In-app chat vs. text: which is better for your business?

Sara Ana Cemazar
January 5, 2023
min read

Communication plays a crucial role in building long-term relations with clients. Businesses have multiple ways of communicating with their clients, including voice calls, messages, and emails. Among all channels, messaging is becoming increasingly popular due to its directness, ease, and comfort.

However, when discussing about their communication channels, many businesses have a dilemma regarding chat vs. SMS. Business administrators focus on reaching a bigger audience with minimum spending on communication resources. Hence, it is crucial to analyze the best medium for client communication.

You must have observed the increasing number of apps/websites that send push messages or offer in-chat support. But there is a significant difference between chat messages and text messages as SMS and chat broadly differ in user experience and compliance with rules and regulations.

This article explores which medium is better – chat or SMS- and their benefits and challenges, analyzing whether you should implement in-app communication or stick with SMS texting. But, let's start at the beginning..

Text vs. chat: what's the difference?

Text and chat are often used as interchangeable terms. What they refer to is, however, different!

In the simplest terms, text is a synonym for an SMS message, delivered to a phone that doesn't even have to have internet access. Businesses use text messages to let their customers know that an important delivery is coming, their order has been confirmed, or there has been a delay. While useful, (SMS) texting in this context is one-sided.

On the other hand, chat refers to two-way conversation between two (or more) parties. In business communication, this means that the customer can reply back or even initiate the conversation on the website via live chat, or within the app via in-app chat.

Let's dive into a more detailed explanation below.

The basics of texting

In simple terms, sending a text message from one device to another is considered texting. It began almost 29 years ago when the short message service (SMS) was the first available peer-to-peer messaging service. An SMS can send text-only messages between phones. It gained massive popularity after 1992, reaching about 3.5 billion active users by the end of 2010.

Presently, SMS-Cell broadcast allows messages to be shared (advertising, public information, etc.) with all mobile users in a specific geographical area. Businesses can leverage SMS for both transactional and promotional messaging.

With the rise of social media, texting has evolved to web texting that uses internet services. These services are mainly offered through instant messaging and social media platforms, such as WhatsApp, Telegram, Viber, etc. 

Benefits of SMS texting

chat vs text

Text messaging can add tremendous value to an organization's advertising portfolio. 

Here are some benefits of SMS texting:

1. Increased revenue via promotional messages

A study revealed that nearly 50% of users who make a purchase react to a promotional message urging them to take action via CTAs sent through text messages.

2. Preferred channel of customers

Another study shows that 48% of consumers prefer SMS messages, 22% prefer emails, 20% prefer app notifications, and only 8% prefer direct mail.

3. Minimal response time

SMS has a much lesser response time than other communication channels, as most people have phones with them at all times. The average response time for an email is 90 minutes, whereas for text messages, it is only 1.5 minutes.

4. Higher response rate

SMS messages have a response rate of 45%, whereas emails have a response rate of only 6%. Although emails & SMS, and chat messages can contain links to your website, 19% of such links are visited through SMS messages and only 2% via emails.

Disadvantages of texting

Texting has been around for a long time. However,  it has some challenges and limitations.

1. Size limit

The biggest disadvantage of SMS messages is that they can only contain up to 160 characters. If the size of your message exceeds this limit, your message will be broken down into parts.

2. Carrier charges

Although they have proven benefits, text messages clearly lose in chat vs. text debate when comparing upfront communication costs. Standard rates are charged for sending SMS messages to the company and the client.

3. Bland user experience (UX)

The users must open a dedicated app to access text messages. It is often crammed with marketing SMSes from unknown numbers resembling spam. Additionally, the texting experience is one-sided, with bare-minimum features and a disjointed UX. Also, SMS does not support group conversations and only allows one-on-one communication.

4. Devoid of rich media

SMS messages do not support photos, videos, voice, etc. They only support text characters. Rich media is an integral part of marketing today, and without any media, the messages are not as captivating as they should be when comparing chat vs. text.

5. Outdated experience

Since SMS has been around for about 30 years and the technology has not changed drastically, it feels dull and gray. People usually prefer colorful emails with infographics or chat messages with GIFs over black-and-white text due to their aesthetic appeal.

What is in-app chat?

Many applications enable one-on-one or group conversations within their apps, creating a private and secure environment for individual correspondence. The messages shared in these apps are called chat messages.

However, in-app chat should not be confused with chatting over Facebook Messenger, Instagram direct messages, and WhatsApp. In-app chat is a chat interface that appears within an app that usually has separate purpose. Think about any app that enables you to open a chat window, usually located at the right bottom corner of the screen.

Apps that incorporate chat usually also white-label it to adjust it to their brand.

To use a chat inside the app, you only need internet connection, Wi-Fi, or mobile data, to use the in-app chat facility. When it comes to chat vs. text comparison, chat messages do provide a more engaging and feature-rich experience to the users.

In-app chat also has an exciting feature – push notifications – that is highly efficient in boosting engagement and user retention. People can get notified if there is an update and also get a quick overview of the message contents, including the rich media elements.

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Why is in-app messaging becoming more popular?

86% of customers are ready to pay more for outstanding customer experience, which can be fulfilled by in-app messaging. Thus, it is considered a lucrative alternative for businesses and customers, surpassing emails and text in popularity.

Let’s explore 5 key benefits of the in-app chat:

1. Improved customer experience and engagement

In-app chat messages drive traffic to your app and increase retention by enabling peer-to-peer and group communication with multi-media sharing and instant messaging. Thus, in-app chat can also help build a sense of community among users and compel them to return. Additionally, push notifications capture users' attention by alerting them about recent updates and offers.

2. Automated responses

AI-enabled chatbots can be integrated into applications to provide 24x7 customer service and solve basic queries instantly. 

chat vs text

Canned responses are enabling customers to solve their own issues by directing them to knowledge base, or rerouting more complex problems to live agents.

3. Providing optimal user experience

Today’s marketplace is saturated with numerous alternatives; to stand out and retain customers, you must focus on providing an unparalleled user experience. In-app chat strives for it, adding convenience as users don’t need to leave the app to talk to other users or get their issues resolved.

4. Personalization

In-app chat gives you loads of personalization options. You have contextual information about users, meaning you know what they're spending their time at, what they have purchased, or any other actions they did inside the app. This gives businesses the power to send personalized messages in form of reminders, promotional activities, and other.

➡️ Check out the best examples of engaging users via in-app messaging.

5. Compliant with data privacy regulations

End-to-end encryption, on-premise deployment, and other features can be a part of an in-app chat. HIPAA or GDPR compliant in-app chats do exist, while SMS, email and other forms of communication with customers rarely hold up to high data privacy standards in highly-regulated industries.

If an organization is privacy-conscious, it should be looking into acquiring an in-app chat that matches their security criteria.

Potential challenges of in-app chat

Despite their benefits, in-app chats are not perfect. Here's what you must be mindful of when implementing one.

1. Chatbot communication

When issues are complex, people wish to talk with a human agent rather than explain the situation to a chatbot. Moreover, chatbots are not as efficient in understanding the subtle nuances and emotions as human agents, which might lead to customer escalation.

However, people are also more keen than ever to solve their own problems. With clever chatbot algorithms, you can avoid the disadvantages of chatbots, and instead use them to solve simpler problems, while rerouting more complex issues to agents.

2. Connection limitations

Since chat messages are sent over the internet, it is impossible to reach customers when they are offline through in-app chats. This might lead to unnecessary misunderstandings and query resolution delays, resulting in a dissatisfied customer.

Final verdict – chat vs. text: who is the winner?

Businesses that wish to keep up with the trends, increase customer engagement, and offer a superb user experience should onboard in-app chat. However, the age of SMS is far from over.

For example, in the eCommerce market space, you can send promotional messages, order confirmation, shipping, and other information through in-app chat. Additionally, SMS can be used to send delivery information, in addition to the push notification.

When comparing in-app chat vs. text messages, you must also consider that both formats use different technologies, and their benefits may sometimes overlap. Experiment with both formats and see which suits your business needs the best.

If you can’t find the right balance with SMS or existing chat, you can also build a customized messaging experience for your customers with the help of Rocket.Chat. As a CX-focused open-source communication platform with a user base across 150+ countries, we offer scalability, collaboration, and personalization- all from a single platform.

Talk to an expert to find out how our Chat Engine could fit into your app or product.

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Sara is an SEO Strategist at Rocket.Chat. She is passionate about topics around digital transformation, workplace experience, open source, and data privacy and security.
Sara Ana Cemazar
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