SMS vs. WhatsApp for Customer Engagement: Which Channel Works Best for Your Business? 

The core differences: SMS vs WhatsApp

SMS (Short Message Service) is the original mobile messaging platform, used for decades to send short, plain-text messages. It’s reliable, simple, and doesn’t require internet access, making it accessible across virtually any device with a mobile number.

WhatsApp, on the other hand, is a relatively newer player. With over 2 billion users globally, this app has quickly become a top platform for instant messaging. Offering more than just text, WhatsApp allows for multimedia, group chats, and voice and video messaging – all of which happen over the internet.

Which platform has the better reach?

SMS: The global leader
SMS has the broadest reach when it comes to device compatibility. With over 3.5 billion people owning mobile phones capable of receiving SMS, there’s little doubt that it’s the easiest way to reach someone regardless of their location or internet connection. It also doesn’t require the user to install any additional apps, ensuring that your message can be received on virtually any phone.

WhatsApp: The engagement powerhouse
WhatsApp boasts a 98% open rate and an average response time of under 90 seconds. That’s an impressive statistic for marketers, especially when you consider that people spend a significant amount of time using the app daily. However, it’s limited by internet access and requires users to have the app installed, which can be a barrier depending on your customer demographics.

Features and functionalities: Which suits your needs?

SMS is straightforward. It delivers short, concise messages with a character limit, making it ideal for sending reminders, OTPs (one-time passwords), and urgent alerts. Its simplicity ensures that recipients focus solely on the message without distractions. But SMS lacks advanced features like multimedia support and encryption.

WhatsApp, on the other hand, offers a lot more flexibility. You can send images, videos, and voice messages. You can create groups, provide customer support through chatbots, and even initiate video calls. This makes WhatsApp a richer platform for customer engagement where interactive or visual content is needed. Plus, its end-to-end encryption offers a level of security that SMS can’t match.

Industry-specific use cases

Ecommerce

If you’re in the ecommerce space, WhatsApp can give you an edge with its interactive messaging capabilities. Brands like Sephora have utilized WhatsApp for customer support, providing real-time responses and personalized recommendations. Imagine sending your customers product demos or promotional videos, making the shopping experience more immersive.

On the flip side, SMS can still be invaluable for transactional messages. An ecommerce platform like Amazon might send you an order confirmation or delivery update via SMS, ensuring the message reaches you even if your internet connection fails.

Healthcare

For industries like healthcare, where security and immediacy are key, SMS is often preferred for sending critical appointment reminders or lab results, especially in areas with unreliable internet connectivity. Many healthcare providers leverage SMS for quick and effective communication that requires no technical skills from the patient.

But for more personalized patient care and follow-ups, WhatsApp can offer a richer interaction experience. Some healthcare providers use WhatsApp to send medication reminders or answer patient queries, providing a more interactive and engaging communication flow.

Education

Educational institutions often rely on SMS to send parents and students important notices, such as weather alerts or exam updates. The simplicity and broad accessibility of SMS ensure that no one misses out, even in areas with limited digital infrastructure.

Yet, with more students and teachers embracing digital communication, WhatsApp is increasingly used for group discussions, updates on assignments, and even remote learning interactions. It’s become a favored platform for staying connected more dynamically.

The cost factor: What’s more budget-friendly?

SMS costs are based on the number of messages sent, with fees varying by region and service provider. International SMS, in particular, can get pricey, which can add up if you’re running large-scale campaigns.

WhatsApp has the advantage here. Since it works over the internet, costs are typically lower, especially for international messages. However, businesses will still need to pay for WhatsApp Business API access, which is used to send bulk or automated messages.

Security and privacy concerns

SMS is notorious for being vulnerable to phishing attacks and lacks any form of encryption, making it less secure for sending sensitive information. It’s also prone to being intercepted, which is a concern for industries handling confidential data.

WhatsApp’s end-to-end encryption gives it a clear security advantage. Messages sent via WhatsApp are only accessible to the sender and recipient, adding an extra layer of protection that’s vital for maintaining trust, especially in sectors like healthcare and finance.

Case studies: Success stories from the field

How NA-KD leveraged Insider’s SMS capabilities for 72X ROI and a 25% increase in CLTV

NA-KD, a leading European fashion brand, partnered with Insider to overcome the limitations of its fragmented tech stack and siloed customer data. By unifying its data through Insider’s Customer Data Platform (CDP), NA-KD gained a 360-degree view of its customers. Leveraging this data, NA-KD launched its first hyper-targeted SMS campaign, which contributed to a 25% increase in customer lifetime value (CLTV) and achieved an impressive 72X return on investment (ROI) within 12 months.

How MadeiraMadeira achieved 52X ROI through cross-channel customer journeys

MadeiraMadeira, Brazil’s largest home goods platform, partnered with Insider to enhance its customer communication by leveraging cross-channel marketing across WhatsApp, SMS, and Email. Insider’s AI-native journey orchestration tool, Architect, enabled the brand to deliver personalized, seamless experiences across all channels.

By integrating WhatsApp marketing, MadeiraMadeira saw a 3.5X higher conversion rate and, through Architect, extended this success to SMS and Email campaigns, achieving a remarkable 52X ROI. With fast integration and personalized customer journeys, Insider helped MadeiraMadeira deliver consistent and relevant messages at scale.

What’s the right choice for your business?

At the end of the day, the choice between SMS and WhatsApp depends on your business goals and customer demographics. If you need wide accessibility, fast, reliable delivery, and minimal interaction, SMS is the way to go. For more interactive, rich-media messaging with higher engagement potential, WhatsApp is your best bet.

Ready to optimize your messaging strategy?

Now that you have a clearer picture of the strengths and weaknesses of each platform, it’s time to make an informed decision. Not sure where to start? Book a demo with us today, and let’s help you design the perfect messaging strategy tailored to your unique business needs.