Optimize Your Communication Strategy: A Comprehensive Look at SMS Pricing and Its Impact on Your Business

Posted on August 16, 2023

The average US consumer spends four hours a day on their mobile phone, and many leading brands are investing in SMS marketing as an easy, cost-effective way to engage their customers. Text messaging can be an effective strategy to reach your target audience, but optimizing your marketing plan with a flexible, customizable SMS pricing model from a reliable communication platform will be crucial to success.

How Are Businesses Using Texting and Why Is it Vital to Find a Suitable SMS Pricing Model?

Text messaging, or SMS, allows a person using an SMS-capable device or an automated system or application to send and receive text-based messages with another user. Businesses use SMS for the following reasons:

  • Communication within the organization
  • Client communication
  • Feedback and surveys
  • Campaigns, events, and giveaways
  • Updates and appointment reminders
  • Authentication and password retrieval

While finding an SMS platform that meets your business’s or your client’s unique needs is important, it is also critical to consider pricing. A flexible SMS pricing model that scales with use is more cost-effective, helping your business or client make a faster, more substantial return on their investment by only paying for what they use, instead of being locked into an inflexible data package.

What Makes Business Texting Different From Consumer SMS?

Most text messages are sent from one person using a mobile device to another using person-to-person (P2P) SMS. P2P messaging is relatively unregulated but does not facilitate larger volumes of texts from apps and automated systems.

Businesses can choose to use P2P messaging to reach  consumers from a mobile device operated by a user, such as a sales associate messaging a client that their product is ready for pickup. However, if a business wants to message a consumer from an app or use an automated system, it will require application-to-person (A2P) SMS for bulk messaging.

A2P traffic is more heavily regulated, and business entities must register to use it. Choosing an SMS platform that offers A2P SMS for your business or client’s needs is critical, as sending high volumes of messages using P2P traffic can result in carriers blocking the number.

Related: Bulk SMS API for developers: How it works

The Benefits of SMS for Business Communication

SMS messaging enables organizations to easily and inexpensively send internal messages and external messages to customers. Your business or client can benefit from more interactions, engaging conversations, and business-enhancing features at a cost-effective price.

Increased Consumer Interactions

Text messaging is more personal than email marketing, leading to more consumer interactions. According to Gartner, 98% of text messages are opened by the recipient, and nearly half of consumers will respond. Email marketing campaigns receive a fraction of the attention, getting only 20% open rates and fewer responses. SMS campaigns, aftersale follow-ups, and feedback surveys can boost engagement with your business or client’s target audience.

Have a Two-Way Conversation

Conversations with customers can generate greater loyalty and higher revenue. When your client or business asks customers for feedback, they can gain insight into target markets and their needs. Texts increase open rates and responses because they offer a more personalized experience for consumers, allowing the business to get more from their campaigns.

Business and Customer Service Enhancing Features

SMS can be automated to send users two-factor authentication (2FA), appointment reminders, and feedback surveys to improve productivity and customer service. Business users can also choose to mask their phone number or a consumer phone number while texting to protect users’ identity in applications like ride-sharing.

With a programmable SMS application program interface (API), you can create the system or app your business or client needs, including integrating texting into an app, customer relationship manager (CRM), or website.

Cost-Effective Communication

Text messaging campaigns can be cost-effective, especially when using a flexible pricing model. There is minimal initial investment in the API and service, which can accommodate scalability without a significant cost. With a cloud-based service, your client or business will not require investment in on-site infrastructure or systems if they have a preexisting internet connection.

What Pricing Models Do Communication Platforms Offer?

While your client or business may want to invest in an SMS platform for its many benefits, it is important to consider the pricing model. The two pricing models offered by most communication platforms offer different advantages for different business types.

Flat-Rate Pricing Model

A flat-rate SMS service requires the business to pay a fixed price for a limited number of messages within a billing cycle. Flat-rate models can be affordable if the company sends and receives a specific number of texts per month and does not expect any fluctuations in volume. 

However, if the company has a period of increased SMS traffic, it could result in a lapse of service or additional fees to send and receive the number of texts the business needs. Similarly, a period of fewer texts means businesses will have to pay for unused SMS service.

Metered Pricing Model

A metered SMS pricing model allows the business to pay only for the number of text messages it sends and receives in a billing cycle, giving businesses more flexibility. For instance, if a company needs to scale its texts for an event, product launch, or campaign, the business will only pay for the increased traffic during that period. If a company has fewer texts than usual for a period, it will not pay for unused text messages.

Metered SMS pricing models are helpful when using a cloud-based service since the company will not need to invest in new systems or infrastructure to facilitate the increase or decrease in text messages. The provider automatically adapts to traffic fluctuations in the cloud. It also allows you to experiment with the SMS service and API without a significant investment.

How Does the Right Pricing Model Work for Different Businesses?

Choosing between a metered and flat-rate pricing model depends on your business or client’s needs. While both models can work, metered pricing is typically recommended for its flexibility. Entrepreneurs, startups, small businesses, and medium-sized businesses often benefit from the scalability and low initial costs associated with metered pricing models. Flat-rate pricing models work well with companies that consistently message a select number of users, such as larger companies with a well-established user base.

Related: What is two-factor authentication (2FA), and how can you use it for your business?

For example, a fast-growing startup with a customer base of 2,000 users may want to text its users twice a week. If the business purchases a flat-rate plan for 16,000 text messages monthly, it will need to increase its plan if its user base grows to 5,000 over a few months. A shortage could result in undelivered text messages or additional fees to facilitate the overage. 

A metered plan would accommodate the growth in customers, resulting in charges for the exact number of messages sent and received.

What to Consider When Choosing a Suitably Priced SMS Service for Your Communication Strategy

When searching for the ideal platform for your company or client, it’s essential to consider if your partner provider offers the right solution for your business communication strategy.


When choosing a well-priced SMS platform, determine if the provider offers the reliability your business or client needs. Most apps and systems with text messaging will require 24/7 uptime. For instance, if a banking customer tries to log in to their bank account outside of normal business hours, they would expect to quickly receive a 2FA text message regardless of the time.

A reliable provider will also avoid aggregators and grey routes to create a seamless messaging experience. As mentioned above, messages sent in bulk require an A2P route. Aggregators and grey routes can send your business or client’s traffic on P2P routes to avoid fees, resulting in poor deliverability and carrier issues.


Choosing a cloud-based messaging service is vital if your client or business requires scalable SMS for future growth and usage changes. As explained before, a metered pricing model offers the most flexibility, charging only for the number of messages used during a billing cycle. Ensure your SMS provider offers the number of messages your business or client requires at a cost-effective price.


Features can be critical to your decision depending on how your client or business will use SMS. Ensure your SMS provider offers the required features to build the app or integration using their SMS API. For instance, if you are building a delivery app, you may want to have SMS masking to hide the users’ phone numbers and offer privacy. However, if you are building an automated reminder system for a service department at a car dealership, you want an API that offers appointment reminders.

Optimize Your Messaging Strategy With Flexible SMS Pricing

Messaging with an SMS API from Flowroute allows you to integrate texting into your client or company’s communication strategy. Our flexible SMS pricing model offers a scalable solution for your business messaging. You get reliable delivery with no grey routes or aggregators and business-enhancing features like SMS masking, appointment reminders, and 2FA. Get started with a flexibly priced SMS API from Flowroute.

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