WhatsApp Business API (WABA) is a powerful tool for customer engagement and raising customer experience. WABA offers businesses a more structured way to scale customer messaging in a streamlined and secure manner. What is (still) shocking for some business owners is the fact that this version of WhatsApp may incur charges, even for receiving messages.
I will explain the WABA pricing model and structure in this article, then include some useful hacks to maximise your engagement & marketing ROI when it involves WABA combined with other Social Media.
SMS conditioned us to expect charges for each message we sent. While the other 2 flavours of WhatsApp are free, they do have limitations. WABA’s pricing model is a little different: an unlimited number of messages in a 24-hour window—a ‘conversation’.
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Types of Conversations and Their Charges
WABA differentiates between two main conversation types, with varying charges depending on who initiates the conversation and what purpose the initiating message serves.
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1. User Initiated Conversations
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i) Service
• Definition: These conversations begin when a customer sends the first message to the business. When your customer contacts you for support or product enquiries, WABA perceives them as ‘service’ conversations.
• Charges: Low Cost: User-initiated conversations are generally more affordable than business-initiated conversations.
• Example: A customer WhatsApps your business to ask about product availability. The 24-hour window starts as soon as the first message is delivered, and all further interactions during that period are counted as one user-initiated conversation.
• Best Practices: Encourage Customers to Message First: Use your website, social media, or email campaigns to encourage customers to initiate conversations with a ‘code’ built into the WhatsApp QR code. This will allow you to leverage lower-cost, user-initiated interactions. We advise all our clients to include a ‘code’ to track the source or campaign to measure their engagement and conversions better and improve future strategy.
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2. Business-Initiated Conversations
• Definition: Business-initiated conversations are when the business sends the first message, either starting or restarting a conversation with a customer or after the initial 24-hour conversation window has closed. These messages must be sent using pre-approved message templates and are subject to specific charges based on their purpose deemed appropriate by WABA.
Business-initiated conversations are categorised into three types:
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ii) Utility Conversations
• Definition: These are transactional messages that provide essential updates or notifications related to a specific customer transaction.
• Charges:
Lowest Cost: Utility conversations are generally priced lower than marketing conversations but higher than user-initiated ones.
• Examples:
Order Confirmations: “Your order #12345 has been confirmed.”
Shipping Updates: “Your package has shipped and will arrive on [DATE].”
Appointment Reminders: “Your appointment is scheduled for tomorrow at [TIME].”
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iii) Authentication Conversations
• Definition: These conversations are used for user verification, typically during account registration or two-factor authentication (2FA).
• Charges:
Lower: The charges for authentication conversations are typically in line with utility conversations.
• Examples:
Two-Factor Authentication (2FA): “Your verification code is 123456.”
Account Security Checks: “Please verify your login using this code: 654321.”
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iv) Marketing Conversations
• Definition: Marketing conversations are promotional in nature and aim to drive engagement, sales, or brand awareness. These messages could include offers, promotions, product announcements, or event invitations.
• Charges:
Highest Cost: Marketing conversations incur the highest charges
• Examples:
Promotional Offers: “Get 20% off your next purchase with code SAVE20!”
New Product Launch: “Introducing our new collection—available now!”
Event Invitations: “Join our special event with exclusive deals this weekend.”
• Best Practices:
Targeted Campaigns: Use data-driven strategies to send marketing messages of the right product, to the right customers, at the right time to maximise your marketing ROI.
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3. Special Case: Free Conversations from Ads and Call-to-Action Buttons
WhatsApp offers an important cost-saving opportunity when customers initiate conversations through advertisements or call-to-action (CTA) buttons on platforms like Facebook or Instagram. These conversations benefit from an extended 72-hour free window, giving businesses more time to engage without incurring charges.
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How It Works:
- Ad Click to WhatsApp: When a customer clicks on a Facebook or Instagram ad that directs them to WhatsApp, the first 72 hours of the conversation are free.
- CTA Button on Facebook Page: Similarly, when a customer clicks the “Message” button on a Facebook Page, the conversation remains free for the first 72 hours.
After 72 Hours: Once the free window ends, standard conversation charges apply.
• Example: A customer clicks on an Instagram ad promoting a sale and initiates a conversation with the business via WhatsApp. For the first 72 hours, this interaction is free, allowing for detailed engagement without immediate charges.
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4. Free Tier Conversations Each Month
WhatsApp Business API provides 1,000 free service conversations per month, which are refreshed at the start of each calendar month. However, only service conversations are included in this free tier.
Marketing, utility, and authentication conversations are not part of the free tier.
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Key Points:
• Service Conversations Only: The free tier applies to user-initiated conversations related to customer service.
• No Free Marketing or Utility Conversations: Business-initiated conversations, including marketing, utility, and authentication messages, are always charged.
• Monthly Reset: The free 1,000 conversations reset at the start of each calendar month
• Example: If a customer contacts your support team to resolve an issue, the conversation will be counted as a free service conversation within the 1,000 free tier. However, sending a promotional offer to the customer will incur a charge.
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5. Hacks: Maximise Your Marketing ROI with WABA
Here are strategies to optimise your WhatsApp Business API usage and minimise costs:
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i) Encourage User-Initiated Conversations
• Strategy: Guide customers to initiate conversations, which are generally cheaper than business-initiated ones.
• Use Social Media and Email: Encourage customers to message you first via WhatsApp for support or inquiries.
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ii) Leverage Free Conversations from Ads
• Strategy: Use the 72-hour free window from Facebook and Instagram ads to engage with customers cost-free.
• Optimise Ad Campaigns: Drive users to your WhatsApp through well-placed ads that initiate free conversations.
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iii) Monitor, Analyse and Track Usage
• Strategy: Regularly review your conversation usage and costs to ensure you stay within budget.
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Key Takeaways
• Conversation-Based Pricing: WhatsApp charges based on 24-hour conversation windows rather than individual messages.
• User-Initiated Conversations are Cheaper: Encourage customers to start the conversation to benefit from lower charges.
• Business-Initiated Conversations are Categorised: Utility, authentication, and marketing conversations each have different costs, with marketing being the most expensive.
• Free Conversations from Ads: Conversations initiated through ads or CTA buttons are free for the first 72 hours.
• Free Service Conversations: Businesses get 1,000 free service conversations monthly.
• Understand the charging & pricing structure to maximise your WhatsApp Business API marketing efforts.
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Conclusion
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WABA offers significant business value because it allows for many CXaaS features to enhance Customer Experience. Understanding its pricing model is crucial when you are shaping your engagement strategy for maximum ROI. Coupled with the right business tools and AI-powered analytics, this can be a game changer for your business.
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For more detailed and region-specific pricing information, visit WhatsApp's official pricing guide or consult a WhatsApp Business Solution Provider to ensure you optimise your use of the API.
