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  • Writer's pictureAugnet Team

What are the Risks of Unreliable SMS for your Business?

Consumers are more dependent on SMS than ever before. They’ve also never been more digitally impatient. With the rise of app-usage and online transactions, customers regularly need OTPs (One-Time Passwords), emergency alerts and appointment reminders. And they need them fast.

That’s why unreliable SMS communication poses significant risks to your reputation and bottom line. Sadly, 1 in 20 SMS messages are never delivered, leading to damaged trust and lost customers.

Who’s to blame? In truth, the SMS industry is letting you down – it can’t provide quality assurance or verify SMS delivery. You also have SMS aggregators on the supply chain sending you FDLRs (fake delivery receipts), which means you may be falling foul without even realising.

Other issues include SMS latency (delayed messages) and, with the use of SIM Farms, non-GDPR compliance – all of which can damage your brand image and bottom line.

Below, we’ll highlight the risks of unreliable SMS in more detail, explaining why they happen, and how you can avoid them.

1. Lost revenue

SMS has better open rates than email. However, 1 in 20 SMS is not delivered. For a business sending an SMS to 10,000 customers per day, approximately 500 of those won’t receive the message.

This is because A2P messages are sent along a supply chain, often making several hops between providers and aggregators before reaching the recipient. If one provider has an issue, the entire chain is compromised, causing delayed or undelivered SMS.

To make matters worse, bad actors in the supply chain kill a proportion of SMS and return a fake delivery receipt, tricking you into believing your SMS communication is reliable – when it’s not.

How does this affect revenue? Well, companies still pay for every SMS submitted, even if it’s not delivered.

Here’s a real life example. With 90 million users, $11 billion annual revenue and 50% subscription renewal, a popular video game platform is losing around $275 million in annual revenue through undelivered SMS payment reminders.

Meanwhile, a ride hailing app is likely to be losing $11 million in revenue due to undelivered ‘surge pricing’ announcements to its drivers. For both businesses, that 5% failed delivery rate is a significant annual loss.

With Augnet, it’s an avoidable loss. We’ll expand on that towards the end of the article, though.

2. Poor customer experience

Customer experience (CX) is crucial for your competitive edge. As of 2022, 88% of customers say CX is just as important as the company’s products or services, which demonstrates the importance of clear, concise and timely SMS.

Today’s consumer is more digitally impatient than ever. That’s why delayed SMS, or SMS latency, is one of the biggest risks to customer engagement, with 64% of people hitting re-send after waiting 10 seconds for their One Time Passwords.

At the moment, 11% of SMS arrive with a delay of ten or more seconds, leading to frustrated customers who are unlikely to engage with your app if delays become a regular thing. In short, keeping customers waiting is a big no-no.

What causes latency? It comes back to issues in the supply chain. However, some of your SMS traffic may become entwined with SIM Farm traffic, which can also cause latency or undelivered SMS. We’ll discuss these farms in more detail further down the page.

3. Customer churn

Unreliable SMS is bad for customer experience and engagement. Poor CX encourages digitally impatient customers to churn (lost customers). In fact, a survey by Khoros showed that 64% of customers said they have changed to a different brand because of a poor experience.

The worst part is that many businesses are unaware this is happening, due to fake delivery receipts. This is when an SMS operator or aggregator ditches an SMS message but tells you, the sender, it was delivered anyway.

With Augnet’s SMS Aware algorithm that analyses the supply chain in real time and uses the most reliable providers, this is never the case. We can always verify delivery.

4. Non-GDPR compliance

A percentage of SMS traffic is often blended with unreliable, unlicensed SIM Farm routes. SIM Farms are servers plugged with SIM cards that can automatically send SMS to thousands of phones, offering a cheaper – but hugely unreliable way – of sending SMS in bulk.

For instance, SIM Farms only have one connection to the mobile network, so if there’s any kind of error, the server will fail to deliver lots of SMS on time – or at all. These farms are unlicensed and non-GDPR compliant, with operators often sharing SMS data with fraudsters.

According to David Morrow, telecom fraud is worth about $38 million per year. So, whether knowingly or not, Breaching data protection laws poses risks to your reputation, customers and bottom line. The bottom line here is: SIM farms are no match for Augnet’s speed, reliability and quality control.

What’s the solution?

With the SMS industry’s lack of quality control, your business is at risk from unreliable SMS communications, from lost revenue to data breaches. But there is a solution.

Augnet is the only company filling the SMS governance gap. We ensure your SMS are delivered on time and within the GDPR rule book, verifying every single delivery. With our real-time SMS Aware algorithm that identifies the most reliable providers in real time, we can increase your revenue and customer engagement, while verifying data-privacy compliance.

Unlike our competitors, we can also optimise latency, while mitigating SMS outage and fake delivery receipts. Why suffer SMS risks when you enjoy SMS success?


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