Zipcast Episode 25: The Power, Scalability and Efficiency of an SMS API

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Have you ever received an appointment reminder or other notification via text? Chances are that was thanks to an SMS API. API is short for application programming interface and it’s how two software programs talk to each other. Businesses that are scaling their texting programs often turn to an SMS API for its robust capabilities and superior price point. In this episode, we learn more about texting API solutions from someone who understands them well: Tom Maddock, one of Zipwhip’s SMS API experts.

Featuring

tom maddock photo square
Tom Maddock
Account Executive, Commercial SMS
Scott-Heimes-1
Scott Heimes
Chief Marketing Officer

Scott Heimes: Welcome to the Zipcast, where we talk about the latest trends in texting for business, customer communication strategies and technology. I’m your host, Scott Heimes, chief marketing officer at Zipwhip, and thanks for tuning in.

Scott Heimes: Have you ever received an appointment reminder or other notification via text? Chances are that was thanks to SMS API. API is short for application programming interface and it’s how two software programs talk to each other. Businesses that are scaling their texting programs often turn to SMS API for its robust capabilities. Join us today as we learn more about texting API from a guy who knows it well, Tom Maddock, one of our SMS API experts at Zipwhip. Welcome to the Zipcast, Tom.

Tom Maddock: Hey Scott. Glad to be here. Thanks for having me.

Scott Heimes: All right, so, hey, tell us a little bit about your background. What do you do for Zipwhip?

Tom Maddock: Yeah, well, I am a Sales Account Executive for the SMS API team and our team helps direct brands and reseller partners connect with our API to add texting functionality to either their direct brand or their line of business.

Scott Heimes: Cool. So what’s an example of a direct brand.

Tom Maddock: Yeah. So if you’re an e-com company and you want to add that texting kind of piece or component to the transaction process or workflow for your customer, you would integrate directly with our API. And then on the other side, if you are a reseller partner, we work a lot with companies in the CPaaS space communications platform as a service, they offer a cloud-based telephony and other products. They can bolt on our API to add an SMS functionality to their product suite to help round out their offerings.

Scott Heimes: Yeah. A lot of CRMs in that reseller category too right?

Tom Maddock: Yeah, no doubts, it’s a big use case for the Zipwhip API.

Scott Heimes: So we know that Zipwhip offers software and texting API solutions for all kinds of businesses. We have over 35,000 businesses using our tools, including lots of some very small businesses, but also mid-market companies with hundreds of employees and even enterprises with thousands. So our solutions can be configured for dozens of different use cases. Today, we want to talk about specifically the SMS API and kind of uncover the value elements around the API and how it gets used. So let’s start with, tell us what’s an API, Tom?

Tom Maddock: Yeah. Great question. So it’s kind of an acronym that’s been around for a while, but it basically is a set of rules and protocols that let two business applications talk to one another and API’s are hard at work every day. A easy to understand example is you go on a travel website, you want to book a hotel, you’ll the information and then in literally nanoseconds API calls are made to kind of collect that information and then bring back results to you that you can click on and actually order that hotel or that stay. And then it just walks you through the entire transaction process.

Tom Maddock: But more specific to today, if you want to send a programmatic SMS message or a new product promotion or a new product feature to your customers, you would connect with our texting API workflow and have that ability to send and receive two way conversational text messages.

Scott Heimes: Probably virtually every automated text alert or reminder or schedule reminder comes from an automated API of some sort or another.

Tom Maddock: Yep. That’s a good point, yeah. And APIs are easy to integrate today. It’s not a lot of development time is required. So if you’re thinking about scaling your texting functionality within your company, the API is the way to go and certainly Zipwhip can help with that.

Scott Heimes: So besides scale, what are some of the other benefits of an SMS API?

Tom Maddock: Yeah. Great question. So, and we get that asked a lot and we do have software products for small businesses, but if you are thinking about texting at scale, kind of three things come to mind, obviously speed is really important, a kind of a typical kind of throughput rate is 25 texts per second. So you can imagine you can send, even hundreds of thousands of texts within a couple of minutes. So speed is really important. Automation/efficiency, I like to say because they’re very similar, if everybody on your business application or platform are using texts, you can literally send texts to all your customers and have all your employees engage kind of in that sending of texts. And then scalability, another thing we see all the time they may integrate for a CRM use case, but other company, other parts of the organization may say, “Hey, we want to send texts to people we talk to.” For example, HR job recruiting, another big use case you’re starting to see where potential candidates for jobs, you can communicate with them via texting. So we’re really highly scalable.

Scott Heimes: Yeah, and our Zipwhip SMS API can be used by any programming language and works with virtually any business application if configured correctly. It also provides direct access to text messaging flow for toll-free and business landlines, which allows customers to tailor a texting solution specifically to their brand experience via their telephony. And that’s a big advantage. How about some of the use cases? What are some of the more common SMS API use cases?

Tom Maddock: Yeah, and we see a lot of this in our kind of day to day, we see kind of bulk messages being sent out for notifications, product alerts. An example, if perhaps a large withdrawal was made out of your bank account, you may get a notification from your bank. Appointment reminders are a very, very big use case for SMS. You also see two factor authentications, I was just logging out of my 401k the other day, just checking the balances, and I was required to do a two step or two factor authentication process where they send you a code to your device, you input it back in to help verify your identity. Another really big popular use case. Billing reminders are now popular and also prescriptions, it’s always been kind of a big use case kind of in the medical and pharmacy world, but unfortunately, due to pandemic, a lot of these use cases are coming more to the forefront.

Scott Heimes: Yeah, it’s very interesting. So what other kind of interesting stuff are you seeing these days leveraging our API? Tell us, what are some customer stories that you’re seeing?

Tom Maddock: Yeah, so we get a lot of different use cases and a lot of interesting ones. And most recently, obviously in retail and we’ve learned or come to learn that not everyone wants to download a new app for their mobile phone, or if you buy a product at a retail store. But most recently there’s kind of a, they call it a BOPIS use case, BOPIS example, buy online pickup in store, and with the pandemic now all of that kind of communication process takes place via texting. So, “Hey, here’s your product it’s ready to come picked up. Here are the instructions to come to the store to pick it up.” And that’s all done via texting.

Tom Maddock: Another kind of neat one we see is called deflection. So you call your cable company, you’re on hold for support. You can now kind of transition or they will deflect that call to a texting application. So instead of sitting on hold for a while, you can just communicate via text. And that’s really how most people want to be communicated with today.

Tom Maddock: We’ve talked about healthcare a little bit before. It’s just, it’s always been a very, very strong use case, but if you’re going to the doctor today, I took a family member for a surgical pretesting visit, whole set of instructions, rules, and protocols, and that all came via text. So it’s really necessary to have two way conversational texting for that use case.

Tom Maddock: And another one we see is the gig economy, you’re ordering food, you’re ordering a ride share, for example, all of that kind of communication takes place via texting. And that’s not just for millennial’s, Scott, it cuts across all generations. So it’s kind of a neat thing to see.

Scott Heimes: Yeah, I mean, all of our research that we’ve done as a company points to text being the preferred communication channel for when consumers want to interact with businesses. So it doesn’t surprise me. And I think you’re going to see more and more business texting from companies as a result.

Scott Heimes: So let’s shift gears for a minute. You wrote a blog about texting, not too long ago, and how it needs to be part of an omnichannel strategy. Can you elaborate a little bit, tell us what omnichannel means to you and how texting fits into it?

Tom Maddock: Yeah, happy to do that. So one of the things we learned about omnichannel is that companies that adopt this approach to marketing, they have higher retention rates and higher response rates and higher customer engagement rates. So omnichannel is a good thing if you’re a marketer. But what it really means, high level is the customer experience is the same in all channels, whether it’s email, whether it’s in store shopping, whether it’s the web or social media. And customers are demanding that today, they want to feel like they’re getting that same kind of look and feel of buying a product. So that really just defines what omnichannel is. But inside of omnichannel we know, as you pointed out, that consumers prefer texting over any other channel. So texting has become a vital strategy for that omnichannel approach.

Scott Heimes: Yeah. That’s fascinating. It’s particularly relevant for big retailers, or large consumer packaged goods companies that want to present a consistent experience via any channel for their customers. So why now? Why is now the time to explore integrating with an SMS API?

Tom Maddock: Yeah. And it’s a question we get asked a lot. So we think the short answer is now we think we’ve reached that inflection point where businesses are starting to realize they need to include texting as part of their communication strategy. We know that, phone and email response rates or connectivity rates are dropping precipitously. A lot of people don’t answer the phone anymore. And in many cases, if you get a phone call that you don’t recognize, you may actually try to text that number. I know I’ve done it a bunch of times. And if that number is not text enabled, that’s a lost opportunity to engage with either a new customer or an existing customer. So that could be damaging to your brand and certainly drop customer engagement rates. So it’s really something to think about now. And if you’re thinking about scaling this, the Zipwhip API can certainly help.

Scott Heimes: Yeah. It brings to mind the fact that there’s a couple different flavors of SMS channels out in the market, which is a little bit technical, but has real relevance when you’re thinking about building a texting strategy. So there’s obviously 10 digit business phone lines, there’s toll-free business phone lines that you can text over, and then there’s this concept of short codes, which is a five digit number and offers different elements. Can you talk to us a little bit about the short code versus toll-free versus 10 digit opportunity and just kind of break that down for us?

Tom Maddock: Yeah, absolutely. I’ll try to keep it high level and summarize, but probably the number one reason why people come to Zipwhip and talk to our commercial API teams is they want to understand the differences and how does short code compare to toll-free 800. But very quickly short code is something we’ve all seen in use, it’s a five digit code as you pointed out, mainly used for a bulk messaging or notifications, so very hard to respond to that. It doesn’t offer that two way conversational texting, which the other channels do. But it’s been around a while, it’s very effective and it’s used, I guess for the most for mass texting use cases.

Tom Maddock: There’s also 10 digit LC, which is basically just texting in a local business number, maybe a local restaurant, a local dentist office, or a nail salon. They will text and they will have that number so customers can call or text. There are some throughput limitations to that, so it may not be suitable really for a large enterprise type of use case.

Tom Maddock: And then there’s toll-free 800. And this is something we’ve seen a huge increase and a huge shift in the last couple of years where people are adopting, texting via 800 toll-free numbers.

Scott Heimes: And what’s some of the benefits of that, why the growth?

Tom Maddock: Yeah. So the thing about 800 numbers, they’re just recognized more easily by consumers. And if they’re more recognized, they’re trusted. So the typical engagement rates and response rates will be higher. That’s really the number one benefit that you’d see from that. They’re also extremely easy to acquire and set up. We have a provisioner API that our API customers can actually text enable those numbers literally within minutes. So if you’re doing a lot of campaigns using different toll-free numbers, you can set them up really, really fast. And then also another feature that people like are delivery receipts to the handsets. So if we send out a million texts to our customers, we want to know the effectiveness of that campaign. The first thing we want to know is, hey, were they delivered? So these are some of the features why 800 is becoming more popular.

Scott Heimes: Yeah. That’s helpful breakdown. Appreciate that very much. Everything’s got its place and there’s the right use case makes a big difference. So people are often concerned about safety and reliability for APIs, for texting. Tell us a little bit about Zipwhip’s sort of position on that.

Tom Maddock: Yeah, a great question, we get asked a lot, particularly now with large enterprise brands trying to figure out and how to navigate around texting and how they can begin implementing that. So Zipwhip owns and we control our own network, which means we control the speed, the capacity and content of the actual messages that are going out. Messages are encrypted both ways for sending and receiving. And we are now SOC 2 compliant, which is really the standard for SaaS companies for Infosec. One great kind of testament to safety and reliability is here at Zipwhip we work a lot of insurance companies, financial service companies, and they have pretty high standards for Infosec compliance. So we usually check the box most of the time for those types of companies as they’re evaluating our technology.

Scott Heimes: Yeah. Interesting. How about somebody who’s thinking about integrating an API into their communication strategy and starting to apply automated business texting, what’s the pricing model here? How do we charge for use of the API?

Tom Maddock: Yeah. So the question we get asked quite a bit, as people starting to get into the scaling of business texting. So it’s really a usage based model, very, very cost effective. There’s a cost per message. It really starts out at less than a penny per message. And as your volume grows, we’re completely aligned with that. That will help drive the cost of messaging down a little bit.

Scott Heimes: Yeah. And people can try it for free, right? I mean, scale up sale works well. If you look out to the future and you can look in your crystal ball a little bit, what are some of the biggest opportunities you see in SMS API texting in the coming months or the coming year?

Tom Maddock: Yeah, great question. So undoubtedly, and unfortunately Scott it’s caused by the pandemic, but we see the e-commerce use case really, really starting to take off. Just picture yourself, you’re on a website, you’re looking at a product, they will ask you to opt in to receive text messages, which is really, really important. And then a day later you get a text, “Hey, the same product you’re looking at is now 25% off.” Really powerful use case. It helps, like I said, conversion rates, customer retention rates, it improves all of that. And then just knowing, hey, once I buy a product, I want to know when it’s coming, is the order status, a shipping date, when can I expect it, I’m excited, I want to see all that. So all of that done and it takes place via texting on our SMS API.

Scott Heimes: That’s such a powerful use case. I mean, another one that comes to mind for me is health care. And just the prevalence today of, using your cars, the waiting room, instead of being in the doctor’s office waiting room and having them text you when it’s time to come in for your appointment, it just… Take out and food deliveries, another ones that’s just scaling significantly during the pandemic. And even small businesses that are learning to use texting as a promotional tool to help their customers really access their promotions and be able to leverage them really quickly. It’s just an exciting time for the SMS business isn’t it?

Tom Maddock: Yeah. No doubt. Also education’s other one, Scott, with kind of the cloud of uncertainty of school openings in the coming months, it’s going to be important, teachers are going to want to communicate with parents of students. And if you need to get out a fast kind of district wide alert or notification about some new rule or protocol, you can do that via texting and the API certainly can help with that.

Scott Heimes: All right. So, hey, if a business is open to exploring API texting, what’s a good next step?

Tom Maddock: Yeah, we make it really easy to kind of learn more about our API. We have a developer portal on our website and the API documentation is there, very simple to download and read, and then you can just follow the links if you want to acquire or set up an API trial. Very simple.

Scott Heimes: Just go to zipwhip.com, it’s all right there, right?

Tom Maddock: Absolutely.

Scott Heimes: Well, hey, thanks so much for joining us today on the Zipcast, Tom. I really enjoyed our convo.

Tom Maddock: I appreciate being here and good talking to you again, Scott.

Scott Heimes: Thanks for joining us. Ever wonder how email compares to text when it comes to customer communication? We did too. So we commissioned a survey. You can check out the fascinating results at zipwhip.com/email-ebook. Make sure you subscribe to the Zipcast on Apple Podcasts or wherever you listen so you can get the latest episodes. Feel free to text us with topics you’d like to hear about or other feedback for the show. Just send a text to 347 772 3529. Until next time.

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