SMS Marketing Best Practices · Video Lessons

Shared vs. Dedicated Short Codes: Your Best Option

Have you heard people talk about a dedicated short code or shared short code, but not known the difference between the two? This week, Derek discusses the differences between the two different types of short codes and why each one exists.


What Is a Short Code

Before we dive into that question, let us first explain the meaning of a short code. Short codes are phone numbers with five to six digits. Brands use these phone numbers to communicate with consumers via text messages.


What Is a Shared Short Code

Now let’s look at the meaning of a shared short code (non-vanity short code). When brands use a shared short code for SMS marketing purposes, it means that they share that phone number with other users. The number of users can be in the tens of thousands for some shared short codes.

Short code owners are able to distribute the same phone number to all of these brands, because they work with keywords to differentiate them from each other. For example, the keyword “PIZZA” is given to a pizza restaurant that uses the shared short code, and a retailer uses the keyword “DISCOUNT” for its marketing campaign. This is done so that, when a consumer texts a specific keyword to a brand, it is clear to which company the message needs to go.

There are some issues, unfortunately, with shared short codes, but there’s one big benefit of shared short codes. The big benefit we’ll start off with is, it is very inexpensive to use a shared short code. A short code is either going to be $1,000 a month or $500 a month for whoever owns the short code, depending on if it’s vanity, which is like a really cool looking, good looking phone number, or a random phone number, which sometimes isn’t so good looking.

So, $1,000 a month, $500 a month for the owner of the short code. Now, if you have tens of thousands, or thousands of businesses using the same phone number, that owner of the short code is still only paying $1,000 or $500 a month. So that means that each business can pay maybe even…pitch in a dollar. And if you have 10,000, you know, customers all using the same short code, the same shared short code, then, you know, that person will be making $10,000, they’d be making $9,000 off the $1,000, you know, cost of the phone number.

So, it allows small businesses to use a short code. Where, maybe, they couldn’t buy their own short code because $1,000 is out of their price range. So, that’s the big benefit to a shared short code. It’s inexpensive to use. The owner still pays, you know, $1,000 a month or $500. But the brands, all those different brands that are kind of sharing the code, they can pay anywhere from zero to a couple bucks a month.

Now, they’re a bunch of negatives though, unfortunately. A shared short code means that everybody, all the thousands or tens of thousands of businesses that are using that short code, they’re all responsible for using the short code properly. If one of those thousands or tens of thousands of businesses misuses the short code, the wireless carrier will shut down the entire short code. So you can see the problem there. If you are a legitimate business and you’re using a shared short code, your short code could be shut down because somebody else using the short code misused the short code.

There are some other issues, too. You know, if you’re texting a random word or you mistyped a keyword into a shared short code, you’re gonna get a response from the short code owner, not a response from your business to help the consumer out. That’s usually a negative kind of experience for the customer. Also, with a shared short code, when you receive the text messages, let’s say you’ve opted in to multiple businesses on the same phone number, the same short code, let’s say the pizza place and the retail store, the messages are actually gonna come from the same phone number and be in the same thread, which is sometimes confusing for people, especially if competitors are using the same phone number, you know, the same shared short code.

Also, another negative is brand. If you’re concerned about your brand, you don’t know who’s using that phone number as well. So there might be businesses that are advertising, text something to 12345 that you might not be really keen on associating yourself with, and you have your brand over here saying the same thing to the same phone number, some people think that maybe there might be a relation. So, that’s always a concern, too.

So, if you’re usually a larger brand or you’re concerned about your brand, that’s when you wanna move to a dedicated short code. If you’re a small, one-off location business, and you just can’t afford a dedicated short code, really, a shared short code is a good option for you.


What Is a Dedicated Short Code

A dedicated short code (vanity short code) is different from a shared short code in the sense that only one single brand uses it. For that reason, dedicated short codes are more expensive then shared ones. They can cost as much as $1.000 per month, and that is why smaller brands with small budgets prefer to use the much cheaper shared short codes.

There are many different reasons why brands select dedicated short codes when they’re looking to send mobile messages to their customers. A few of the reasons are one is safety of the code. So on a shared short code, if one of the thousand or tens of thousands of businesses misuse the short code, then every brand using that short code is responsible for that misuse. And when someone misuses a short code, a short code gets suspended by the wireless carriers, which means you can’t receive or send text messages on that phone number, so even if one out of ten thousand businesses misuse a shared short code, that means all 10,000 business can no longer send messages. That obviously, you don’t want to happen.

A dedicated short code, though, is great because it is dedicated. It’s owned by one brand and it’s used by one brand. So as long as that one brand, which the brand is in control of their usage of the short code, they follow the rules, it’s very, very unlikely that the short code would ever be suspended. So that’s the first reason.

Second reason is keywords. So when a shared short code, remember, it’s only one phone number for thousands or tens of thousands of different business, that means the keyword, which is a thing that you text in to the short code, text, you know, pizza to 12345, pizza would be the short code. Those short codes are unlimited supply, kinda like domain names or Twitter handles. Because there’s so many different business all using that one phone number, you have to find one that’s available. So a lot of SMS providers will limit the amount of keywords that you can have, or they’ll charge you a lot of money per keyword that you take.

A dedicated short code on the other hand, because you own the phone number, that means you own all of the keywords that are available, any word, or combination of word, and letters, numbers, it’s all available for you because that it’s your phone number, it’s dedicated.

Another reason is the association. This is a big one for big brands. So with a shared short code, the phone number, let’s say, 12345, that phone number is going to appear on ads for all kinds of businesses. Some businesses, you may not agree with, some businesses, you know, maybe sound competitive products to you, so if you’re on a shared short code, you have no control of where that phone number is advertised, and who uses it. On a dedicated short code, it’s kinda like owning your own domain, or your own 1-800 number. It’s yours, it’s branded to your brand, and when people see it, they think of only your brand.

Another one, which I think is really interesting especially when using user testing is on a shared short code, if somebody mistypes your keyword, they could either opt into another business’s text messaging campaign, which is horrible obviously or if they mistype your keyword and the keyword does not exist on that short code, they’re gonna get an error message from the SMS provider saying, “Sorry, we don’t know what you’re trying to do. Reply help and stop.” But they’re not gonna give really any instructions because they don’t know which of the thousands, or tens of thousands of businesses that specific phone number is trying to interact with.

On a dedicated short code, though, it’s a much better user experience. So let’s say your keyword is “pizza,” let’s say they text in “crust,” and they mess it up for some reason. Instead of saying, you know, “Sorry, we don’t know what you’re trying to do.” The brand, because they own the phone number, they can respond with a very specific message that actually helps the consumer. So they could respond back saying, “Sorry, that’s not a valid keyword. If you’re interested in opting in, text ‘pizza.’” That’s a much better experience than a generic message that’s sent out on a short code.


Why Are Shared Short Codes Cheaper?

A shared short code still technically costs $1.000 per month. However, many brands are using it, so the owner of that shared short code is able to split the costs over the thousands of brands.

This makes shared short codes a cheap solution for all the parties involved. However, brands need to keep in mind that a cheap solution is not necessary the best solution.


The Issues with Shared Short Codes

Shared short codes bring along some serious problems, and that is why we never recommends them to our clients, and we definitely do not support them.

One of the most important reasons why we do not recommend or support them is because thousands of organizations, groups and brands are not only sharing the same short code, but they also share the responsibility.

If one brand makes improper use of a short code, then that can result in a short code shut down for all of its users. None of those users will be able to receive or send messages because of the bad marketing practices of one brand.

Therefore, if text messaging is a critical part of your brand’s marketing strategy, you should always go for dedicate short code so that you will be the sole owner and user of a phone number.

Another good reason why you might want to consider using a dedicated over a shared short code is because you do not want to give the idea that your brand has an association or affiliation with competitors or certain organizations.

If consumers see that you use the same phone number as an organization that they resent, then they might no longer want to receive your messages, and it could hurt the good reputation of your brand.

There is also a technical reason why your brand should not use a shared short code. If someone mistypes an opt-in keyword, then that person can accidentally subscribe to the SMS campaign from a different business, or the person receives an error message that is not from the brand but from the actual shared shored code owner.

Such an error message would say something like, “Sorry, you typed an invalid keyword. Please contact this SMS software provider.” This would obviously be very confusing for someone who, for example, tries to opt-in to the campaign of a pizza restaurant.

The last shared short code issue we want to address is the keyword availability. Since you share the short code with many other users, there is a good chance that they already claimed all the good keywords.

If you choose to use a dedicated short code, then your brand can choose every keyword, because you are the single owner of that short code.


Don’t Sacrifice the Security of Your Messaging Campaign

So those are the issues with shared short codes that we wanted to address. Although we fully understand that some small businesses simply cannot afford the $1.000 a month for a dedicated short code, we still advise those businesses to think carefully if they really want to sacrifice the security of their text messaging campaigns by using a shared short code.

If brands do have the budget to use a dedicated short code, then we highly recommend that they use a dedicated short code for their text message marketing campaigns.


Learn More About Short Codes and Text Message Marketing

If you want to learn more about shared short codes, dedicated short codes, and other text message marketing topics, then get in contact with the Tatango team or check out some of our SMS Marketing resources below:

Download: Selecting SMS Keywords (free eBook)
Watch: This Will Make You an Expert on Short Codes & Keywords
Watch: Selecting SMS Keywords (free webinar)
Watch: AT&T Bans Shared Short Codes – Now What?

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