Chat vs SMS – Which is Better for Customer Service?

2018-08-30T12:18:56+00:00August 21st, 2018|Blog, Channel Shift, Chatbots, Omnichannel, SMS|

If you’re looking to improve your customer service provision, one of the first things to consider is how customers are communicating with your business. Do they prefer phone calls, SMS, email, or WhatsApp? Which channels are becoming more popular and which are fading? Which are most important to your business? One of the most significant customer service issues in recent times has been the growth of chat-based technologies. Here, we take a look at this technology, compare it to SMS, and ask which is more important for customer service.

SMS basics

For many years, the Short Message Service (or SMS messaging as it is more commonly known) was the dominant form of text-based communication. It acted as an alternative to making phone calls and was well suited to the delivery of short tracts of text or information.

A single message consists of 160 characters, after which a new message begins. It was first made available just over 30 years ago and became one of the most important features to be packaged with mobile phones. SMS is dependent on there being a signal from your mobile phone provider, and the cost of each message will vary depending on the network contract you’ve signed. While it’s a relatively limited form of communication, it proved ideally suited to early mobile phone usage.

Chat basics

close up of woman looking at smartphone

When we talk about chat, we could be referring to one of two concepts. The first is ‘live chat.’ This typically takes place on a web page or in an app and involves a real-time conversation between two or more individuals, using written language. It is commonly used for customer service purposes. The second concept revolves around chat-based apps. These are a kind of halfway home between live chat and SMS and are best typified by WhatsApp. They allow for conversations in both real-time and over a longer period.

Some people may disagree with applying the term ‘chat’ to both concepts, but for the purpose of this article, we will use the general idea of ‘chat’ to refer to both live chat and chat apps, together.

Changes in general usage

It’s safe to say that the general public’s attitude towards mobile technology has shifted in recent years. Smartphones are everywhere, and it is estimated that 85% of all UK adults have access to such a device. This has had an enormous impact on our habitual behaviours and the way we communicate and interact with one another.

SMS usage reached its peak in 2012 when approximately 150 billion SMS and MMS (Multimedia Messaging Service) messages were sent in one year. Since then, SMS use has steadily declined, with forecasts predicting that it will drop to 40 billion by 2020. However, this doesn’t mean that text-based communication itself is in danger. Instead, chat-based apps have taken over and, if current predictions are proven right, will completely replace SMS sometime in the near future.

What advantages does chat have over SMS?


So why has chat begun to replace SMS? There are many reasons chat has emerged as the dominant text-based mode of communication. They include;

  • Structural limitations – Whereas SMS is limited in size (to 160 characters) and is not well suited to anything but the written language, chat apps usually benefit from no such limitations. Emojis, images, GIFs, and videos can all be sent via chat-based apps, enriching conversations and allowing for more creative self-expression.
  • Cost – While the cost of an SMS varies from network to network and can depend on your contractual arrangements, it does cost money to send a message. On the other hand, chat is technically a free service. While you do have to pay for internet access (unlike you utilise someone else’s WiFi), it still generally works out as being far less expensive than SMS.
  • Asynchronous conversation – The idea of asynchronous conversation is incredibly important to modern chat apps. Asynchronous conversations are those that you can start, stop, and pick back up again at your discretion. This forms the basis of most modern chat apps and has become the fundamental way we organise our communications and interactions with those around us. Though SMS messages are stored, they aren’t asynchronous because they are independent of one another.

Which is better for customer service?

Both SMS and chat-based services are useful when it comes to the realm of customer service. However, chat may be edging it when we look at which is the more useful to modern businesses.

Concerning which type of service is used more, chat is now clearly an outright winner. SMS usage is dropping off and chat increasing, meaning that developing a strong chat service should be a priority. It also allows for a smoother, more personal interaction, which most modern users prefer to broken SMS communication.

However, there are some benefits to SMS. SMS is still widely used by certain demographics (particularly older generations), everyone with a mobile phone can receive SMS messages and, due to decreasing usage, it now has more of an impact when you receive an SMS. SMS can also be used as an enabler to chat offering a gateway via IVR or as a standalone with embedded links to chat. This approach makes it easy to deploy and offer within many existing telephony structures and plays a bit part in the customer migration to omni channel provisions.

The importance of SMS in an omnichannel approach

smartphone with social media apps

However, it’s also important to remember that both SMS and chat have their place in a genuinely omnichannel approach. As businesses attempt to develop a suitably wide array of communication channels to satisfy their customers, they’ll also need to consider the large number of users who still prefer communicating via SMS.

If the omnichannel approach is defined by the need to provide customers with practical and popular communication channels and allowing them to move seamlessly between them, SMS is going to play an important role. While it may be sensible to invest in improved chat technology because it’s taking over from SMS, it would be foolish to dismiss SMS entirely, just because its usage is falling.

What next?

While chat is undoubtedly more popular and SMS usage is declining, it might be a little self-defeating to ask which channel is more important for customer service. Both are integral elements in an omnichannel customer service system, and both have their advantages and disadvantages. If you’re to provide a wide variety of useful communication channels to your customers, you’ll need to develop both your chat and SMS systems.

Have a question or want further information on SMS and Chat options for your customers? Our expert team have been providing customer contact solutions for over 25 years. Call us on 01344 706111 or drop us a line.

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