Complete Guide with Tips and Examples


What are SMS Chatbots?

SMS chatbots are automated computer systems that communicate via text messages. A marriage of automation and convenience, this handy tool can help boost business communication. If not done correctly, it can quickly turn the SMS Chatbot channel into an insincere and robotic answering machine. 

This guide will cover benefits, tips, best practices, and examples of successful SMS chatbot communications. 

sms chatbots

Three Types of Chatbots

There are three types of chatbots – simple, smart, and hybrid. 

  1. A rule-based and task-specific bot simply follows a preprogrammed decision tree. That is how the bot understands the information it receives. It then directs the user toward a specific outcome. The way simple bots work resembles a multiple-choice test. The simple chatbot cannot make decisions outside its preprogrammed line of questions and answers. 
  2. A smart bot, on the other hand, learns from the interactions it performs. It tries to mimic a human-to-human conversation. This type of bot uses natural language processing (NLP) technology to understand text typed by a human. These bots are more of an open-ended essay test. They are the closest thing to Artificial Intelligence (AI) we have today. True AI does not yet exist. 
  3. A hybrid bot is a combination of smart and simple chatbots. They can recognize a typed message as well as offer choices for the visitor to select. 

Web vs. SMS Chatbots

SMS Chatbot technology closely relates to a web or browser-based chatbot. It does, however, have some significant limitations worth noting.

  • SMS chatbots must refrain from sending long messages (160 characters max.)
  • Complicated or long customer replies can confuse the bot. Customer answers must be short.  
  • SMS Chatbots lack the vitality and interactive nature of web chatbots. They do not offer interactive form fill, inline JavaScript execution, and in-line input validation.
  • SMS Chatbots are not PCI or HIPAA-compliant, so customers and agents cannot exchange private information via SMS.

Two Use Cases of SMS Chatbots 

Who can use SMS Chatbots? The short answer is that anyone who runs a business can benefit from it. It adds another channel to the business’ array of communications tools.  The longer answer prompts us to look at the different types of SMS Chatbots and their applications. 

1. Customer Service SMS Chatbots 

Customer service chatbots independently communicate with website visitors in a live chat window. This tool can enhance the customer experience as it provides a quick way to resolve issues. A customer does not have to wait for an agent to find information and respond. The chatbot simply does it faster. SMS Chatbots of this type connect to customers through text messages.

Using customer service SMS Chatbots can be beneficial for any business. After all, text messages have become one of the most common ways to communicate. Statistics show that the already popular communication channel is only expected to grow. 

  • 5 billion people globally send and receive SMS messages. That’s about 65% of the world’s population. Experts expect this number to grow to 5.9 billion by 2025. 
  • 3.3 billion people access the internet via mobile. It’s predicted that by 2025, 72.6% of internet users will access the web via mobile only, using their smartphones.

It’s only natural that businesses increasingly jump on the new way to connect with customers. According to one survey’s results, almost a third of customers used text messaging to contact a business. 

Consumer Channel Use
Channels consumers used to contact brands in the U.S. June 2022 Source: Statista

Overuse Warning on Customer Service SMS Chatbots

It’s clear, SMS Chatbot can help streamline customer communications. But as always, keeping quality over quantity in mind is essential. Heavily relying on SMS Chatbots to handle all or most customer communications can be dangerous. As mentioned, true AI does not exist. And so, complicated customer inquiries can confuse a chatbot and lead the conversation to a standstill. Additionally, chatbots cannot offer empathy the way a human agent can. But in difficult situations, customers require just that. A lack of empathy and a confused chatbot can cause customer frustration. And that’s never good for business. 

To avoid that, only certain customer inquiries should connect to a chatbot. Categorize and funnel customer inquiries based on customer questions and their complexity. Doing so can help ensure that each customer inquiry results in a successful chatbot conversation. 

Functions of Customer Service SMS Chatbots

With that warning in mind, businesses should not shy away from SMS Chatbots when it comes to certain customer interactions. Here’re some examples of customer inquiries suitable for an SMS Chatbot conversation. 

Repeated Questions

A company in business for a while knows what questions its customers ask the most.  A low-hanging fruit, common FAQs suitable for a chatbot to handle. These include simple questions about business operation hours, store locations, and shipping times. Otherwise left for agents to answer, these repeated questions can overwhelm the customer service team. Allow chatbots to handle these inquiries. That frees up valuable business resources for more complex questions. 

Greetings and Redirections

SMS Chatbot Greeting


Chatbots can offer the initial greeting to the customers. They can ask questions about customers’ issues and then direct them to the correct department for a speedy resolution. 

Feedback and Discovery 

Customer feedback is a valuable resource for businesses in all industries. Utilize SMS Chatbot technology to help collect feedback. Doing that helps companies learn more about their customers. It can help them understand what questions customers have that a business’ FAQ or Home page do not address. Surveys and other feedback collection tool interactions also turn chatbots into even more helpful tools. 

Customer feedback
Customer feedback via bot

Customer Service SMS Chatbot Statistics

Texting customers is becoming a common practice. Because of that, customers not only appreciate the ability to text. They expect it. 

  • 45% of consumers don’t care if they interact with a live agent or a chatbot. They value the serve’s effectiveness, accuracy, and speed. (Business Insider)
  • At least 49% of all consumers contact customer service using automated channels at least once a week. (Business Insider)
  • 43% of consumers have texted a business unprompted with an expectation of the business’ text ability.
  • 64% of consumers think companies who text value their time. Customers say that fact would prompt them to recommend the company to others.  
  • Studies show that 77% of consumers say that they use texting more than other messaging tools. 
  • 68% of consumers would like to use mobile messaging to contact a company with billing questions or concerns.
  • 85% of customers in 2023 prefer receiving text messages over a phone call or email. (Slicktext)

2. Marketing SMS Chatbots 

SMS Chatbot creates an interactive marketing channel. That’s yet another growth strategy in the digital marketing era. It works for both prospective and existing customers. 

Here are examples of SMS Chatbot uses in marketing to establish connections with prospects ( 

  • notifications and coupons to existing customers
  • link to the business’ website sent to a specific (targeted) contact list 
  • Digital, traditional, or social media ads that prompt prospects or customers to text.
  • The “Text us” button on the website connects the visitor to an SMS Chatbot that collects necessary lead information. 

Here’s how the process works:

  1. A lead initiates a conversation with the bot organically or through an ad.
  2. The lead answers a series of qualifying questions through an automated conversation.
  3. The lead finds out quickly if they qualify for your services, right in the conversation.
  4. Once a prospect becomes a qualified lead, the business’ sales team is notified to contact and prompted to  take the next steps.

Marketing SMS Chatbot Statistics

Just as with customer service SMS Chatbot, marketing bots are gaining popularity. 

  • SMS open rates are as high as 98%.
  • As many as 45% of people reply to branded text blasts they receive.
  • About 61% of marketers still don’t use SMS. Implementing an SMS Chatbot gives businesses a competitive edge. 
  • 31% of consumers respond to SMS surveys, with an average response time of fewer than six minutes
  • SMS produces engagement rates six to eight times higher than retailers normally achieve via email marketing.
  • 48% of Internet consumers said they would prefer to receive their loyalty-related messages via SMS. 
  • 50% of US consumers make direct purchases after they’re sent an SMS branded text, a discount coupon, or a QR code. 34. Consumers who get SMS marketing messages are 40% more likely to convert than those who don’t. 
  • SMS produces engagement rates 6-8 times higher than retailers normally achieve via email marketing when used for redemption, data collection, and brand awareness. 
  • Coupons delivered via SMS have redemption rates 10 times higher than those of printed coupons. (MobileMonkey)

Key SMS Chatbot Features

However a business uses an SMS Chatbot, the tool must have certain features. When comparing software, look for these options. 

  1. Visual flow builder. Select a chatbot builder with an intuitive design and easy-to-understand building steps. 
  2. Live chat handover. Sometimes a chatbot will hit the wall. In these inevitable cases make it easy for a live agent to take over the communication. 
  3. Sentiment analysis. A great addition to smart bots, a natural language analyzer can help the bot understand customers on a deeper level. 
  4. Chatbot Analytics. Make the chatbot work for your business as much as it does for the customer. Advanced analytics can help a business gather customer insights.
  5. Data Security. Ensure the safety of your customer communications with secure systems. 

Best Practices for SMS Chatbots

1. Determine intent

The purpose of an SMS Chatbot is to improve customer experience. To lead the customer on the wrong path would result in a counterintuitive outcome. It is, therefore, essential for the bot to determine customer intent accurately. To do that, program the bot to analyze customer responses via natural language processing. Alternatively, the bot may present a customer with a list of options for customers to choose from.

Customer Intent
Determine customer intent

2. Leave no room for vague answers to avoid mistakes 

Once again, a bot cannot function beyond its preprogrammed choices. Design the bot so it presents all possible answers to the customer. The prospect or customer then has to select from the options presented, leaving no room for vagueness or open-end answers.

SMS Chatbot question examples
Bot question examples

3. Present clear benefits to the customer 

When a company connects with a customer via a text message, the relationship between them grows. Text messaging is more personal than a web chat or an email. It’s less anonymous to the customer. It’s therefore, important to make it clear to the customer what benefits this personal communication brings. SMS Chatbots must provide value. And they must communicate that value clearly. 

Benefits to the customer
Present clear benefits to the customer

4. Implement an auto-fill feature for easy exchange of information

Whether it’s payment information or a shortcut to the customer address, make auto-fill an option. The fewer steps the customer needs to take, the better the experience will be. 

Auto-fill feture
Auto-fill feture

5. Make it personal 

Up until recently, only friends adn family had access to customers via text. That means that text communication still carries an element of a close and personal relationship. Amplify that quality. Program the bot to use whatever personal information it has about the customer. 

Chat personal info
Make it personal

6. Make communications fun 

If you’re going to get into customer text messages, you might as well create some fun. Use emojis, gifs, or make a tasteful joke or two. These elements add some fun to conversations and increase customer engagement. 

Fun use of chatbot

Building a Successful SMS Chatbot

There is no one-bot-fits-all. Every chatbot must fit the prospective or current customer needs. The building process of conversation logic that fits customers’ needs takes practice. Create a few different flows, test them, and see what works best. Selecting an easy-to-use chatbot interface is the first step. Compare features and functions to find the best fit for your customers’ needs. Shop around for a few options. Review SMS Chatbot examples to, once again, decide what works best for your company and customers. 

We also recommend checking out the following resources that can help with the task. 

Admin Chatbot UI Set Up

Conversation Design Workflow: How to design your chatbot in 10 (basic) steps

10 Tips for Creating Engaging Chatbot Design People Will Use


With more customers connecting to businesses via text, SMS Chatbots can give a business a competitive edge. Whether you use the technology to address customer service needs or increase marketing efforts, keep natural language and customer engagement in mind. 

Think like a customer. Analyze recorded live interactions to identify the most frequent questions. Test your SMS Chatbot with a  small part of your customer base first. Track results. Build a bot that helps the customer and incites them to share their experiences with family and friends.

Happy Building!


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About The Author

Natalya Bucuy

Natalya Bucuy is a content marketer at LiveHelpNow. With expertise in customer service and marketing, she has written nu…

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