AT&T, T-Mobile, Verizon, and other major wireless carriers developed SMS short codes as an alternative to regular 10-digit mobile phone numbers. Compared to traditional 10-digit phone numbers, SMS short codes are much easier for consumers to read and recall as they are about half the length. For more information about SMS short codes, click here.
In the mobile industry, the two main types of short codes most commonly referred to are:
- Shared short codes
- Dedicated short codes
Dedicated short codes
A dedicated short code is owned and exclusively used by a single brand or organization. Due to the nature of a dedicated short code, the owner is wholly responsible for the monthly lease cost, which can start as low as $500 per month.
For example, Olive Garden has the dedicated short code, number 29002. Since Olive Garden owns its dedicated short code, no other business or organization can send or receive messages using the short code 29002.
Shared short codes
A shared short code is a short code that is owned by an SMS software provider and shared between many different brands and organizations using the SMS software. With some short codes shared between thousands of different brands or organizations, the resulting cost per user can be low.
To illustrate a shared short code example, we’ll use the shared short code 373737. In this situation, there are two businesses, a quick-serve restaurant, and an oil change service. These businesses both use the shared short code 373737. To avoid messaging issues, they use their own unique keywords, “FRIES” and “OIL”, respectively.
Cost differences between shared and dedicated short codes
One of the most common reasons that many businesses and organizations use shared short codes is because of the cost advantage. With a dedicated short code, the owner of a short code is responsible for the entire lease amount, which can be anywhere from $500 – $1,000/month. With a shared short code, a business or organization can get access to a short code at a fraction of the cost of a dedicated short code.
This is made possible as each business or organization using the shared short code is sharing the cost of that shared short code. Many shared short codes have thousands, or even tens of thousands, of businesses and organizations all using the same short code at the same time. It’s because of this that many shared short codes can be rented for a few dollars each month. The lower cost is a result of each brand or organization sharing the cost of the short code.
Advantages and disadvantages of shared and dedicated short codes
Dedicated short codes allow brands and organizations to own a unique short code. They also provide for better messaging capabilities, like faster message throughput and message detail reporting. The use of dedicated short codes is common among large brands like Pizza Hut, Bed Bath & Beyond, and Burger King because of the potential risk that using shared short codes presents.
Shared short codes provide a solution for brands and organizations looking to use text messaging more cost-effectively, but also present more risk. When using a shared short code, organizations run the risk of lower sending speeds and sharing the risk of other organizations misusing the shared short code.
When a wireless carrier performs a short code audit, and a business or organization is using a shared short code in violation of the rules, the wireless carriers will suspend all text messaging traffic on the shared short code. This means that if brand A and B are using the same shared short code, and brand B is found to have violated the rules, both brand A and B will not be able to send or receive text messages on that shared short code.
When a shared short code is suspended, it can take up to a month for the wireless carriers to remove that suspension, depending on the severity of the violation. During the time that a shared short code is suspended, no text messages can be sent or received on that shared short code.
With the majority of shared short codes being used by thousands, or even tens of thousands of businesses and organizations, it’s impossible to guarantee that all users of a shared short code are in compliance with wireless carrier rules. It’s because of this that the U.S. Short Code Directory cannot ensure that when using a shared short code, that text messaging will not be interrupted due to another’s misuse of the shared short code.
For that reason, while dedicated short codes cost a bit more financially, they are by far the safer route to go to prevent any interruptions in text message marketing, to be able to create unlimited keyword campaigns, to access the highest messaging speed available, and to have total control of your text message marketing campaigns. Read more about the benefits of a dedicated short code.