Is SMS marketing worth it? As per the 2023 Mobile Consumer Trends report, more than 2 in 5 users want to hear from brands via both SMS and push notifications. Based on this data, there’s definitely good traction for SMS marketing. But is it generating the right amount of returns for businesses? You have to find out by calculating the return on investment (ROI) on SMS campaigns.

Let’s dive into what SMS marketing ROI is, how you can calculate it for your campaigns, and how you can  optimize it using a tool like Plivo CX.

What is SMS Marketing ROI and what are the factors that influence it?

SMS marketing ROI is a metric that  measures the profitability of SMS campaigns, essentially showing whether you’re achieving the   right returns on your investment  in  these campaigns. 

Top factors that influence SMS marketing ROI include:

• Relevant and concise content
• Appropriate timing
• Personalized messaging
• Frequency of messages

What is an average SMS marketing ROI?

Figuring out the average SMS marketing ROI can be tricky because it varies a lot depending on the brand, industry, campaign, and what you're trying to achieve. 

Upcity surveyed 300 digital marketing professionals on the effectiveness of SMS marketing campaigns, and the results were impressive:  51% of small and medium business marketers reported an average ROI of $21 to $40 for every dollar spent on their SMS marketing efforts.

The higher your ROI is above 100%, the better. A 100% ROI means you broke even — essentially, you earned back exactly what you spent. But when your ROI exceeds 100 percent, that means you’ve made a profit.

Why SMS marketing ROI matters

 Monitoring SMS marketing ROI is crucial for several  reasons: 

1. Optimizes budget

Knowing what works and what doesn’t allows you to allocate your budget more effectively to maximize ROI. You can spend more on  high-performing campaigns  and reduce spending   on underperforming ones.  

2. Improves performance

Calculating SMS marketing ROI helps in optimizing campaigns.  Since marketing is often a process of trial and error, regularly assessing ROI on your SMS marketing lets you determine if an idea is successful or needs adjustment.

By allocating a small budget to new ideas and measuring their ROI, you can iterate until achieving optimal performance.

3. Builds long-term strategy

 Tracking the SMS marketing ROI of different campaigns   provides valuable insights into   customer behavior and preferences. This information  helps you plan more effective future campaigns and build a robust long-term strategy.

Steps to calculate ROI on SMS marketing campaigns

Measuring SMS marketing ROI means  assessing how much profit you gain from your  investment. 

Here’s a step-by-step guide for calculating SMS marketing ROI:

1. Determine total revenue

Find the total revenue generated by the campaign, such as from conversions, purchases, etc. 

2. Define campaign cost

Add  up all the costs associated with creating the SMS campaign, including SMS marketing platform fees and any other  expenses.

3. Determine net profit

Calculate your profit by subtracting total campaign cost from the revenue.   

Net profit = Total revenue - Total campaign cost

4. Calculate ROI

You can calculate ROI with a simple formula:

ROI percentage = (Net profit/Campaign cost)*100

Let's look at  an example. Suppose you planned an SMS marketing campaign where  you sent promotional emails to 15,000 contacts using the Plivo CX Growth plan (priced at $99 per month). Out of 15,000 contacts, 800 customers  made a purchase of $50 each.

Total revenue = 800 * $50 = $4,000

Campaign cost = $99

Net profit = Total revenue - Campaign cost = $4,000 - $99 = $3,901

ROI = (Net profit/Campaign cost)*100 = (3,901/99)*100 = 3940.40%

How you can improve SMS marketing ROI

Implement the following tips to boost SMS marketing ROI:

1. Segment audience

One of the simplest SMS marketing best practices is to segment your  audience so that subscribers  receive only the messages that are most relevant to them. Segmentation enables you to send  targeted messages to specific subscriber groups based on their interests, demographics, behaviors, or other characteristics, increasing engagement and conversion rates. 

Tip: Use an SMS marketing automation platform like Plivo CX for SMS marketing that automates the segmentation process by automatically categorizing users into segments based on key characteristics like demographics, browsing activity, online behavior, etc. With Plivo CX, you can run well-targeted campaigns tailored to specific  user segments. 

2. Optimize messages

Another important step to increase the ROI of SMS campaigns is to optimize your  messages by making the following changes:

• Keep  messages concise
• Make them engaging by using graphics
• Personalize messages based on customer data
• Add a clear, strong call to action
• Include social proof (if relevant)

Tip: Creating and optimizing  multiple campaigns is time-consuming. Simplify this with  AI. 

Plivo CX includes an AI assistant that helps create optimized campaigns with a single click. Once you determine the goal, parameters, timing, urgency, and even voice of the message, Copywriter AI will instantly craft options for you and even fine-tune the messages before sending. 

3. Optimize timing and frequency

Optimizing messages alone isn’t enough; finding the right timing and frequency is also essential. 

Bombarding customers with too many messages is the top reason consumers opt out of SMS marketing — nearly 60% of smartphone users cite excessive updates as the main reason for turning off notifications or unsubscribing from SMS messages. 

Finding the ideal timing and frequency often involves a process of trial and error.

Tip: 

Instead of testing times randomly, leverage past data to identify the best times to send messages. AI can make this process easier by analyzing historical data and spotting trends. Plivo CX’s AI assistant can help pinpoint optimal message timing.

4. Test campaigns

Segmenting users and optimizing messages are effective steps, but testing is crucial to know what works best.  

Run test campaigns and  analyze metrics regularly to understand what’s working well. 

Testing variations of messages on a smaller budget can provide insights before committing to larger investments. 

Tip: Track all the key metrics of all campaigns to assess effectiveness. Plivo CX automatically tracks important metrics such as open rate, click rate, converted rate, and revenue. 

Plivo CX also integrates seamlessly with Shopify, allowing you to track both SMS marketing campaigns alongside  order data for more accurate  conversion insights. 

Just remember, optimizing your SMS marketing ROI isn’t something you do once and forget about — it’s an ongoing process. 

Make it a habit to regularly check your data and tweak your strategy as you go. By staying on top of the key metrics and always looking for ways to improve, you’ll be well on your way to getting the most out of your SMS marketing efforts.

Run SMS marketing campaigns with Plivo CX

Plivo CX is a robust SMS marketing platform designed to help your Shopify brand drive real success with SMS marketing. 

By partnering with Plivo CX, you’ll effectively communicate with your existing customers, expand your marketing list, optimize lead generation cycles, and more.

Currently tailored for e-commerce businesses, Plivo CX helps you engage with customers across SMS, MMS, WhatsApp, and email . It offers all the key features required to boost your SMS marketing ROI:

✅Segmentation

✅AI assistant

✅Reporting and analytics

Plivo CX also leverages  Plivo’s premium carrier network, enabling you  to send personalized messages to over 220 countries and territories.

Ready to optimize your SMS marketing ROI? Schedule a demo today to explore the powerful features and capabilities of Plivo CX Engage.

 By reducing external dependence, Plivo assures high SMS deliverability and affordability. You can send a text message in the US for as little as $0.0065 via Plivo compared to the $0.0150/SMS cost of competitors. 

“I could tell from the get-go that Plivo was going to offer outstanding service compared to some of the other SMS providers. ​Anytime we've ever reached out to Plivo for any questions, we get responses quickly and with answers that make sense.” ~ Jacob Martinez, Product Owner, Deckers.

FAQs

1. What is the formula for SMS ROI?

SMS ROI is calculated by dividing the profit of the campaign against the total investment. A simple SMS marketing ROI formula for a marketing campaign is: ROI percentage = ((Total revenue - Campaign cost)/Campaign cost)*100.

2. What factors influence SMS marketing ROI?

The primary factors that influence SMS marketing ROI include:

• Relevant and concise content
• Appropriate timing
• Personalized messages
• Frequency of messages

3. What kind of messages can I send in my SMS marketing campaign?

The most common examples of SMS marketing are:

• Welcome messages
• Flash deals
• Personalized updates
• Product order and shipping updates
• Festive offers
• Personalized offers

4. What is a good SMS marketing ROI?

Companies are experiencing a positive SMS marketing ROI of  $21 to $40 for every dollar spent on their SMS marketing campaigns.

5. Can SMS marketing ROI fluctuate over time?

Yes, SMS marketing ROI can fluctuate over time depending on market dynamics, consumer demands, competition, and campaigns. It's important to optimize  SMS campaigns regularly for  best performance.

According to McKinsey, companies excelling at customer experience personalization can generate 40% more revenue from marketing activities than average players in 2023. On top of that, Accenture data suggests that 83% of consumers are willing to share their data for a personalized experience. 

Therefore, it’s evident: the stage is set, and the right time to personalize customer experience is now. This is also why 36% of companies in AMER consider this a top priority and plan to invest more resources in it.

But the question is, how do you go about personalizing customer experience? What are the steps you must take to develop a solid strategy that brings the maximum ROI?

In this blog post, we’ll explore the step-by-step process for successfully creating a personalized experience for your buyers and building a loyal customer base. 

What is a personalized customer experience?

Personalized customer experience focuses on making your customers feel special and understood. It's like being a great host at a party—you remember your guests' preferences, anticipate their needs, and make them feel right at home.

For brands, this means getting to know your customers on a deeper level—understanding what makes them tick, what they like, and what they're looking for when they interact with your brand. Then, you use this knowledge to tailor their experience just for them.

According to a 2024 Deloitte report, 50% more brands now consider personalization a core component of their customer strategy compared to two years ago. Additionally, brands plan to increase spending on personalization by an average of 29% in 2024. 

Key elements of personalization

• Understanding individual customer preferences
• Anticipating their needs
• Tailoring interactions across all touchpoints regardless of channels 
• Creating seamless experiences across storefronts
  

Think of it as the difference between walking into a store where nobody knows you versus your favorite local coffee shop where the barista starts making your usual order as soon as you walk in. That's the kind of personalized touch we're talking about but on a larger scale.

Benefits of a personalized customer experience

Mckinsey notes that a significant 71% of consumers expect personalized interactions from companies, and 76% express frustration when these expectations are unmet. With that in mind, let us explore the top four benefits of highly personalized customer experiences:

1.Boosts customer engagement 

According to a 2024 Statista survey, 51% of marketers report improved customer experience as one of the main benefits of a personalization strategy. Such strategies prompt users to interact with your branded messages and content, which in turn increases customer engagement, improves in-store experience and results in more sales.

2.Increases revenue

Personalized customer experience has the potential to increase brand revenue. The Deloitte study indicates that more than 8 in 10 consumers point to personalized offers as a significant influence on their purchase decisions. Clearly, marketers should leverage these tactics and position their brands as the top choice among their customers. 

3.Improves customer satisfaction

According to the 2024 Deloitte study, brands that make personalization efforts experience 57% more customer satisfaction than brands that are yet to streamline their efforts. 

Tailored product recommendations, optimized user interactions, and swift responses often make customers feel more understood and valued, resulting in higher customer satisfaction. And as the saying goes, a satisfied customer means a loyal customer.

4.Builds customer trust

When you actively listen to your customers and use their feedback to design unique user experiences, it sends a clear message that your brand genuinely cares about their needs and preferences. 

In fact, consumers expect brands to demonstrate whether they know them on a personal level. However, they prioritize tangible benefits from personalization, with 78% wanting it to help them save money.

7 steps to create a personalized customer experience

According to the Deloitte report, personalization leaders outperform low-maturity brands across several key metrics, such as:

• Conversion rate: 54% for personalization leaders vs. 38% for low-maturity brands
• Customer satisfaction: 61% vs. 37%
• Lifetime value: 57% vs. 29%
• Customer engagement: 61% vs. 44%
  

These statistics highlight the effectiveness of well-executed personalization tactics. To ensure you also develop such an impactful strategy and reap the benefits, follow this step-by-step process:

1. Learn about your customers

You cannot deliver personalized customer experiences without understanding your customers. So, go beyond the basic information by comprehensively using AI for customer experience and identifying what they need.

For example, you can analyze these data points using ML and NLP algorithms to build customer personas and understand your audience better:

• Basic information: Name, age, address, email, phone number, and date of birth
• Demographics: Location, lifestyle, culture, marital status, job title, and income 
• Product-related: Pain points, interests, challenges, goals, and desires
• Consumer behavior: Pages viewed, time on site, items on wishlist, items added to cart, and social media engagement
• Repeat customer data: Past purchases, average order value, customer lifetime value, and the time interval between purchases

Subsequently, consolidate these data points from email and marketing software solutions, CRMs, and content management systems into a single database to streamline your personalization efforts. 

2. Segment your customers

Customer segmentation is another key component of your personalization strategy. It involves classifying your audience into different groups based on their shared personalities, which will help you target diverse customer groups with super-focussed messages, resonating with your audience and driving more responses. 

To help you get started, segment your traffic based on the following conditions: 

• Geolocation/IP address: Group people from the same city, state, and country
• Traffic sources: Organic search, social media links, pay-per-click, special offers using influencers' links, and email marketing
• Behaviors: Page visits, clicks, downloads, and video plays 
• Customer stage: New leads, repeat buyers, cart abandoners, VIP customers, and newsletter subscribers 

You can try the Engage module of Plivo CX to appropriately segment your customers based on key attributes. No coding is required. 

Simply import contacts from various sources like your eCommerce store, landing pages, and forms. Gain a comprehensive view of your customers with insights into their activity and purchase history. Then, utilize the intuitive segment builder to create targeted audiences based on specific attributes, enabling personalized messaging and effective marketing campaigns.

3. Test personalization efforts across channels

Embracing omnichannel support helps you reach customers through the communication channel they prefer the most. Once you've completed the basic setup, test and optimize your personalization efforts across different channels. You can do it this way: 

1. Choose the proper channels for personalizing content, communication, and products. 
2. Next, start small by showing relevant languages, currencies, and shipping details based on different customers’ location data. 
3. You can also try suggesting relevant products based on each customer’s job, income, and purchase behavior.

Another great way to implement personalized product recommendations is by displaying ‘Bestsellers,’ ‘Frequently Bought Together,’ ‘Most Popular,’ and ‘Continue Shopping’ lists to help customers pick up where they left off and find relevant items based on their previous purchases.

As an all-in-one, omnichannel customer service platform, Plivo CX comes with a unified agent desktop that brings together multiple channels, like email, voice, SMS, WhatsApp, and live chat, in a single window pane. 

Agents no longer need to switch between channels to find the 360° customer context and offer effective solutions. On the other hand, customers can approach your brand on their preferred channels, making this a win-win feature for both stakeholders. 

4. Gather customer feedback

Since customers' needs and expectations evolve constantly, it's essential to monitor satisfaction levels and modify brand strategies. Gather customer feedback and use analytics tools to understand what works and what doesn't. 

You can also create different types of surveys—single-answer questions, multiple-choice, dropdown, emojis, and numerical scales—and embed them on your website, blog page, emails, checkout pages, and mobile app to collect feedback. 

Plivo CX offers comprehensive Metrics & Reporting so that you can execute real-time monitoring of queue, operations, and agent performance. With historical reports, assess past performance to identify trends and areas for improvement. The tool also lets you gather customer feedback to measure satisfaction and identify improvement opportunities.

💡Tip: Wondering how to get started? Use simple questions such as “How do you like our personalized recommendations?” or “How likely are you to recommend our products to your friend?” that customers can answer on a scale of 1 to 5. 

5. Adopt real-time customer engagement

Real-time customer engagement can enhance the efficiency of your personalization strategies and increase conversion rates. You can achieve this by contacting customers on social media platforms, sending personalized push notifications, and using gamification. 

Give your customers instant support with Plivo CX's smart self-service chatbots. These OpenAI-powered bots can handle routine inquiries, so customers get quick answers 24/7. Plus, you can train the bots with custom datasets to ensure maximum relevancy in responses. 

This intelligent solution not only reduces response times but also frees up agents to focus on higher-value tasks, leading to a more productive and customer-centric support team working towards hyperfocused customer engagement.

Read more: Automation in Action: 6 Ways Companies Are Nailing Customer Service

6. Leverage AI to boost personalization

Using Artificial Intelligence (AI) technologies can help you personalize customer experience at scale. AI tools can effectively analyze large amounts of customer data to identify patterns, understand expectations, and anticipate needs. 

This will allow you to offer tailored product recommendations for each customer and proactively address their issues. 

Plivo CX goes beyond basic chatbot functionality by incorporating advanced AI capabilities to streamline your customer service operations. Our AI engine can intelligently categorize and prioritize incoming tickets, ensuring that urgent issues are addressed promptly. 

Furthermore, you can customize AI agents with guardrails to reflect your brand's identity, policies, and processes. This ensures that your AI stays on topic and consistently aligns with your company's standards, providing a cohesive and engaging customer experience.

7. Ensure data privacy

Here are some tips to help you secure customer data and prevent potential data breaches:

• Use password management tools to create and store complex passwords 
• Limit data access to support agents and marketing managers
• Eliminate data silos and store customers' data in a unified, secured place  
• Ensure the personalization tool you use complies with industry regulations such as GDPR, HIPAA, CCPA, PCI DSS, and SOC 2 to protect customer data
• Conduct regular security audits and assessments to detect any new threats

When it comes to data security, Plivo CX takes complete security ownership of your data. We employ a multi-layered approach to security, encompassing physical, network, application, and data protection measures. 

Our infrastructure is hosted in state-of-the-art facilities with 24/7 surveillance and strict access controls. All data is encrypted in transit and at rest, and we maintain strict access limitations to protect sensitive information. 

Plus, we undergo regular audits to ensure compliance with industry standards like SOC 2, HIPAA/HITECH, PCI DSS, ISO 27001:2022, and so on. 

Enjoy the benefits of personalized customer experience with Plivo CX

Modern customers expect personalized customer experiences across all channels, from voice calls, emails, texts, live chat, or social media. Therefore, generic content and product recommendations don’t cut it anymore and could bleed you out in the competition. 

The Service module of Plivo CX offers a comprehensive suite of features to help you better understand customers’ expectations and deliver personalized experiences. The platform's intuitive AI-powered chatbots, IVR, omnichannel support, and unified agent desktop can help you live up to their expectations with prompt and nuanced responses. 

On the other hand, in the Engage module of Plivo CX, you can use a handy segment builder to target specific audiences based on specific attributes. 

Finally, the tool is GDPR, SOC-2, HIPAA, and CPRA compliant. Therefore, there are no concerns about data security or cyber threats.  

Ready to take your personalization game to the next level? 

Book a demo today!

Variety Research’s The State of SMS Marketing in 2023 report reveals that nearly 45% of consumers prefer receiving promotional messages from brands. Combine that with the fact that people check their phones 144 times a day, and SMS automatically becomes a marketing channel you cannot overlook.

Developed as one of the most direct and unassuming communication channels, SMS helps you deliver messages that reach your customers where they’re already spending time—right on their phones.

But that’s only one of the advantages of SMS marketing. 

What else can it do for your business? How can you get the maximum ROI out of your SMS campaigns? And how can you integrate SMS with your other marketing channels for a truly connected customer experience?

In this guide, we will go over the advantages of SMS marketing. Let’s begin!

Defining the SMS

SMS stands for short message service. It is a type of text message sent from one mobile device to another over any cellular network. 

These messages are generally limited to 160 characters and contain only text—it doesn’t support images, videos, or other media. 

However, if you want to add images, videos, or audio—or go beyond the 160-character limit—your message will turn into a multimedia messaging service (MMS). 

Note that you require an internet connection to send and receive MMS. 

6 important benefits of SMS marketing

Plus, according to Salesforce’s State of the Connected Consumer Report, 66% of customers prefer to be contacted through text messages instead of other channels. Also, the latest SimpleTexting survey suggests that 45% more businesses are using SMS marketing now compared to this time in 2022. 

So, what is driving this surge? 

Let’s explore a few core advantages that are convincing marketers to go for SMS instead of other marketing channels:

1. SMS marketing is trustworthy and personal

As noted above, SMS messages go straight to your customer's phone. This direct line makes them feel more personal than emails or calls. People often check texts immediately, sometimes reading them from the notification bar.

In fact, according to the Validity report from 2023, 19% of consumers prefer getting messages via SMS, which is higher than social media (16%), app notifications (6%), and direct mail (6%).

Another reason SMS is popular is that—unlike long, drawn-out emails, texts are short, to the point, and easily skimmable. 

2. SMS marketing offers an excellent ROI

While each marketing channel has strengths, SMS marketing stands out for its exceptionally high open rates, quick response times, and strong ROI. It's particularly effective for time-sensitive communications and can complement other marketing efforts. 

Moreover, during high-volume sales periods like Black Friday, SMS marketing can deliver up to a 2000% ROI, showcasing its effectiveness in driving revenue.

Now, let us review how SMS marketing stacks up against other marketing channels based on the latest data: 

SMS vs. email marketing

• ROI: SMS marketing generates $71 in revenue for every $1 spent, while email marketing returns $42 for every $1 invested. This makes SMS nearly 70% more profitable in terms of ROI.
• Open rates: SMS messages have an open rate of almost 100%, compared to email's average open rate of around 20%.
• Response rates: When it comes to response rate, SMS boasts a 45% rate, significantly higher than email's 6%.
• Speed: 40% of consumers check SMS notifications within 5 minutes of receiving them, making it a much faster channel for time-sensitive communications.

SMS vs. SMM

• ROI: According to Textline data, while SMS marketing can deliver up to $71 for every $1 spent, social media ad campaigns have an average ROI of 250%. However, it's important to note that social media ROI can be more challenging to measure accurately.
• Engagement: TikTok leads social media platforms with a 4.25% engagement rate, followed by Instagram at 0.6%. SMS, with its high open and response rates, can potentially offer even higher engagement.
• Reach: Social media platforms have massive user bases (e.g., Instagram with 1.4 billion monthly active users), but SMS can reach almost anyone with a mobile phone, regardless of their social media usage.

SMS vs. PPC

• ROI: WordStream notes that PPC has an average ROI of 200%, which is lower than SMS marketing's potential return.
• CTR: The average CTR for search ads across all industries is 3.52%, while SMS messages have much higher open and response rates.

Cost: According to Semrush, the average cost per click for Google Ads is $2.69, whereas SMS marketing can be more cost-effective, especially for businesses sending bulk messages. For instance, with Plivo’s low-latency premium carrier network with coverage across 220+ countries, SMS marketing costs can be drastically reduced.

However, we must note that the best approach often involves using a mix of channels to reach customers through their preferred methods of communication. 

3. SMS marketing is more impactful

The human attention span is notoriously shrinking. In this context, SMS marketing can grab attention quickly through short, impactful messages. Compared to email marketing, where lengthy messages can get buried or cold calling, the response to which can often depend on the receiver’s mood, SMS marketing is a non-intrusive way to deliver real-time, high-impact information on the fly.

As noted above, SMS has a staggering open rate—2.7x more than the 37.3% average open rate for email marketing and 19.6x the 4.8% average response rate for cold calls. 

This means your messages are almost guaranteed to be seen when delivered via SMS.

This high engagement is because of the to-the-point, personal nature of SMS marketing and the fact that readers are not distracted away from the CTA. 

4. SMS marketing has low competition

Another vital aspect is competition—only 60.3% of companies use SMS marketing. In contrast, 87% of marketers use email marketing to distribute content, and 31% use email newsletters to nurture leads. 

This lower level of competition presents a distinct advantage, allowing businesses to stand out and deliver impactful messages.

5. SMS marketing can be easily combined with other channels

Your customers can use any channel at any time. So, engaging them via multiple channels and a consistent brand experience increases the chances of conversion. 

You can use both SMS and email marketing simultaneously to improve customer experience by: 

• Using email to collect phone numbers for SMS marketing campaigns
• Recovering lost sales with abandoned cart emails combined with text messages
• Sending personalized recommendations via email and following up with an SMS reminder
• Creating a multi-touchpoint experience where you use SMS to drive attention to your email campaign
• Using SMS to announce flash sales while your emails and social media posts get into the details of the various deals being offered

Some marketers also sync their company’s calendars with SMS to send appointment and event reminders, such as for webinars or service appointments, to reduce no-shows and increase engagement. 

6. No changing algorithms to battle with in SMS marketing

Social media platforms and search engines like Google use sophisticated algorithms to control content visibility and recommendations. This means your content is constantly at the mercy of these shifting algorithms. 

Your content might be on Google's first page and then suddenly get buried under the results pile after a Helpful Content Update (HCU), which sent shockwaves through the SEO industry because it penalized niche blogs and content creators. Websites with stable rankings for years were pushed off the top in favor of larger, corporate-owned websites. 

Google’s March 2024 Core Update made things even worse because it targeted (and deindexed) older domains—further punishing independent content creators. Bloggers and niche website owners were penalized again despite sticking to best practices. 

While the August 2024 update did fix some of the damage, thousands of sites never bounced back to their pre-September 2023 rankings. This is the reality of marketing on search engines and creates endless frustration for marketers, with many feeling powerless as their hard-earned rankings disappear overnight. 

Social media is no different—algorithm updates on platforms like Instagram and Facebook may suddenly reduce your organic reach, which forces you to pay for visibility.

In contrast, SMS marketing has no changing algorithms that dictate whether or not your messages will be seen. Once you send an SMS, it lands directly in your customer’s inbox—which makes this channel simple, stable, and reliable. 

This means you have zero need to constantly adjust your strategy to work around changing guidelines or fight for visibility. 

If utilized properly with ample personalization and the right tools, SMS marketing gives you full control over how and when you reach your audience without being buried by algorithms.

Elevate your SMS marketing strategy with Plivo CX

SMS messages are a reliable, cost-effective, and impactful way to connect with your audience directly. With an AI-driven omnichannel customer engagement platform like Plivo CX, you can manage your SMS marketing campaigns from start to finish while downsizing your SMS costs by 70% and driving ~3x ROI from the campaigns. 

It comes with several features, such as: 

• Powerful audience targeting: Plivo CX empowers you to precisely target your audience by integrating with Shopify or importing your existing contacts. You can then segment these contacts based on various factors like purchase history and demographics, ensuring your messages reach the right people.
• Blazing-fast campaigns: Creating campaigns is a breeze with pre-built templates and AI-powered content generation, allowing you to launch in minutes and see quick results.
• AI-powered content creation: If you're ever stuck for ideas, our Copywriter AI can help you overcome writer's block. Simply tell the AI your objective—your goals, desired tone, level of urgency, etc.—and it will instantly generate a variety of creative options for you to choose from.
  You can then review, select, and even fine-tune the AI's suggestions before sending, ensuring your marketing copy is always top-notch. It's the perfect solution for eCommerce brands looking to scale their content creation and launch more personalized campaigns.
• Multi-channel engagement: To maximize your reach, Plivo CX enables you to engage customers across multiple channels, including SMS/MMS, email, and WhatsApp.

That’s not all! Plivo’s SMS API platform can also catapult your marketing campaigns in several ways:

• SMS API platform: The robust SMS API platform enables businesses to programmatically send and receive text messages, facilitating global customer interactions. 
• Low latency: Plus, you can rely on our proprietary and award-winning premium carrier network that maintains high SMS delivery and open rates regardless of volume or send rate. 
• Extensive global coverage: With coverage across 220+ countries across North America, Europe, Asia, Oceania, South America, and Africa, it offers the flexibility to customize the Sender ID in 100 countries outside the US and Canada.
• Diverse options: The platform supports multiple sending and receiving options to suit various business needs. Users can send and receive SMS using local phone numbers, alphanumeric sender IDs, toll-free numbers, or shortcodes. 
• Customer feedback collection: For gathering customer feedback, Plivo's SMS API can be used to conduct surveys by sending and receiving SMS messages. 

Want to learn about how to go from ideation to execution?

Sign up for a free trial today!

Intercom positions itself as an AI-first customer service platform and is popular among companies for building customer relationships. It provides unified campaigns and chatbots for increased website conversion and revenue growth.

However, despite a widespread customer base and a comprehensive feature set, many users are keen on finding alternatives.
‍
One of the primary reasons is its complex pricing structure, which can be potentially overwhelming for the average user. Many users find Intercom's user interface (UI) overwhelming, whereas many criticize its API for its confusing terminology and complexity, which can pose integration challenges. On top of it, Intercom’s insufficient customer support may present drawbacks for potential users.

That is why it is important to carefully consider each Intercom pricing point, as well as additional costs and variables such as company size and user count.

This article will deeply explore each aspect of Intercom pricing strategy and introduce some top-rated Intercom alternatives to ensure you get your money’s worth.

Overview of Intercom’s pricing plans

Intercom pricing plans come in a three-tier model as follows:  

• Essential Plan: This entry-level plan is tailored for small teams and startups. It offers core features like a shared inbox, basic chatbots, and simple automations. This plan provides a solid foundation for businesses just starting to scale their customer engagement efforts, offering only the necessary tools.
   
• Advanced Plan: Designed for growing businesses, this plan includes more sophisticated features. It offers multiple team inboxes, social media channel integration, and enhanced analytics. The Advanced Plan is ideal for companies experiencing growth, managing increased customer interactions efficiently, and requiring more robust tools for team collaboration.
  
  
• Expert Plan: This top-tier plan caters to large enterprises with complex needs. It includes advanced features like workload management, custom roles, and enterprise-grade security. The Expert Plan provides maximum scalability and control, making it suitable for organizations with sophisticated customer engagement requirements and large teams.
  
  
• Flexible Options: Intercom also offers various add-ons and both monthly and annual billing options. These flexible choices allow businesses to customize their plan according to specific needs and budget constraints.

Additional information

Some of the important points to note:

• The monthly seat price depends on your chosen plan, with no maximum or minimum seats. 
• Intercom offers an Early Stage Program for startups where they can receive up to 90% discount
• Users can easily upgrade or downgrade between these plans
• All plans include access to Fin AI Agent, an intuitive customer support chatbot,  with usage charged at $0.99 per resolution
• Fin AI Copilot offers limited free usage (10 conversations per month per seat) on all plans, with an option to upgrade to unlimited usage for an additional fee
• The Proactive Support Plus add-on is available for $99 per month across all plans
• Each teammate requires a seat to get access to Intercom’s customer service solution
• The Advanced and Expert plans feature several lite seats, which provide limited access to Intercom
• A 14-day free trial is available
• No credit card is required to avail of the free trial
• You can also access the Pricing Calculator

Intercom’s pricing plans: A detailed breakdown

An in-depth look at the Intercom pricing strategy

Now that you have a fair idea of Intercom's pricing plans let’s explore how they calculate pricing and additional costs.

Factors influencing Intercom pricing

Calculating your monthly Intercom invoice could be challenging. Once you integrate Intercom into your workflow, there are these key factors that come into play:

1.Fin AI Agent-driven resolutions

As noted above, if you have installed the Fin AI Agent chatbot, you are charged $0.99 monthly for each resolution.

2.People reached

This calculates the total number of unique customers you've contacted across all your communication channels. It essentially counts every customer you've sent a message to, regardless of the channel.

That means if you sent 100 emails and 50 bounced, you’ll still be charged for the 100 people reached. It also considers people who have received and engaged with an outbound message. 

3.Seats

• Full seats: Each teammate using Intercom must have a designated full seat, which provides access to products and features within your chosen plan.
  
  
• Lite seats: Included in Advanced and Expert plans, Lite seats offer limited access to Intercom for cross-functional collaboration at no extra cost. The Essential plan does not include Lite seats.
  
  
• Additional seats: Each additional agent seat is charged extra based on your subscription plan. Each additional seat on the Essential plan may be added for $39/month, $99/month for the Advanced plan and $139/month for the Expert plan.

Intercom pricing: Additional costs

To enjoy Intercom to the fullest, you have to pay for a set of additional costs:

1.WhatsApp

Intercom has different pricing for inbound and outbound WhatsApp and is charged per ‘conversation.’ The unit costs vary by volume.

2.SMS

SMS is charged per the ‘SMS sent and/or received’ number. The unit cost and prices may vary by volume and region, respectively.

3.Emails and email Campaigns

All email campaigns are charged per the number of ‘bulk emails sent’ — emails sent to more than one customer. Emails sent from the inbox or the inbound emails from your customers and responses to those emails are included in your plan at no additional charge.

4.Proactive Support Plus & Messages Sent

If you purchase Proactive Support Plus, you can access several capabilities, including product tours, surveys, in-app posts, mobile push, and mobile carousels. 

The base fee is $99/month for 500 messages sent monthly. Messages sent above 500/month are charged additional costs and are charged per ‘message sent.

Intercom pricing plans: Pros & cons

Based on extensive research and thousands of customer reviews, we found the following pros and cons of Intercom from a pricing viewpoint:

Pros:

1. Fin, a worthwhile investment: Even though Fin, the chatbot, comes at an additional cost, users have expressed their satisfaction with its use. It is easy to set up and provides value for money.

2. Free trial and discounts for startups: Intercom offers a free trial on all plans, which allows users to test features before committing. It also offers an Early Stage Program for startups with up to a 90% discount. Users like SaaS startup owners with over three years of experience using Intercom have expressed that it provided significant cost savings during the first year.

Cons:

1. Can become expensive: A small business owner with 50 or fewer employees noted that Intercom prices start to get hefty once you exit the early stage program, which offers up to 90% discount.

2. Support plans can be costly: A user in a small company with 1-10 employees who has been using Intercom for more than 2 years expressed difficulty accessing support. Paid support starts at $59 a month, which can be expensive for small businesses.

5 cost-effective alternatives to Intercom

Evidently, Intercom's pricing can be complex and unpredictable, with hidden costs that quickly add up. To help you avoid overspending, we've compiled a list of Intercom alternatives that offer comparable or even superior features at a more affordable price.

1. Plivo CX 

Plivo CX is a cloud-based, all-in-one omnichannel customer service platform that empowers businesses to deliver exceptional support experiences across multiple channels.

With its unified agent desktop, your team can seamlessly handle customer conversations via email, voice, SMS, WhatsApp, and live chat from a single interface. This streamlines your support operations and ensures a consistent customer experience.

Skills-based routing ensures that calls are directed to the most qualified agents, while multi-language support allows you to cater to a global audience.

One of the standout features of Plivo CX is its integration with OpenAI-powered chatbots. You can easily train and deploy smart chatbots to handle routine inquiries automatically. Use the no-code visual workflow builder to create custom workflows and automations for better convenience.

Plivo CX also offers wide-ranging integrations with your existing tech stack, including CRM, ERP, order management, payment systems, and helpdesk tools. Additionally, real-time analytics and customizable reports give you valuable insights into your team's performance and customer interactions.

Plus, with features like call recording, internal notes, and collaboration tools, Plivo CX facilitates knowledge sharing and continuous improvement within your team.

Finally, the platform prioritizes security and compliance, ensuring that your customer data is protected and your support operations adhere to the latest industry regulations. 

Why is Plivo CX a better alternative?

Plivo CX addresses several limitations of Intercom, particularly in terms of pricing, channel flexibility, integration capabilities, and more. These advantages make Plivo CX a compelling alternative, especially for businesses seeking a more cost-effective, flexible, and feature-rich customer service solution.
‍
Let’s go over the key advantages of Plivo CX:

• Cost-effective pricing: Plivo CX provides significantly better value, with chat-only packages starting at half the price of Intercom's equivalent offerings. This makes Plivo CX a more accessible option for small teams and startups with limited budgets.
  
  
• Advanced voice capabilities: While Intercom's voice channel is basic, Plivo CX leverages Plivo’s premium carrier network, available in over 220 countries. This proprietary telecommunications infrastructure provides a more advanced, low-latency, and reliable voice communication solution. This particularly helps businesses that heavily rely on voice support.
  
  
• Faster issue resolution: Unlike Intercom, Plivo CX allows agents to switch between channels seamlessly or use multiple channels simultaneously. Such flexibility enables quicker issue resolution and a more efficient customer service process.

• Comprehensive integration capabilities: Plivo CX offers custom integrations with home-grown systems, a feature not available in Intercom.

• Superior monitoring and supervision: The tool offers enhanced capabilities for monitoring and supervising customer interactions, a feature that Intercom lacks. 

• Omnichannel communication: Plivo CX enables seamless communication across multiple channels, including voice, chat, SMS, and WhatsApp, all from a single platform. This comprehensive approach to omnichannel support is more advanced than Intercom's offering.

Plivo CX Pricing:

Omnichannel (annual plans)

• Growth: $29 per user per month
• Business: $69 per user per month
• Enterprise: Available on request

Voice-Only (annual plans)

• Growth: $25 per user per month
• Business: $40 per user per month
• Enterprise: Available on request

Chat-Only (annual plans)

• Growth: $15 per user per month
• Business: $30 per user per month
• Enterprise: Available on request

2. HelpCrunch

HelpCrunch allows agents to easily manage customer interactions across multiple channels from a single tool. In addition to email and live chat, this platform supports other messaging platforms such as Facebook, Instagram, and WhatsApp. 

It also features a knowledge base builder to help customers find helpful information independently.

Why is HelpCrunch a better alternative?

• Offers free data migration from Intercom
• Features a chatbot with a no-code visual editor and bot templates that can be launched immediately
• Provides an integrated knowledge base with built-in SEO features, which is included in all pricing plans

HelpCrunch Pricing:

Monthly plans

• Basic: $12/user/month 
• Pro: $20/user/month 
• Unlimited: $496/month

Annual plans 

• Basic: $10/user/month
• Pro: $16/user/month
• Unlimited: $396/unlimited user/month

3. Freshdesk Omni

Freshdesk Omni customer service suite is an AI-first, all-in-one solution that provides a seamless customer experience across all channels. It features automated self-service and an advanced ticketing management system for issues requiring team collaboration.

This suite offers omnichannel support for creating a convenient and cohesive work environment.

Why is Freshdesk Omni a better alternative?

• Includes bespoke email marketing campaigns, data encryption, and a mobile app for on-the-go communications
• Prioritizes customer service with 24/7 email support and 24/5 phone and chat for paid plans 
• It offers a free plan, which is missing in Intercom

Freshdesk Omni Pricing
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Monthly Plans

• Growth: €35/agent/month ($37)
• Pro: €83/agent/month ($89)
• Enterprise: €131/agent/month ($141)

Annual plans

• Growth: €29/agent/month ($31)
• Pro: €69/agent/month ($75)
• Enterprise: €109/agent/month ($117)

4.Twilio

Twilio consists of a set of application programming interfaces (APIs) that enable businesses to receive voice and video calls and send and receive SMS, WhatsApp, and email communications. It is built on a pay-as-you-go pricing model, and the Twilio API allows developers to integrate the tool into their applications easily.

Why is Twilio a better alternative?

• Highly scalable and viable for businesses of any size
• Offers a free trial, and pricing is based on feature usage
• Provides interactive audio and video options and a large database for analyzing customer data

Twilio Pricing:

• Free: $0
• Contact sales for a customized quote

5.Zendesk

Zendesk is a cloud-based customer support software offering a ticketing system for efficient organization and prioritization of support requests. It enables customer service agents to manage inquiries, issues and feedback through a user-friendly interface. 

Zendesk also features multi-language support, allowing businesses to cater to a worldwide customer base.

Why is Zendesk a better alternative?

• Zendesk offers 1500 no-code apps and integrations, while Intercom provides just over 450 integrations
• Offers a dedicated workforce management system and real-time and historical reporting
• Offers an omnichannel experience with an intelligent ticketing system and embedded call center software

Zendesk pricing:

• Support team: $19/agent/month, when billed annually
• Suite team: $55/agent/month, when billed annually
• Suite professional: $115/agent/month, when billed annually
• Suite enterprise: Talk to sales, when billed annually

Experience maximum ROI and true value for money with Plivo CX 

Despite the strengths of Intercom, the pricing and other downsides could signal startups and SMEs to switch to a more cost-effective and suitable option. 

Plivo CX steps in as a reliable alternative. You get to deliver remarkable customer service with the same features—that too at half the price! Plus, you don’t have to pay an additional price for basic features such as voice, SMS, and WhatsApp—all packed in our omnichannel packages.

Unlike Intercom, Plivo CX offers one-on-one onboarding and implementation support at no additional cost. It also includes pre-configured and custom integrations, while Intercom offers only pre-configured integrations.

Apart from budget-friendly pricing, Plivo CX offers these key features: 

• Unified agent desktop to provide effortless and omnichannel customer service across email, voice, SMS, WhatsApp, and live chat
• OpenAI-powered self-service chatbots to help users find solutions to complex queries independently and around the clock
• Integration with your existing tech stack, including homegrown systems, ERP, CRM, and helpdesk tools for a holistic view of customer data
• Drag-and-Drop Workflow builder to build automated customer journeys across all communication channels
• Metrics and Reporting to analyze customer interactions and collect feedback in real-time 
• Call recording, barge and whisper to coach your agents effectively  

Sounds interesting? Schedule a demo now!

It's interesting how SMS marketing still remains such a formidable tool. With all the new ways to communicate, like instant messaging apps and email, you'd think good old-fashioned texting would be a thing of the past. 

But it's still going strong.

Think about it: if you're putting together a marketing campaign and want to reach your customers directly, SMS is a fantastic option alongside your emails and social media posts. It's like getting a message right in your pocket! Plus, SMS marketing can be really cost-effective and deliver a great return on your investment.

But the question is, how do you ensure SMS can actually perform better than many other marketing channels? What are the leading benchmarks? And most importantly, what are some examples of successful campaigns where SMS marketing has held true to its promise? 

To answer such queries, we have compiled 40 SMS marketing statistics in this article. Let’s see what the numbers really tell us about SMS marketing. 

Widespread SMS marketing adoption rates

According to PwC’s Mobile Messaging Adoption Report 2021, businesses are preferring SMS marketing because it helps:

• Generate cash flow
• Reach out to customers promptly 
• Engage more customers 
• Reduce administrative burden and cut costs 

The same PwC report estimates the top industries that are increasing their spending and adoption rates:

Why are businesses adopting SMS marketing

As per a 2020 Infobip report titled How RCS is Redefining Business Communications, here is why businesses are adopting SMS marketing:

1. Answering customer questions: 58%
2. As a direct marketing channel: 57%
3. Cultivating customer loyalty: 47%
4. Building brand recognition: 46%
5. Distinguishing themselves from competitors: 40%
6. Building brand recognition: 46%
7. Cultivating customer loyalty: 47%
8. Distinguishing themselves from competitors: 40%

High engagement and open rates

As per SimpleTexting’s State of Texting and SMS Marketing 2023 study, 80% of consumers check their text notifications within five minutes, with 47% of GenZ customers checking once every 10-30 minutes. 

This results in high engagement and open rates for SMS marketing campaigns.

Text messages bypass email filters and are delivered directly to phones, which increases their chances of being read. Plus, the character limits make messages easier to skim while adding a personal touch with clear CTAs and offering timely updates.

Here is how open and response rates vary for text messages and emails:

1. Open rate: 98% (text messages) and 20-30% (emails) 
2. Click-through rate (CTR): 36% (text messages) and 19% (emails)

Here are some more SMS marketing statistics that highlight why businesses must choose text messages:

1. The average response time for text messages stands at 90 seconds.
2. 28% of younger customers prefer texting over other communication channels. 

3. 91% of consumers have opted for at least one brand’s SMS alerts.
4. SMS is a preferred communication channel for 52% of customers.
5. 90% of people read a text message within the first 3 minutes. 

SMS effectiveness in driving conversions

SMS marketing is perfect for limited-time offers, as users are more likely to open texts promptly than emails. Brands can also announce flash sales via SMS to create a sense of urgency and get quick engagement.

For example, e-commerce companies can send automated reminders to customers who have abandoned their carts. Restaurants can also notify their members of daily specials or appointment reminders.

This drives conversions as users are more likely to open text messages than emails. Let’s check out some statistics that illustrate this better: 

1. SMS marketing conversion rates reach as high as 25%.
2. Domino’s Pizza boosted its ROI not through video ads or TV but through SMS advertising. It cut down its CPC to 15 cents.
3. According to an Omnisend report, the conversion rate for email marketing was 0.07%, and for SMS, it was 0.28%. This indicates that SMS marketing has a conversion rate four times higher than that of email marketing.
4. SMS accounts for 26% of all SMS orders from just 13% of sends, showing that SMS marketing drives superior sales growth.
5. US customers who opt-in for brand SMS messages are 87% more likely to purchase. 

Personalization and customer experience

Based on past interactions, you can send customized messages that include customer names, order details, and recommendations. This is achieved when you segment the audience based on demographics, purchase history, and behavior. 

Such segmentation helps you personalize text messages and improve engagement and conversion rates. 

For instance, you can personalize messages for birthday greetings, special campaigns, specific preferences, and reminders for abandoned carts. This approach not only makes customers feel valued but also builds a stronger connection with the brand, ultimately driving loyalty and sales.

1. 91% of consumers are more likely to interact with brands when they provide personalized offers and recommendations.
2. 34% of consumers become annoyed by SMS messages irrelevant to their needs and interests.
3. Half (50%) of customers want to receive incentives or coupons when opting in for SMS messages.
4. 90% of customers are more likely to make a purchase if SMS is personalized. 
5. 31% of consumers sign up for SMS marketing for more personalized SMS messages, such as to receive birthday, anniversary, and other special day discounts
6. 60% of US consumers prefer digital coupons to traditional paper coupons.
7. Sending too many irrelevant marketing messages can drive customers away. 47% of customers found such texts annoying, and 28% stopped using the brand.
8. 53% of customers unsubscribe when they receive no-purpose SMS messages from brands and 46% unsubscribe when messages from brands are about products they aren’t interested in.
9. 15% of customers want to receive reward points for making purchases. 
10. According to Validity Research data, messaging too frequently (49%), duplicate messages (29%), or messages sent at inappropriate times (17%) reduces customer experience, making them 58% likely to unsubscribe from SMS messages from the brand. 

Transactional SMS: building customer trust

By providing real-time updates and confirmations, you can reduce some customers' purchase-related anxiety. These updates could be security alerts or even password reset codes. 

This addresses common customer concerns and prevents them before they arise. Such personal messages improve customers’ trust in the brand. 

Transactional SMS efforts perfectly complement marketing efforts by sending quick reminders for upcoming events or loyalty program updates. The main aim is to ensure customers feel valued and connected to the brand at every stage of their journey.

As per this report, here are the top 5 SMS marketing statistics:

1. 64% of consumers want to receive more delivery confirmation SMS messages.
2. 60% of customers want to receive text messages about product shipment confirmations.
3. 50% of consumers confirmed that they would also like to receive order confirmations.
4. 29% of customers want to receive SMS updates about loyalty programs and benefits.
5. 30% of consumers would like to receive back-in-stock notifications, and another 17% wanted  reminders about items left in their carts 

Let’s go over some more SMS marketing statistics that show consumer behavior towards transactional SMS:

1. 58% of consumers subscribe to SMS marketing to receive transactional updates.
2. More than 90% of customers expect a response within a day when they reach out.
3. 41% of customers sign up for SMS messages to receive shipping notifications.

SMS marketing and customer retention

SMS is also a smart tool for customer retention. You can send early access to promotions, new product updates, and exclusive offers, keeping your loyal customers engaged. You can strengthen this connection further through quick feedback requests and personalized recommendations.

Such regular updates keep the brand at the top of mind and help maintain long-lasting customer relationships while encouraging repeat purchases. Here are some SMS marketing data you must know

1. 58% of marketers see a noticeable impact on customer re-engagement and retention after adopting SMS marketing. 
2. 56% of customers were instantly reminded about the brand they forgot due to an SMS message they received.
3. 79% of marketers utilize SMS to retain their customers.
4. 35% of consumers subscribe to SMS to make purchases during sales.
5. Sharing SMS messages on products the consumer is interested in makes 57% of consumers less likely to unsubscribe.

Reach your customers right when it matters with Plivo CX

As an omnichannel customer engagement tool, Plivo CX provides an SMS marketing platform that integrates with Shopify. This allows you to leverage customer data to create targeted, personalized campaigns that drive engagement and revenue. 

Here are some key things Plivo CX can do for SMS marketing:

Targeted SMS campaigns

• Leverage first-party data from your Shopify store to run targeted SMS campaigns
• Create campaigns tailored specifically for each user based on their profile details and event data
• Use AI assistance to write audience-specific content that inspires action

Customer engagement

• Delight first-time sign-ups with warm welcomes and exclusive discounts
• Re-engage current customers with personalized promotions, restock notifications, back-in-stock alerts, reward program updates, and more
• Proactively interact with users through SMS workflows to drive engagement, upsells, and repeat purchases

Abandoned cart recovery

• Recover abandoned carts by leveraging browsing activity data

Rapid campaign creation

• Set up high-impact SMS campaigns in seconds, perfect for flash sales or time-sensitive promotions
• Easily connect to your Shopify store and sync contacts, key data points, and Contact Properties

Analytics and optimization

• Get detailed analytics on ROI, revenue generated, and conversion rates to continually optimize campaign performance

Secure and reliable messaging

• Securely deliver each message on time every time
• It is GDPR compliant, 10DLC compliant, and SOC2 certified
  

To learn more, schedule a demo now!

Customers today have high expectations: proactive service, personalized interactions, consistent experiences across channels, etc. In fact, Salesforce found that 80% of customers value the overall experience as much as the product itself.

So, how do you deliver the expected levels of customer experience?

Sure, you can hire more people and train them to provide better customer support, but this increases costs in the long run. Plus, you cannot overrule human errors.

An AI customer service chatbot is the solution to overcoming these limitations. They are available 24/7, offering personalized interactions, consistent service across channels, and scalable support while reducing costs and errors.

This blog post discusses AI chatbots for customer service, their types, benefits, and best practices to help you get started. We also explore the key chatbot features you should look for and highlight how Plivo CX can help.

What is an AI chatbot? 

An AI customer service chatbot is a computer program designed to simulate conversations with humans. These intelligent chatbots leverage NLP and ML algorithms to understand customer queries better, initiate human-like conversations, and offer appropriate responses.

From basic questions like "What's the price of this product?" to complex queries like "Can you help me choose the best moisturizer for my skin type?" you can use these chatbots to engage users and guide them to the next step in the sales process. 

What sets AI chatbots apart is their ability to go beyond pre-programmed responses and generate human-like answers using large language models and semantic understanding. They can even complete tasks and guide users through the sales process. 

The best part? You can create an AI customer service bot to work seamlessly across different platforms, including apps, websites, social media, and messaging services.

Key features to look for in an AI customer service chatbot

Zendesk’s CX Trends 2024 report shows that 83% of CX leaders using generative AI and evolved chatbots report positive ROI. However, due to the abundance of AI-powered chatbots in the market, choosing the right chatbot platform is not quite easy. Look for these key features before selecting the best AI chatbots for customer service: 

• Omnichannel support: An AI support chatbot that can help you serve customers across multiple channels—websites, email, social media, SMS, live chat, and messaging platforms. It helps you meet customers at their most-used channels and provide a consistent brand experience

• Live chat handover: Live chat tools should seamlessly transfer complex queries to human agents, ensuring customers receive the specialized support they need

• Data security: AI customer service chatbots must prioritize data security. This requires robust protocols like end-to-end encryption, secure data transfer (HTTPS and SSL/TLS), and strong encryption for stored data (AES-256).
  Also, RBAC, regular security audits, and penetration testing are essential.
  
  Chatbots should minimize data collection, implement strict data retention policies, and comply with regulations like GDPR and CCPA. Transparency about data usage and user control are also required.

• Reporting and analytics: An AI customer support chatbot platform with advanced reporting and analytics tools helps you track customer behavior, chatbot performance, and conversational flows to understand how effective it is in improving customer experience 

• Multilingual capabilities: Multilingual customer support helps you expand your business and cater to diverse audiences across the globe

• Integration: A chatbot that can integrate with CRMs, supplier databases, inventory management systems, help desks, and knowledge bases can easily get a unified view of customer data and provide instant responses

• Customization and branding: Look for AI chatbots that allow you to customize the user interface, tone, and personality to align with your brand identity
  
  
• Scalability: As your business grows, the chatbot should be able to handle increasing volumes of customer interactions without compromising performance
  
  
• Knowledge base integration: Tools that can integrate with your existing knowledge base can provide instant, accurate answers
  
  
• Sentiment analysis: AI chatbots with sentiment analysis capabilities can detect and respond to customer emotions, allowing them to provide empathetic support

Benefits of AI chatbot for customer service

According to an Ipsos report, 68% of consumers have used a customer service chatbot. As we delve into the benefits of AI chatbots, it becomes evident that they offer a multitude of advantages that can significantly improve the customer service experience, such as:

• More efficiency: AI chatbots relieve your agents of repetitive tasks like answering simple queries, routing and categorizing customer issues, collecting feedback, and scheduling appointments. An IBM report states that chatbots can resolve up to 80% of routine customer inquiries.
  
  The result? They can save time and concentrate on more productive and strategic tasks, improving the overall efficiency of the business

• 24/7 availability: Looking to expand your business across countries and planning to hire support agents to work in shifts? Instead of employing agents in different shifts, you can utilize an AI customer service bot to offer 24/7 customer support and solve customer issues across different time zones without any hassle
  
  
• Reduced operational costs: With an AI customer service chatbot, you can maintain the same number of agents while scaling your business as they decrease the reliance on humans to handle multiple customer service queries, reducing operational expenses. Invesp notes that AI chatbots can reduce customer service costs by up to 30%

• Enhanced customer experience: Hubspot's research shows that 90% of customers rate immediate responses from businesses as an “important” or “very important” factor when they have a customer service question. 

In this case, chatbots can take care of 30% of live chat communication. They can significantly improve customer experience by providing instant and more personalized responses. They provide personalized recommendations to customers as well 

Types of AI chatbots for customer service

AI chatbots for customer service solve different purposes according to your business needs and requirements. The three major types of AI customer service chatbots include:

1. Social media bots: AI-powered social media bots are built to integrate seamlessly with platforms like Facebook Messenger, Instagram DMs, Twitter/X, WhatsApp, and others. They can manage numerous customer conversations simultaneously and access customer data to provide more personalized responses

2. Support bots: Customer support bots leverage AI algorithms to interpret human conversations and respond to queries with relevant information, which reduces customer wait times 

‍Agent-assist bots: Often, agent-assist bots act more like ‘personal assistants’ for human customer support agents by automating tasks like onboarding, training, and collecting information from new support agents

10 tips for using AI customer service chatbots

According to Hubspot’s 2022 report, 90% of customers consider an immediate response to be "important or very important" when they have a customer service question.

 Implementing the best chatbot practices can help you achieve this and improve customer service. The following tips can help you maximize the use of AI chatbots:

1. Deliver personalized customer experience 

Personalized user experience improves customer centricity and gains users' trust.  AI chatbots help deliver a personalized customer experience by:

1. Analyzing data from diverse sources, including browsing history, purchasing patterns, previous interactions, and preferences, to understand users' preferences  and pain points and personalize product recommendations 
2. AI chatbots for customer service can also personalize conversations by using NLP algorithms, interpreting users' language to adjust its tone, and offering more empathetic responses to users

2. Use buttons to accelerate conversations 

Your customers don't always have to type it out entirely to express themselves. You can offer buttons with suggested responses for them to easily click and provide responses, ensuring a faster and more convenient experience. 

3. Disclose your AI chatbot 

Be transparent with your customers by letting them know they're talking with an AI customer service bot, not a real human support agent. This will set clear expectations for your customers and promote trust. 

For example, the chatbot can announce this at the beginning of the conversation with a statement, “Hi (customer name), I’m Mike, Company X’s AI-powered chatbot. How can I help you today?”

4. Escalate complex queries to human agents 

If you train it properly, an AI customer service bot can efficiently handle most of the complex queries. However, it can struggle during instances that demand critical thinking, deep reasoning, and multi-step problem-solving. 

In such cases, your chatbot must automatically transfer these complex queries to a dedicated team of human customer support agents to maintain a consistent customer experience.

Plus, you can train the chatbot to understand the user's sentiments, such as frustration and dissatisfaction, and include a feature that allows users to connect seamlessly with human agents.

5. Humanize the chatbot

If customers receive blunt responses from a salesperson in a brick-and-mortar store, they might feel disconnected from the brand. 

Similarly, answering customer queries with dull and robotic responses can make your customers feel unheard, misunderstood, and disconnected. This is why humanizing your AI customer service chatbot is critical to improving response rates and delivering a delightful customer experience. 

Here are some ways to humanize your chatbot:

• Give your chatbot a name, personality, and character to connect with your users and differentiate your bot from competitors
• Include images, GIFs, videos, and emojis in your chatbot's database, and train your bot to use these visual media appropriately 
• Choose the language and tone for your chatbot depending on your brand and target audience. It can range from formal, conversational, friendly, playful, and professional tone to answer queries according to the user's expectations 
• Integrate contextual memory and enable your chatbot to remember and refer back to previous interactions within the same conversation. This allows for more natural, flowing dialogue and demonstrates attentiveness
• Use conversational fillers like "hmm," "well," or "let's see" to make responses feel more natural and less robotic
• Implement advanced NLU to better interpret user intent
• Apply proactive engagement to allow the chatbot to initiate conversations based on user behavior, like offering help if a user seems stuck on a page

6. Train the AI chatbot 

Your AI chatbot for customer service is only as effective as it understands user queries and responds appropriately. Therefore, training and equipping your chatbot with the right knowledge bases and resources is critical to providing exceptional customer service. 

The ML model should include relevant and clean data, such as transcripts of customer-agent conversations and a history of customer queries. Let the chatbot study these interactions to analyze patterns, different queries, and human emotions to address user issues accurately.

7. Customize the chatbot 

Keeping your brand identity in mind, customize your chatbot with open-response or multi-choice questions, media elements, emojis, and design elements to enhance your brand image, hook audiences, and increase response rates. 

Additionally, you can program the chatbot to provide responses that are relevant to the user's current situation, such as their location, time of day, or recent actions on your website. 

Moreover, adapt your chatbot's appearance or responses for special occasions, holidays, or promotional events to keep the experience fresh and relevant.

8. Set up KPIs and metrics and analyze performance

How is your chatbot performing? Is it helping you achieve your customer support goals? To answer these, set up relevant KPIs and monitor them consistently to gain insights into customer satisfaction and improve the performance of your AI chatbots for customer service.

Some of the common KPIs that you can start measuring include: 

• Average resolution time
• Average handle time 
• Number of tickets 
• Number of resolved tickets
• CSAT
• Chat handoff 
• Daily conversation volumes 
• Bounce rate 
• Bot-to-human escalation time
• FCR rate
• Goal completion rate
• Cost per conversation

Track these metrics to make data-driven decisions and build strong relationships with your customers. 

9. Don't send huge walls of text

Don’t let your AI customer service chatbot respond to users with large blocks of text. This can overwhelm or frustrate users, pushing them to leave the site and switch to competitors. 

Break the text into simple and easy-to-digest sections to help your customers understand the context of the conversation and interact further. Add images or interactive elements to facilitate the narrative flow and illustrate solutions. 

10. Ensure customer data security and privacy 

Implement and follow stringent data protection measures while collecting, storing, and accessing customer data to ensure compliance with GDPR, SOC 2, and HIPAA regulations. 

You can also communicate your AI customer service bot’s data security measures with your customers to enhance trust. 

Real-life examples of AI chatbots in customer service

Now, let's explore the efficiency and ease that AI chatbots for customer service offer with two real-life examples. 

Dominos

‘Dom, The Pizza Chatbot’ by Domino’s offers customer support service in a humorous and conversational tone. It helps users order food, track their delivery status, and reorder via various messaging platforms such as Amazon Alexa, Facebook Messenger, and X. 

This chatbot has helped the brand improve customer engagement and satisfaction. 

Sephora 

Sephora is another brand that revolutionized the customer experience with an AI customer service chatbot. From providing personalized beauty product recommendations and matching virtual experiences with real ones to recognizing customers' faces and tracking facial elements, Sephora transformed its customer experience. 

Plivo CX AI chatbot overhauls customer service

Plivo CX's self-service chatbot, developed and powered by OpenAI, delivers exceptional omnichannel customer service for businesses of all sizes. The AI chatbot does the following:

• Resolves queries instantly: Acts as an AI-powered customer service agent, providing immediate answers and support
• Improves team efficiency: Handles simple inquiries automatically
• Offers 24/7 support: Is available around the clock to answer customer questions, even letting customers pause and resume conversations
• Provides consistent and on-brand support: Reflects your brand identity and adheres to your company's policies and guidelines
• Takes action: Can handle tasks like processing exchanges, updating information, and tracking orders
• Escalates seamlessly: Summarizes and passes complex issues to human agents when needed
• Easy to update: Can be quickly updated with new product info, promotions, or policy changes

Beyond chatbots, with a wide range of other features, Plivo CX’s omnichannel customer service platform efficiently handles huge volumes of customer queries and reduces the workload for human agents. These features include:

• Omnichannel capabilities: Unify, track, and manage customer conversations across channels, including email, voice, SMS, WhatsApp, and live chat
  
  
• Visual workflow builder: Create custom workflows  without coding and use automations using a simple drag-and-drop interface
  
  
• Streamline support: Plivo CX uses AI to prioritize urgent tickets, improving response times. It also ensures brand consistency by training AI agents to reflect your company's voice and policies
  
  
• Integration: The Plivo CX platform seamlessly integrates with your existing tools, such as homegrown systems, ERP, CRM, and helpdesk tools

• Real-time analytics: Analyze real-time customer interactions to identify loopholes and improve chatbot performance and service
  
  
• More productivity: Streamline agent workflows with message templates and internal notes, facilitating efficient conversation transfers and task management
  
  
• Agent coaching tools: Train your human support agents with features such as call recording, barge, and whisper to enhance human agent performance 

‍Book a demo to learn more.

How does it feel when a customer service rep doesn't get what you're saying, just gives you the same old responses, and makes you feel like you're talking to a brick wall? 

Frustrated, unheard, and angry—and ready to ditch the brand for an alternative. 

Worryingly, that’s exactly how your customers feel when you offer them generic customer service support. 

According to the latest data, 76% of consumers said receiving personalized communications was a key factor in prompting their consideration of a brand, and 78% said such content made them more likely to repurchase.

To help you capitalize on this trend, we discuss in this detailed guide how you can conveniently and strategically personalize your brand’s customer service further.

What is personalized customer service?

According to Salesforce data, 66% of customers expect brands to cater to their unique needs. In a nutshell, personalized customer service involves identifying, understanding, and uniquely addressing your customers' pain points based on their individual preferences and needs.

Here’s a breakdown of how this typically works:

Understand the full context of customers’ issues

Beyond the complaints customers have made, you should investigate their past purchase history, website behavior, and previous support interactions to uncover patterns and preferences.

For instance, a customer might prefer communicating through emails over calls or web chats. In this case, sticking to phone call resolution over their communication preference will result in a poor experience even if you solve the problem. 

As an all-in-one, omnichannel customer service platform, Plivo CX can offer your customers multiple alternative communication channels: email, voice, SMS, WhatsApp, and live chat.

Also, all of your business system is integrated to our Unified Agent Desktop, so you get a 360° view of customers’ issues and serve them accordingly without requiring to switch tabs.

Unique customers, tailored solutions

Based on the data from your research, you have to develop tailored solutions to each customer’s problem.

For instance, a three-year customer might not need much explanation or additional guidance besides the first call on how to renew a subscription. But new customers will need all the assistance they can get, including detailed guides, video instructions, pre- and post-follow-up calls, etc.

Salesforce also notes that customer loyalty depends heavily on how well a company understands its needs, for example, 70% of consumers. So, if you’re not personalizing, you’re missing out on significant sales revenue and high-value customers.

The benefits of personalized customer service

81% of customers want brands to know and understand more about them, including when to approach and when not to, where to approach, and how to approach when assisting. 

Here are a few reasons why this personalized customer service is important:

1. Improves customer satisfaction

While overall customer satisfaction has improved, your customers are raising the bar and demanding more from the brands they choose. For example, 91% of consumers are more inclined to shop with brands that provide relevant offers, demonstrating the power of targeted marketing.

By implementing a personalized approach to customer service and addressing your buyers’ needs with individualized attention, you can help them feel fulfilled and valued. 

This ultimately improves the satisfaction index and helps your customers find a positive experience.

2. Drive new sales and prevent drop-offs 

Personalization creates satisfied customers, who are more likely to become recurring customers. Interestingly, Forbes notes that 58% of consumers are willing to pay more for a better customer experience. 

Additionally, a Bain & Company report indicates that a high satisfaction rate translates into high retention rates. For example, increasing retention rates by just 5% boosts profits by 25-95%.

This, in turn, enhances marketing ROI and reduces CAC significantly.

3. Promotes brand loyalty

Unsurprisingly, personalized support experience results in higher brand loyalty. In a 2020 report by ConverSocial, 96% of customers say they’ve become more committed to a brand after a positive experience.

Committed customers stick longer with your business than other customers. Moreover, they are also good brand advocates and are 5.1x more likely to recommend your brand, according to a 2022 report by Qualtrics.

4. Builds supportive customer communities

When you provide individualized experiences to each customer, you make them feel heard and included in your entire work process. This approach fosters a sense of belonging and community, encouraging customers to engage with your brand and each other. 

As a result, you develop a loyal base of customers who feel invested in your brand's success and are more willing to assist other buyers. For example, 92% of customers are open to using a knowledge base, with 83% saying they would also use a community forum for help if it was available.

5. Increases engagement

Happy customers tend to engage more with brands. This includes opening promotional emails more often, responding to social media posts, participating in community forums, or even leaving a review after every positive experience. 

Increased engagement, in turn, fosters good customer-brand rapport, higher lifetime value, brand advocacy, and reduced CAC.

6. Enables competitive differentiation

Did you know, 73% of businesses providing a personalized customer experience perform financially better than competitors? They are often regarded as consumers’ favorites as well because:

• Customers are more likely to recommend you to their friends and families, thus becoming your best foot forward for gaining more prospects. This gives you a lead-acquisition edge over brands that are not doing the same.
• Positive reviews from previously satisfied customers enhance your overall reputation and can be leveraged to attract prospects who consider such reviews before interacting with a brand. 

According to Spiegel Research Center’s report, a minimum of 5 reviews on a landing page can increase conversions by up to 270%.

7 challenges to delivering personalized customer service

Despite the benefits, several challenges are lined up for marketers to deal with. 

For instance, Salesforce’s 2022 Customer Engagement Research report notes that while 88% of companies believe they deliver personalized customer experiences, only 60% of consumers feel they receive such a service, illustrating a notable "personalization gap."

Here are some major challenges you must know: 

1. High volumes of data

The more you know your customers, the easier it is to provide tailored service. Therefore, effective personalization relies on data—purchase history, browsing behavior, customer demographics, interaction records from customer support, feedback from surveys and reviews, etc. 

However, the voluminous nature of this information also presents difficulties, especially for companies lacking the appropriate tools for data collection, management, and use. 

Capital One reports that over 76% of organizations find it difficult to even understand the data they collect, and others say their company simply lacks the human talent to handle it.

2. Siloed data

Many businesses unwittingly hinder their personalization efforts by isolating customer support from other departments like sales, product, and marketing. This creates data silos, preventing valuable information from being shared across teams.

Think about it:

• Marketing gathers crucial insights into customer preferences, campaign engagement, and lead sources.
• Product teams track usage patterns, feature adoption, and feedback on product experiences.

So, there must be a synergy by connecting these dots and sharing data across departments.

3. Lack of organizational alignment

In a Salesforce study, 53% of customers say they’ve had to re-explain their complaints to different customer representatives of an organization, and another 55% feel like they’re communicating with different departments instead of one company. 

This happens when there’s no cohesive data management or agreement on deliveries, even within the same department.

4. Customer privacy concerns

Privacy concerns are becoming a significant barrier against data collection and usage. As PwC notes, while 63% of consumers would offer their data in exchange for personalized customer service, another 23% feel less comfortable.

Moreover, 67% of respondents in a Pew Research Center survey do not understand what companies do with their data, whereas 11% of respondents in ClearSale’s survey say they have abandoned an online purchase because they didn’t trust the site with their data. 

In resolving such concerns, it’s difficult to collect data and provide personalized customer service.

5. Outdated or incompatible technology

Legacy systems often lack the flexibility to integrate with modern tools, resulting in fragmented customer data spread across multiple platforms.

Additionally, outdated technology may not support automation, AI, or real-time data analysis, which are crucial for effective personalization.

6. Staff training

There's a significant disconnect between employee needs and employer-provided training. While 88% of staff report inadequate training for the apps they use, 35% of companies admit lacking the right learning materials.

This leaves the support team and other crucial departments scrambling with inadequate skills and knowledge to provide personalized customer service. Plus, the absence of a knowledge base could make this more difficult. 

7. Scalability issues

Personalized delivery means attending to each customer’s needs individually, not in groups. For a small-sized company, this might not pose an issue. But as you scale up to handle more entries, providing the same experience becomes much more complex. 

Manual processes also become bogus, inefficient and unsustainable, leading to slower response times and inconsistent customer service. Plus, you must handle a larger data volume as you scale.

8 tried-and-tested methods to deliver personalized customer service

Now that you have a heads up about possible challenges, here’s how to overcome them and deliver personalized customer service.

1. Leverage AI and automation for personalization at scale

As previously mentioned, scalability becomes a big headache when you deal with more data and humanly handle manual processes. To solve this, you must integrate AI-powered tools and automation into your workflow.

For instance, CRM systems can help aggregate customer data across departments and seamlessly analyze it for advanced personalization insights.

To take your customer service a notch higher, use all-in-one communication automation tools like Plivo CX, which comes with an AI self-service chatbot to deliver exceptional customer support around the clock. 

These AI-powered agents instantly address customer inquiries, leveraging your knowledge base and brand guidelines to provide accurate and consistent responses. They can handle various tasks, from answering questions to processing exchanges and tracking orders, freeing up your human agents to focus on more complex issues. 

With seamless escalation capabilities, AI agents can smoothly transition conversations to human agents when needed, providing full context and summaries for efficient resolution. 

Additionally, the chatbot is easily adaptable to new products, promotions, and policies, ensuring your customer support remains up-to-date and efficient.

Try Plivo CX’s visual workflow builder to create complex customer journey workflows without writing any code. You can easily connect components like actions, conditions, and triggers to automate various tasks and processes.

This makes it simple to design efficient workflows for routing inquiries, escalating issues, and sending automated responses, all while ensuring the right agents are handling the right tasks.

2. Extend omnichannel support 

A customer’s preference for communication channels makes up a significant portion of personalization. For instance, approximately 35% of customers prefer email as their primary customer service channel, especially among millennials. 

On the other hand, Gen Z consumers increasingly favor messaging and chat channels for real-time assistance, illustrating a shift toward digital, instant-response options across demographics. 

It’s, therefore, critical to offer omnichannel support. As noted before, Plivo CX’s true omnichannel platform helps you achieve this by enabling seamless switching between voice, AI-powered chatbots, SMS, email, and WhatsApp. 

Moreover, you can do all these things in the same tab without needing to switch. 

3. Humanize conversations using customers’ language

Over 74% of customers say they’re more likely to patronize a business if post-purchase customer support is offered in their language. Remember that the idea here is to localize, not just translate. 

Communicating with your customers in the language and style they prefer can help them feel understood. In this scenario, a multilingual solution like Plivo CX can help.

4. Use your customers’ names

It’s better to address each customer by name throughout the conversation, not just at the beginning. It will make them feel known and valued. 

Besides, personalizing with names reduces relationship barriers and makes communication easier. But don’t overdo it, either.

5. Harness customer data to further personalize interactions

How far you can personalize customer service depends on how well you know your customers. Dig out their previous interactions with your brand, past purchases, browsing behavior through consented cookies, and past complaints. 

You can also use surveys to collect details on how customers “would want you to serve them better” or what “things you need to fix in your customer service delivery.” 

Also, ensure your customers know what you’re doing with their data to minimize distrust. In this regard, Plivo CX meets the highest data security standards, with certifications like SOC 2, HIPAA, and GDPR.

6. Offer tailored and unique solutions to customer queries

Based on the data you collect, derive insights that will help you offer unique solutions to customers' problems. 

As we’ve noted, problems can be identical for two customers, but that doesn’t mean you can solve them the same way. 

So, identify their preferred communication channels—email, phone, in-person meetings, or social media—and ensure all interactions occur. 

Additionally, consider factors like their budget constraints, operational limitations, and the urgency of their problem. Pay attention to any previous interactions or complaints they've raised to predict what matters most to them.

7. Train agents on personalization methods

Provide training programs, self-paced or cohorts, with live practicals to help your in-house support team acquire essential soft personalization skills—empathizing, listening, and paying attention to details—and hard skills. 

Sometimes, your agents can get stuck on the call despite having received proper training. This is where Plivo CX’s live coaching voice feature comes in. While communicating with a customer, a more experienced and knowledgeable agent can “whisper” instructions to another agent to finetune personalized service delivery. 

And yes, all of this is done without the customer knowing.

8. Be proactive about customer service and request customer feedback

Don’t wait until your metrics drop. Use the data you have to figure out what your customers need and send the prompt even before they ask. Plivo CX’s proactive service feature helps you do just that.

Finally, hear from your customers before they take the news out. Ask about their experience interacting with you immediately after every communication. 

You can also send survey forms backed by an incentive to encourage participation. Then, use these insights to improve your delivery.

Deliver personalized customer service at scale with Plivo CX

Automation is at the heart of every scalable personalization. But finding the right tool to use can be daunting.

And that’s where Plivo CX comes in. Our award-winning omnichannel communication platform integrates, centralizes, and unifies all your communications on one dashboard. This way, you can elevate customer satisfaction, improve agent efficiency, and drive business growth. 

Here’s what we offer: 

• Unified communication: Manage all customer conversations across channels like email, voice, SMS, WhatsApp, and live chat from a single, agent-friendly platform.
• AI-powered automation: Deploy smart chatbots to handle routine inquiries, freeing up agents to focus on complex issues and personalized support.
• Effortless workflow design: Visually build custom workflows and automations with a drag-and-drop interface, no coding required.
• Seamless integrations: Connect Plivo CX with your existing tools, including CRM, ERP, helpdesk, and more.
• Data-driven optimization: Track real-time analytics and generate custom reports to gain insights into customer interactions and agent performance.
• AI-enhanced efficiency: Prioritize urgent tickets, ensure brand consistency, and adapt quickly to changes with AI-powered support.
• Rich communication: Enhance interactions with multimedia support, including images, videos, and documents.
• Increased productivity: Streamline workflows with message templates, internal notes, and skills-based routing.
• Comprehensive features: Leverage call recording, IVR, multi-language support, and robust security features for a complete solution.

‍Book a demo now!

Mailchimp is a popular marketing solution known for its generous free email marketing plan. It’s also extendable to SMS marketing. Whether you’re a small business owner or a growing enterprise, the tool offers a range of pricing plans. 

In this post, we will explore  MailChimp's pricing plans, find out if they’re right for your business, and identify if there’s any better alternative for your business. 

How much does Mailchimp cost?

Mailchimp has four different pricing plans:

• Free - up to a limit of 500 contacts
• Essentials - $13 per month for up to 500 contacts
• Standard - $20 per month for up to 500 contacts
• Premium - $350 per month for up to 10,000 contacts 

Mailchimp also offers SMS marketing as an add-on to  US, UK, Canada, and Australia users. However, you have to purchase additional monthly credits to send SMSes.

Mailchimp costs explained

Free

Mailchimp offers a decent free plan for independent business owners and solopreneurs who are just starting their email journey. In the Mailchimp free tier plan, you can:

• Add up to 500 contacts
• Send a max of 1,000 emails/month or 500 emails/day 
• Get initial email support for the first 30 days
• Run limited reporting and analytics

This free plan is limited to one user and does not allow segmentation. You can consider it the most basic plan perfect for beginners, enthusiasts, or hobbyists. 

Essentials

The Essentials plan is a notch above the Free plan, providing the following additional features:

• 24*7 email and chat support
• Option to create automated journeys
• Supports three users
• Set up to three unique audiences with custom tags, segments, and profiles   
• Supports custom branding
• Allows monthly email limit of up to 10x of your contacts for catering to a larger audience 

This plan is currently priced at $13 per month for up to 500 contacts.

Standard

Standard plans are still a better choice for small or medium-sized businesses, providing the following features that are better than the  Essentials plan:

• Allows five users
• Set up to five unique audiences with custom tags, segments, and profiles 
• Provides generative AI features to help you optimize campaigns and deliver more relevant content, faster  
• Allows dynamic content
• Supports behavioral targeting for campaigns

This plan is currently priced at $20 per month for up to 500 contacts.

Premium

The Premium plan, Mailchimp’s top-tier plan, is a fit for enterprise businesses as it allows unlimited users and sophisticated marketing tools and features.  Some of the best features of the Premium plan are:

• Unlimited users and unlimited audiences
• Migration support
• Dedicated onboarding
• Priority phone support

Mailchimp charges $350 per month for their Premium plan for up to 10,000 contacts.

Pay-as-you-go

Mailchimp also has a flexible pay-as-you-go plan where you can buy email credits if your email marketing usage is infrequent and you currently do not want to commit to a monthly plan. 

It comes with the same set of features as the Essentials plan. Each email you send costs one credit, so an email sent to 100 contacts costs 100 credits. However, there’s a catch — these credits expire after 12 months.

SMS marketing is also a pay-as-you-go option in Mailchimp where you have to buy additional credits to send SMS. 

Is Mailchimp the right solution for you?

Mailchimp is ideal for small businesses, marketers, and e-commerce websites that want to focus mainly on email marketing. 

However, for businesses seeking a  comprehensive AI-driven omnichannel platform to engage with their customers  across SMS, MMS, WhatsApp, and email, while driving customer acquisition and explosive revenue growth, Mailchimp may not be the right fit.

Plivo CX: Advanced omnichannel marketing done right

Plivo CX is an advanced omnichannel marketing solution that enables you to send marketing messages to your customers on their preferred communication channels: SMS and MMS, email , and WhatsApp. It works end to end with Shopify stores tracking marketing and customer service. 

The tool can triple your revenue and ensure seamless customer engagement through powerful, end-to-end email marketing.

Let’s look at the key features of Plivo CX Engage:

• Supported marketing channels: The platform helps you reach your customers across all channels — SMS/MMS, email,  and WhatsApp.
• Premium carrier network: Plivo CX leverages a premium carrier network by Plivo that lets you send personalized messages to 220+ countries and territories. These networks can effortlessly handle large volumes of messages, offering better SMS deliverability.With Plivo CX Engage, you can reduce your SMS marketing costs by up to 70%.

• Supported languages: English, Spanish, German, French, Italian, Japanese, Korean, Dutch, Portuguese, Russian, Chinese, Mandarin, Cantonese, Afrikaans.  
• Segmentation: Import contacts from various sources, such as e-commerce stores, landing pages, opt-in forms, and event triggers, or through APIs. Leverage a user-friendly segment builder to create targeted audience segments based on key attributes, enabling hyper focused messaging.
• Copywriter AI:  Generate messages on the go using Plivo’s AI assistant. You only have to set objectives for the campaign, including goals, parameters, timing, urgency, and voice, to get started. Scale your content production efficiently, enabling more personalized campaigns without the need for additional resources.
• Create campaigns quickly: You can launch campaigns in four easy steps:some text
  • Select your audience 
  • Choose your audience’s preferred channel 
  • Decide when to launch your campaign so as to maximize ROI
  • Craft your message, leverage suggested templates, or use Plivo CX’s AI Assist

With the ability to segment audiences effectively, you can ensure that your messages reach the right people at the right time, utilizing multi-channel delivery for maximum engagement. 

Additionally, measure campaign effectiveness and ROI through robust performance tracking.

• Integrations: You can integrate Plivo CX with your existing eCommerce tools mainly Shopify and BigCommerce (upcoming).
• Reporting: You get dashboards to view campaign performance and customer insights. 
• Compliance: Plivo CX also complies with data protection standards like GDPR and CCPA. 
• Journeys: The Journeys feature allows you to identify crucial customer actions to personalize messages and deliver time-sensitive messages to the right audience at the perfect moment.

 For more information, download a complete guide to SMS marketing.

Mailchimp Vs. Plivo CX: Quick comparison

Choose the best tool for your business

Based on the comparison, Mailchimp is ideal for small businesses targeting only email channels. 

On the other hand, Plivo CX is a more advanced solution suited for medium to enterprise-level businesses that require comprehensive omnichannel customer engagement across multiple channels.

Plivo CX excels in omnichannel communication, cost-effectiveness, advanced user journey automation, AI-powered copywriting, CRM integrations, analytics, and enhanced support — a strong choice for businesses focused on comprehensive customer engagement strategies beyond traditional email marketing.

Sign up for a free trial to see things in action.

FAQs

1. Is Mailchimp really free?

Mailchimp has a free plan that allows adding up to 500 contacts and sending emails with a daily limit of 500 and a monthly limit of 1,000.

2. What is the cheapest Mailchimp plan?

The cheapest Mailchimp plan is its Essentials plan, which is currently priced at $13 per month for up to 500 contacts. This plan also provides 24*7 email/chat support and an option to create automated journeys. 

3. How does Mailchimp calculate pricing?

The cost of Mailchimp depends on the number of contacts you store, the number of emails sent, and the features you want to use.

4. Can I change my Mailchimp plan later?

Yes, you can always upgrade to a higher plan or downgrade to a lower plan. There’s also an option to pause your subscription at any time. 

5. Is Mailchimp's pay-as-you-go option worth it?

Yes, the Mailchimp pay-as-you-go option is good if you occasionally send emails and currently do not want to subscribe to a monthly plan.

6. What is the difference between Mailchimp Essentials and Standard plans?

Mailchimp's Standard plan includes all the features in the Essentials plan. However, Mailchimp's Standard plan provides additional AI support and behavioral targeting features on top of the Essentials plan. 

7. How does Mailchimp handle unsubscribed contacts?

Mailchimp keeps unsubscribed contacts as part of your contact list. However, these contacts will not receive any marketing emails or SMS messages as they have opted out.

8. Does Mailchimp offer non-profit discounts?

Yes, Mailchimp offers a 15% discount for non-profit organizations. You can apply for a non-profit discount on Mailchimp fees on the billing page.

Recently, Klaviyo made a change in its pricing structure. Previously, charges were based on the volume of emails or SMS messages sent. But now, you have to pay based on the number of contacts in your email or SMS list. For businesses with larger lists, this could mean a big price jump. 

Additionally, Klaviyo offers a tiered pricing system. For instance, you'll pay a flat fee of $60 for 1,001-1,500 active profiles. This means whether you have 1,200 or 1,500 contacts, the cost remains the same. 

The pricing structure can feel unfair for smaller and mid-size businesses with growing or fluctuating contact lists. Many have seen significant cost increases as a result. In this blog post, we break down Klaviyo’s SMS pricing and explore whether  it’s still worth it–or if it’s time to switch. 

Klaviyo SMS pricing breakdown 

Klaviyo's SMS pricing is based on a credit-based system. You can use these SMS credits to send messages, and overall costs depend on the number of contacts and the message volume. 

Here's a breakdown of Klaviyo’s SMS pricing for different plans:

How  Klaviyo SMS credits work

• 1 SMS credit = 1 text message segment (up to 160 characters).
• 1 MMS credit = 1 multimedia message.
• Pricing decreases as you purchase more credits. For example, if you purchase 1,250 credits, the price per SMS will be $0.0120. But if you increase the credits to 12,500, the price per SMS will reduce to $0.0092. Similarly, the price per message decreases as you purchase more credits. 

Klaviyo SMS pricing is based on your contact list and message volume.

• The cost scales with the size of your contact list. For instance, 500 contacts starts at about  $35/month for email and SMS. 
• As your contact list grows, the price increases. For example, an email and SMS plan with up to 1,500 contacts starts at $60/month. 
• Klaviyo also includes carrier fees in their SMS pricing - $0.003. The pricing model is transparent, so there are no surprises or hidden charges.
• Based on where your audience is located—whether in the US, UK, or EU—different credits are allocated for each SMS sent. The longer your message, the more you're charged.

Klaviyo automatically selects a plan for you based on your active number of profiles, matching it with a plan that covers the corresponding number of sends. For example, if you have 100,000 profiles but only 50,000 are actively engaged, you might choose a 60,000 profile plan to account for occasional sends.

The problem? Most brands aren’t aware of this and stick with whatever plan Klaviyo assigns. So, next time you're in your billing section, double-check your plan—choosing the right one could save you thousands of dollars.

Klaviyo free plan

Ideal for: Small businesses owners or startups who want to test out Klaviyo’s SMS features without any financial commitment. 

Plan features:

• Up to 250 contacts for email
• 500 email sends per month
• 150 SMS/MMS credits included
• Free email support for the first 60 days​

500 emails per month isn’t bad for a new brand, but if you hit that limit early, you’re locked out for the rest of the month.

And those 150 SMS credits? They add up quickly. While it only takes one credit to reach a US contact, it could take five for the UK. Plus, some countries don’t support MMS, so you’ll need to be strategic with how and when you use your freebies.

Klaviyo email plan

Ideal for: Mid-sized e-commerce businesses who already have their feet on the ground and who primarily focus on email marketing because this plan  has only 150 free SMS credits. 

Plan features:

• Pricing starts at $20/month for up to 500 contacts.
• Offers 5,000 monthly  email sends and access to Klaviyo’s advanced segmentation and automation tools​. 
• Access to email and chat support
• Includes applicable SMS carrier fees

Klaviyo email and SMS plan

Ideal for: Businesses that want a fully integrated marketing system, including email and SMS. 

Plan features:

• Starts at $35/month for up to 500 contacts.
• You get 5,000 email sends and 150 free SMS credits
• Includes SMS carrier fees
• Access to email and chat support 

How Klaviyo’s SMS pricing adds up

Klaviyo's SMS pricing starts off generously with a free plan so you can test the waters with up to 250 active profiles. You can send 150 SMS/MMS messages per month and manage up to 250 active profiles without any cost. 

But as your contact list grows and exceeds 250 profiles even by one contact, you'll need to switch to a paid plan starting at $35/month for email and SMS.

From here, Klaviyo’s SMS pricing increases based on the number of contacts and the volume of messages. 

Klaviyo SMS pricing estimation:

The email and SMS pricing above is based on 1,250 base SMS/MMS credits a month. On top of these baseline prices, you also need to monitor your SMS credit usage. If you exceed the included number of credits, additional charges may apply.

Is Klaviyo’s price worth it?

Although Klaviyo offers robust email and SMS marketing tools tailored for e-commerce, is its pricing justified? Let’s take a look at the pros and cons of Klaviyo’s SMS pricing structure. 

Pros of Klaviyo’s pricing: 

1. A free plan: Klaviyo provides a free plan that helps smaller businesses try out SMS marketing without the risk of loss. 
2. All-in-one solution: You get email, SMS, and MMS marketing in one platform so it’s easy to manage customer interactions across channels. (Source)
3. Scalable: Klaviyo SMS pricing grows with your business so you can start with the free plan and upgrade as needed. 
4. Advanced segmentation and analytics: In paid plans, you get Klaviyo's ability to offer highly detailed audience segmentation and comprehensive analytics. So, you can tailor marketing campaigns to specific audiences and drive higher conversion rates​ which drives a higher ROI. (Source)

Cons of Klaviyo’s pricing:

• High learning curve: Although Klaviyo is powerful, some users feel that it has a steeper learning curve due to the range of features and integrations, which may require additional resources to master. (Source) 
• Confusing price structure: Pricing structure is confusing for some users. The plan auto upgrades after hitting a certain amount of sends, but then users are also charged based on the number of active profiles. Charging per send would be easier for most customers to manage. (Source)
• Pricing is higher for some regions: Credits for brands outside of the US are about 2x more expensive which may not be suitable for global businesses. (Source)
• More affordable options available: Klaviyo’s SMS pricing isn’t the most competitive. For new e-commerce brands, there are better options out there.  (Source)
• Customer support and onboarding: Some G2 users feel Klaviyo’s customer service team is not very responsive and offers limited support even during emergencies. (Source)  

How Klaviyo pricing compares to Plivo CX Engage’s pricing

Klaviyo and Plivo CX Engage share many of the same SMS marketing capabilities, but their pricing structures differ based on usage, features, and audience size. 

Here’s a detailed comparison to help you decide which might be a better fit for your business.

Plivo CX SMS pricing overview

Plivo CX offers a pay-as-you-go model.  Plivo CX Engage’s pricing for SMS is based on a per-message rate rather than a tiered contact list size like Klaviyo. So, you pay for a set number of messages and avoid overpaying for unused credits.

This way, you know exactly how much you're paying per message, providing clarity and control over your budget.

It works well for businesses that want to scale their SMS marketing based on real-time demand. For example, if you have 500 active profiles today, you pay for those. Your payment only increases if your contacts increase. 

Here’s a breakdown of Plivo CX’s SMS pricing:

• Pricing: Plivo CX charges $0.0065 per SMS in the US, and $0.0380 per SMS in the UK. 

• Carrier fees: Similar to Klaviyo, Plivo CX also includes carrier fees in its pricing, which keeps things transparent. But, Plivo CX does not offer bundled SMS credits as Klaviyo does in its plans. 

Here’s a table explaining how Klaviyo's pricing differs from Plivo CX’s pricing:

Additional benefits you get over Klaviyo

1. Premium carrier network 

Plivo CX leverages a premium carrier network by Plivo that lets you send personalized messages to 220+ countries and territories. These networks can effortlessly handle large volumes of messages, reducing the likelihood of failed message deliveries. 

Plivo CX Engage can help you reduce your SMS marketing costs by up to 70%, and you get a 100% secure network to handle sensitive conversations. 

2. Journeys

Using the Journeys feature in Plivo CX, you can trigger personalized and time-sensitive messages to the right customer at the right time based on a customer’s activity. 

For example, if someone abandons their cart, it triggers an abandoned cart message. If someone makes a purchase for the first time, it triggers a “Thank You” message. 

With Journeys, you’re in control of when you want to trigger these messages. For example, you set a “Thank You” message trigger for 7 days after fulfilment is created. 

The best part? You can build these Journeys easily with a no-code workflow builder and send the messages to the right customer at the right time. 

3.Reports

Plivo CX provides insightful performance reports for each of your campaigns. You get information about key metrics such as messages sent, delivered, opened, clicked, and converted. With these reports, you can easily measure the ROI of your SMS marketing campaigns. 

4. AI engine

In Plivo CX, you get access to Copywriter AI that helps you craft personalized messages for your customers. All you have to do is mention your goals, parameters, tone, urgency, and timing of the message and the AI tool creates impactful messages instantly for various customer segments. 

You also get 3-4 options of SMS copy to choose from. So, you can pick the best one and fine-tune it based on your preference.    

5. One-click migration from major competitors

If you’re using another SMS marketing platform right now, you can easily switch to Plivo CX in one click.

Plivo CX: A better alternative to Klaviyo 

Klaviyo's switch to per-contact pricing has made it less appealing for many businesses, especially those with large email lists. Although it still offers strong features, the costs can quickly add up as your list expands.

Plivo CX offers a compelling alternative to Klaviyo in terms of pricing and benefits. First, you get a per-message pricing model that’s  transparent and fits the needs of any e-commerce business–big or small. 

The platform's pay-as-you-go model offers more flexibility for businesses with fluctuating SMS volumes.

With its premium carrier network, Plivo CX ensures high deliverability rates and global reach. In addition, Plivo CX’s robust suite of tools helps you automate your whole SMS marketing workflow. You get:

• Audiences: Sync your Shopify contacts with Plivo and segment them based on static and dynamic lists and unlimited rules. 
• Journeys: Trigger messages based on events and customer actions so each message is personalized. 
• Copywriter AI:  Craft  engaging messages for the right customer at the right time, tailored to your goals, brand tone, or urgency level 
• Campaigns: Easily manage and execute large-scale SMS campaigns with Plivo CX’s user-friendly interface
• Channels: Reach customers on their preferred channels, including SMS, MMS, and email, so that your brand stays top of mind and customers are more likely to convert.

While Klaviyo has its strengths, Plivo CX's reliable infrastructure and scalable pricing is not only affordable but also provides 3X ROI on your SMS marketing campaigns.

‍Sign up to Plivo CX today to learn more.