “We need to work collaboratively as an industry, then go to work with the regulators…If you’re not at the table, you’re lunch – and we don’t wanna be lunch.”

Otherwise stated, we as an industry need to adapt, collaborate and innovate to keep SMS a valuable and trusted communication tool for businesses and customers alike. Furthermore, we must also navigate the complexities of fraud, regulation and trust if we are to unlock business messaging’s full potential.

To learn more about the 2023 Somos Summit and to gain access to on-demand recordings, visit www.somos.com/summit.