Should You Use a Short Code to Send Text Messages?

Businesses send out text messages for many reasons: customer notifications, marketing, security alerts.

As businesses grow, messaging volumes tend to grow too. A solution that was cost-effective for a smaller business might not be the best fit for one that’s grown.

Most businesses send their first text messages via regular phone numbers. These long codes are inexpensive to lease. How inexpensive? To compare cost options, we used pricing from cloud communications provider Plivo’s SMS API platform.

With Plivo, each long code number costs only 50 cents a month. Per-message costs are also low — half a penny for each SMS message sent, and no charge for SMS messages received. (You can also use long codes for MMS messaging, which have different per-message charges.)

In the US, any long code number used to be fine for texting, but starting in 2021 mobile network operators (MNO) began requiring businesses to register their brands and campaigns (use cases) before they associate their 10-digit long codes (10DLC) with them. Fortunately, one-time 10DLC registration charges are inexpensive, as are the monthly fees for campaigns.

10DLC users can also spend $40 to have their brands vetted for higher throughput — up to 4,500 transactions per minute (TPM). That works out to 75 messages per second, which sounds like a high rate at which to send texts, but some businesses send out millions of messages a day — think of a company that sends one-time passcodes for two-factor authentication — and long code throughput rates may be too low.

The Case for Short Codes

That’s where short codes show their worth. These five- or six-digit numbers were designed for text messaging, and they offer the highest possible throughput for messaging — 33% higher than 10DLC. Each individual message is also less expensive to send than long code texts — $0.0045 vs. $0.0050 for US customers — and carrier surcharges are lower.

Short codes have more advantages than price. Businesses can use a single short code number for a whole country — no need to get numbers with familiar area codes.

They can also obtain a vanity short code that maps to their business or product name. For example, 7-Eleven uses 711711, while the San Jose Sharks hockey team uses 742757, which is SHARKS on the phone keypad. A vanity short code makes it easy for people to remember how to contact your business.

That’s the good news. The bad news is that obtaining and leasing short codes costs a lot more than long codes. There’s a high one-time setup fee, plus monthly leasing costs of $500 or more. And where long codes can be provisioned immediately, short codes can take weeks to go through an approval process.

Calculating Cost-Effectiveness

When does it make economic sense to migrate from long codes to short codes?

To see which number type makes the most sense for your business, go over a past bill and see how many SMS and MMS messages you sent and received. Price out the total costs for each kind of message, then see what they’d be if you switched number types.

For example, suppose your business sends out 1.25 million SMS messages every month and receives 50,000. Here’s a table that adds up per-message and monthly line rental costs for a single number of each type.

This is just a back-of-the-envelope calculation. It’s not an accurate reflection of real-world costs because it leaves carrier surcharges out of the cost equation.

When a message comes from or goes to an end user, the user’s carrier takes a little money for sending or delivering the message. Carrier surcharges vary by number type, carrier, and the type of message: SMS or MMS, sending or receiving.

You can get a more accurate estimate in your calculations by factoring in not only the messaging volume but also the carrier surcharges from a recent bill.

As a general rule, if most of your texting involves sending SMS messages and you send more than a million messages a month, you should consider acquiring a short code number from which to send them.

Actually, you might not need to do this calculation. If long code or 10DLC throughput capacities can’t meet your needs, short codes are probably a better alternative.

Cost Isn’t Everything

If you decide that a short code would be a good fit for your business’s texting needs, your next decision is what communications provider you should lease it from.

Nowadays, most businesses use cloud communications platforms that provide APIs that let businesses integrate texting and voice calling capabilities into their applications.

Even though we just looked at how to cost outnumber type alternatives, price isn’t the only consideration you should use when you choose a communication platform as a service (CPaaS).

Factors such as reliability, coverage of all the geographic areas in which you do business, a robust API, and top-notch documentation and support are worth paying for.

Ask a peer what platform they’re satisfied with, or visit an independent peer-review site like G2, which shows how satisfied other businesses are with their choices.

If you can find a reliable CPaaS that’s highly rated by its customers and less expensive than its competitors, you’ve found your new short code provider.