Mobile Marketing: What You Need to Know about Short Codes

Friday, May 05, 2017 Listrak 0 Comments

Benefits of Unique Short Code, Dangers of a Shared Short Code and Pricing Pitfalls to Avoid

If you’re considering the SMS mobile marketing channel as your next opportunity to engage your customers, one of the biggest decisions to make is whether you would like a shared or dedicated short code for your company. This decision will affect brand recognition, customer service, internal process and procedures, and the bottom line.

A short code is a five or six-digit number that can be used to deliver messages to a mobile device. There are three main types of short codes:

  • Shared - many companies use the same short code
  • Unique random – random short code dedicated to a single company
  • Unique vanity – customized short code dedicated to a single company 

When you begin researching your short code options, you will quickly discover that the biggest differentiator between shared and dedicated short codes is investment. At first comparison, it is easy to gravitate towards the less expensive option. Let’s face it, if you can get something for almost nothing, you just might be your marketing team’s hero!

However, looking at just the price will not give you a full picture of your investment. In some cases, signing the less expensive option will work against the success of your SMS marketing.
To help you make the right decision, let’s look at pros and cons of each.

Dedicated Short Codes (Unique Random and Unique Vanity)

Pros:

  • Secure: Because you are the explicit user for the short code, you will not have to worry about sharing a subscriber database or platform with another company. For retail or service industries that need an elevated level of secure data, (e.g. financial organizations, health industries, or that have security certifications) a dedicated short code may be your only option.
  • Promotes Brand Recognition: As your customers become familiar with your short code, they begin to associate the number with your brand. It becomes a loyal relationship. The longer they are engaged, the more value your number has. If you want to change providers, you will want to take this relationship with you.
  • Portable: Once you lease a dedicated short code, you can take it with you from service provider to service provider. This encourages brand recognition and reduces confusions for your customers.
  • Control: A short code that belongs to you is not subjected to negligence from an outside company. Negligence includes poor marketing or compliance strategies that result in the short code being suspended or the customer unsubscribing. If a customer unsubscribes from a shared short code, they will be unsubscribed from all companies associated with the same shared short code. If the short code is suspended, it is suspended for all companies associated with the same shared short code. In either case, marketing to a customer is no longer compliant or possible; working against your marketing initiatives.
  • User Friendly Experience: With a dedicated short code, you have complete control over what keyword you would like to have your subscribers use to join your text alert program. A best practice is to make your keywords short and simple to reduce text errors and increase subscription engagement. 
  • Professional Services: When acquiring a dedicated short code, it usually comes with professional services to assist you in developing content, obtaining the short code, assuring compliance to FCC guidelines, and obtaining carrier approval on your behalf. Listrak will even set up your initial campaigns, provide a training session, and help you set up a strategy for successful use of your campaigns. This will take the strain off your internal teams and protect your investment from issues that you may not be aware of in the marketing channel.
  • Increased Deliverability Speed: Dedicated short codes usually have access to a dedicated messaging server. This allows for messaging deployment and throughput speeds to be at an optimal level as they are uninterrupted by other traffic on the short code. 

Cons:
  • The investment can be out of reach for small business depending on demographic. If your demographic is young, your marketing strategy may focus on text over email as the means to communicate.
  • Provisioning Time Period: It can take up to 10 weeks to provision a short code. In some cases, it may be slightly longer if there is a compliance issue.


Shared Short Codes

Pros:
  • Investment: Because you are sharing the short code with many other companies, there is a cost savings.
  • Time To Market: You can get to the market sooner because the short code is already provisioned.

Cons:
  • Fee Structures: Although shared short codes generally require less of an investment, they may come with usage fees, virtual short code fees, keyword priority fees, overage fees, and / or user fees. Depending on the type of fees associated with obtaining a shared short code, you may be charged for sending too many messages or requesting a keyword that is more user friendly to text by your customers. These fees will add up and may cost as much as a dedicated short code if you are not careful.
  • Keyword Limitations: A keyword must be unique to a short code. If company A uses “JOIN” to subscribe its’ customers to their list, company B may not. Company B will have to use a variant of “JOIN” if they want to use that keyword (e.g. “JOIN1”).
  • Brand Confusion: Shared short codes are shared by many companies to keep cost down, however there is no limit on how many or what companies can share the same short code. If you are sharing, you may be sharing with your direct competitors. If you are using similar keywords, there is a potential for your customers to confuse the programs they are signed up for. Additionally, receiving messages from many brands on the same short code, may be confusing to the customer as it will not have instant recognition from the short code number associated with it. 
  • Not Portable: Because you do not explicitly control the short code, you are not able to switch providers and take the number with you thus breaking any brand recognition established.
  • Negligence Risk: As previously mentioned, if a company associated with a shared short code provides a poor marketing strategy, the customer will easily unsubscribe from the short code. If you share that same short code, they will also be unsubscribed from your list if they happen to be subscribed. A more serious concern is if the company deploys a program that is not in compliance with the FCC, they could have the short code suspended for all companies associated with the short code. It will remain suspended until the compliance issue is resolved which may take months to rectify. 
  • Decreased Deployment Speeds: The more companies on a shared short code, the more volume of messages there may be. This will slow deployment speeds. Many providers help control this by imposing volume send fees, message send caps, and / or additional message fees. If you intend to build a substantial list, you will want to review these fees as it will be easy to breach the cap as your campaign gains engagement. 
  • Lack of Professional Services: Most shared short codes do not provide assistance in set up, compliance guidance, content, marketing strategy and other areas that will help you get the most out of your investment and protect you from being fined for serious compliance violations which may result in up to $500 per message sent out of compliance.

As you can see, there is a lot to consider when you are deciding your short code path. If you choose a shared short code, you may feel that you are saving money, however it may result in an unsuccessful, similarly priced solution. If you choose a dedicated short code, you will have increased marketing success, flexibility and support services, however it will be more of an investment. Both options have something to offer. It will be up to you to decide how it will affect your brand recognition, customer service, internal process and procedures, and the bottom line.

We’d love to hear about your experiences with shared or unique short codes! Let us know in the comments section.






Paula Spirawk
Business Systems Analyst

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