WhatsApp has become one of the most popular messaging apps worldwide in recent years. It has over 2 billion active users. People traditionally use this platform for personal conversations. But businesses have increasingly been using WhatsApp to interact with their customers.
In fact, it’s the third-most-popular social media network globally. Additionally, compared to email and SMS, WhatsApp boasts an average conversion rate of about 45-60%, making it an attractive option for businesses. E-commerce companies have also expanded their use of WhatsApp by 352%.
In response to this trend, WhatsApp launched the WhatsApp Business platform. It is a suite of tools designed for businesses to communicate with their customers. Now, WhatsApp is planning to revise its business model from June 2023, which includes changes to conversation types, templates, and pricing structure.
To help you better understand the new pricing model, we have created this guide. It will explain what is changing, the new pricing model, and what businesses can expect, as well as the benefits it can bring to them.
So, without further delay, let’s get started.
Existing pricing model
Currently, the WhatsApp business pricing model is conversation-based. Users have to pay for conversations (with a 24-hour window) instead of per message sent. Businesses just need to pay once for every 24-hour conversation; there are no additional fees for further messages from the company or the customers. The costs vary according to who started the conversation.
New pricing model from June 2023
WhatsApp is introducing a new pricing model in June 2023. However, the pricing will be conversation-based. But the new pricing model will add more depth to the different conversations throughout the customer journey.
Meta focuses on delivering the ultimate customer journey on WhatsApp Business. It allows businesses to communicate with their customers through different touchpoints. It also lets them communicate with their customers in several ways.
WhatsApp Business has expanded its focus beyond just service and now provides additional features such as notifications, marketing messages, and other interesting features.
Why is WhatsApp changing it?
WhatsApp wants its pricing to reflect the message value better than a regular text message. Meta is raising the cost of marketing messages in response to multimedia’s increased ability to engage viewers and WhatsApp marketing messages’ potential for re-engagement. Simultaneously, they are lowering the cost of utility messages.
What is changing?
Meta will switch to the use-case pricing model from 1st June 1, 2023. Below are the top changes that you can expect-
- Business initiated conversation
Business-initiated conversations will be charged according to their use case under the new pricing structure. The message template category used to start the conversation will determine its use case.
We will discuss the different template categories later in this article.
- User-initiated conversation
User-initiated conversations, as the name suggests, start when the business responds to a user’s inbound message with a non-templated response. The pricing of these types of conversations will not change, but they will be renamed “Service” conversations.
- Free entry point and conversation
Starting on March 1, Meta will extend the free window for WhatsApp conversations that begin with advertisements that click to WhatsApp and Facebook Page CTAs from 1 to 3 days.
Currently, business-initiated and user-initiated conversations count toward the monthly 1,000 free conversations. But, from June 2023, only user-initiated conversations will count towards 1000 free conversations for each business.
Conversation categories
Meta is introducing four conversation categories to align the pricing model with its vision. Below are the four conversion categories-
1. Utility
Utility conversations are business-initiated conversations. It is often related to a transaction. Think about purchase information and confirmations. Also, consider post-purchase notifications and recurring billing statements for opted-in customers. When compared to the existing rates for business-initiated conversations, the charge for utility conversations will often be less expensive. This will enhance the customer’s experience and customer service.
2. Authentication
Security is the key to an authenticated conversation. During verification, you can authenticate users with an OTP at multiple touchpoints. Account registration and verification are a few examples of touchpoints.
In many cases, authentication conversation rates will be considerably lower than existing business-initiated conversation rates. However, they will be charged at rates similar to those for user-initiated conversations.
3.Services
Services conversations are all user-initiated conversations. These conversations involve conversations to resolve user queries. The service conversation fees will be similar to the current user-initiated conversation rates.
4.Marketing
Business-related conversations usually start with marketing. This conversation aims to market your service or product. You can send users offers, deals, and other relevant conversations with marketing messages. This category includes any business-initiated conversation that does not qualify as an Authentication or Utility conversation.
The marketing conversation rates will be higher than the current business-initiated rates. This information might be haunting for you. But WhatsApp marketing has a higher ROI than other marketing channels. Moreover, the new fees are not much different from other marketing channels.
Remember, the template used will determine the conversation category for the conversation window. This happens because business-initiated conversations always begin with a template. However, you can also switch between categories. But it will start a new 24-hours conversation window. Remember, it also requires fees. Let us understand with an example-
If you send a message to promote your product, you will use the marketing conversation category. It also applies to the marketing conversation rates. However, the need for a utility category template arose during the conversation. You have to switch to the utility conversation category. At that time, the utility conversation rates will apply to the conversation.
How will the conversation window change?
The initiation of marketing, utility, and authentication conversations occurs when a pre-designed message is sent and successfully delivered to the recipient.
Service conversations are initiated under specific conditions. Firstly, there should be no other ongoing conversations. Secondly, a free-form message response must be provided within 24 hours when a customer care request is received. Lastly, delivering this message to the end user marks the beginning of the service conversation.
After delivery, the 24-hour session begins, and you can send one or more messages without additional cost. But remember, you must use the same conversation type.
You cannot send messages from one category to different categories. If you do so, the new window will open and charge you more.
Benefits of the new WhatsApp pricing model
WhatsApp Business API allows businesses to get closer to their customers. The company always attempts to improve its services for businesses. They are coming with the new pricing model in June 2023. Below are the top benefits of the new Whatsapp pricing model-
- 72 hours free of charge services
WhatsApp business is the most popular service on Meta. Meta, to focus on broadening the applications of its other offerings, provides a three-day or 72 hours costless trial when a user starts a chat through Facebook or Instagram. This can be done via an Instagram or Facebook page CTA.
- 1,000 free conversation services monthly
Yes, you read it right! WhatsApp provides 1,000 free conversations monthly to each business. It will enable your company to serve customers and familiarize itself with the messaging platform. You will be given a space to build trust with your clients as well as a free trial of the WhatsApp business before you begin paying. If you want more than 1000 conversations, you must pay as per the conversation category.
How conversation charges will be initiated?
The cost of the conversation depends on the category of the template used. When a template is sent and delivered, a new conversation is created within its respective category, which incurs charges for that category. If a template is delivered while an ongoing conversation in the same category is open, there will be no new conversation or extra charges.
Service conversations will only begin when no conversation window is open. Additionally, a business must respond to a user with a free-form message within the 24-hour customer service window.
If a business responds to a customer in a template message or replies in an open service conversation, it opens a new conversation based on the template category. A free entry point conversation is an exception to this rule. During a free window, you can send uncountable templates from different categories. Moreover, no new window will open in the free window.
Remember, charges for conversations are dependent on the user’s country code. Here, the user is referred to as your “customer,” with whom you communicate on WhatsApp. Charges for user-initiated and business-initiated conversations differ by country or region.
Impact for you
We know that you are waiting to learn about the impact of the new pricing model of the WhatsApp business on your company. So here comes the end of your wait. Below are the top impacts that your business might experience due to the new pricing model of WhatsApp Business-
- Customer support heroes
If you want to set up your customer support system to respond immediately when they need it, you will be charged for service conversations. However, the rate will be comparable to the current rates. Indeed, you will get 1,000 free conversations monthly. But if you want to offer continued customer support, you must be ready to pay for it to enhance your customer experience.
- Marketing Manager
If you send promotional or marketing messages to your customers through WhatsApp business, you may be affected by the new pricing model. When compared to current prices, the cost of business-initiated marketing conversations will rise.
The WhatsApp business has a higher return on investment than other communication channels, so expect higher rates for marketing messages. However, the rates will be similar to other channels.
You can also invest in Facebook and Instagram ads. This allows you to utilize the free Meta entry points, giving you a 72-hour free-of-charge conversation window. This can also assist you in boosting your conversion rates even more.
- Notification
If you are a fan of WhatsApp’s notification features, here is good news for you: the prices for these features will slightly decrease starting June 1, 2023. OTP, order updates, purchase confirmation, and more are a few examples of WhatsApp notification features.
Conclusion
The WhatsApp Business Platform has transformed how businesses communicate with customers, providing a cost-effective and personal way to engage with their audience. With the introduction of the new pricing model, businesses can continue to take advantage of this opportunity. This article has covered all the necessary aspects of the new pricing model for business-initiated conversations. We hope that the information and insights provided have been helpful to you.