WhatsApp Business New Pricing Explained [2023]

Introduction

In today’s evolving digital world, messaging apps like WhatsApp have become vital channels for businesses to connect with their customers. With more than 2 billion users worldwide, WhatsApp provides businesses with a platform for prompt communication and customer service. But, as we step into a new era of digital communication, it’s important to stay up-to-date with the latest changes and updates, particularly the ones related to WhatsApp business new pricing.

A Foreword on WhatsApp’s Changing Landscape

WhatsApp, owned by Meta, formerly Facebook Inc., has been transforming the way businesses interact with their customers. As part of its ongoing evolution, the messaging giant is rolling out some significant updates to its pricing from June 1, 2023.

Backdrop: Why WhatsApp is updating its pricing

The primary reason for this change is to better align WhatsApp’s pricing with the various stages of the customer journey. The update expands conversation-based pricing from two conversation categories to four, making pricing more representative of the kind of conversations businesses have with their customers. This is an attempt to provide businesses with a more nuanced and accurate pricing structure, allowing for fairer and more predictable costs.

Evolution of WhatsApp Business: A brief history

Since its inception, WhatsApp Business has continually evolved, adding new features and tools to support businesses in reaching their customers. The transition from a simple peer-to-peer messaging app to a dynamic business platform has been marked by several significant milestones. However, the latest shift in its pricing strategy is considered one of the most consequential changes since the launch of WhatsApp Business, promising to change how businesses budget for their WhatsApp-based customer interaction.

A Deep Dive into the New Conversation-Based Pricing

Understanding WhatsApp’s pricing structure is fundamental for businesses using this platform. With the new pricing roll-out, WhatsApp intends to provide a more refined and category-based pricing model, making it easier for businesses to plan their budget.

The Four New Conversation Categories

As of June 1, 2023, WhatsApp is introducing four distinct conversation categories. This transition is from the current two categories, which means that the rates will now be defined by the category of the conversation. The classification of these conversations is primarily based on the nature and intent of the communication. Here’s a quick run-through of each category:

Utility Conversations

Utility conversations are based out of the customer’s utility of product. To be specific – any agreed-upon transaction or request, updating a customer about an ongoing transaction, or any product based information based on his request. This could include various transaction updates, confirmations, or post-purchase notifications etc.

Authentication Conversations

Authentication conversations serve a different function. They are used by businesses to verify users with one-time passcodes, which might be required at various steps during the login process, such as account verification, recovery, or integrity challenges.

Marketing Conversations

Marketing conversations, on the other hand, are more promotional in nature. These conversations include new offers, sale or promotional updates regarding new launches, or invitations for customers to make a purchase. Essentially, any conversation that does not qualify as utility or authentication falls under this category.

Service Conversations

Finally, we have Service conversations, which are initiated by users to resolve their queries. All conversations initiated by customers fall into this category, making them a significant part of customer service via WhatsApp.

Now, let’s break down how these categories impact the pricing for businesses on WhatsApp.

How Conversation Charges Are Initiated

With a clear understanding of conversation categories, the next step is to comprehend how WhatsApp charges for each. The type of conversation plays a crucial role in determining the cost incurred by the business.

Template Based Charging

The charge for a conversation begins when a business sends a template message. The nature of this template message, whether it’s utility, marketing, authentication, or service, sets the conversation category. Let’s explore how this works:

Multiple Conversations and Their Charges

Interestingly, WhatsApp allows multiple conversation windows with the same user. When a template is delivered to a user, it initiates a new conversation corresponding to the category of the template. This means a new conversation (and the accompanying charges) starts unless there is already an open conversation of the same category.

For example, if a business is currently engaged in a utility-based conversation and sends a marketing template within that conversation, it triggers the opening of a separate marketing conversation. This newly opened conversation is charged separately, according to its category. However, sending different templates of the similar category within an open conversation window will not incur extra charges.

Free Entry Point Conversations

WhatsApp provides a provision for free entry point conversations, which is especially beneficial for businesses. Throughout this free period, businesses have the liberty to dispatch numerous templates spanning different categories without instigating the creation of a new conversation. The standard pricing applies only when the free window period is over.

Conversation Charges Based on User’s Location

WhatsApp’s conversation-based pricing also takes into account the user’s location, defining a user as the customer the business is communicating with. Hence, charges for both business-initiated and user-initiated conversations may vary based on the country or region of the user.

Overview of Rate Cards by Conversation Category

Understanding the rates associated with different conversation types is essential for effective budgeting. WhatsApp has outlined its rates by conversation category, which will go into effect on June 1, 2023.

Rate Cards Breakdown

Rate cards have been designed for various currencies, providing a comprehensive overview of the pricing for utility, marketing, authentication, and service conversations.

Currency-specific Rate Cards

WhatsApp has taken a global approach to pricing by offering rate cards in multiple currencies such as USD, AUD, EUR, GBP, IDR, and INR. This step accommodates the diverse businesses and customers using the platform worldwide.

Updates to WhatsApp’s Conversation-Based Pricing in 2023

Keeping up with the changes in WhatsApp’s conversation-based pricing strategy is vital for businesses that want to continue reaping the benefits of the platform.

Free Entry Point Conversations

In March 2023, WhatsApp made significant changes to free entry point conversations. Initially, these conversations were free when customers messaged businesses using call-to-action buttons on Ads that Click to WhatsApp or Facebook Page call-to-action buttons. WhatsApp extended the free conversation window from 24 hours to 72 hours.

Conditions for Free Entry Point Conversations

During the free conversation window, businesses can’t open any other conversation category, even if a template message is sent within the 72-hour free entry point conversation window.

Changes to Free Tier Conversations

Another significant change comes to the Free Tier Conversations, effective from June 1, 2023. Businesses can now trial the WhatsApp Business Platform with 1,000 free user-initiated conversations each month.

Understanding Free Tier Conversations

In the free tier, only user-initiated conversations are free. The free tier is refreshed monthly, based on the timezone associated with the WABA. Business-initiated conversations, however, will no longer be included in the free tier.

Scope of Free Tier Conversations

Each WhatsApp Business Account (WABA) will receive 1,000 free user-initiated conversations per month, regardless of the number of phone numbers attached to the WABA.

Navigating New Conversation Rates

It’s crucial to grasp how the new conversation rates apply to different categories. WhatsApp has designed its system to be as transparent as possible, providing businesses with clear insight into conversation costs.

How WhatsApp Defines Conversations

Understanding WhatsApp’s terminology is critical for making the most of the platform’s new pricing structure. Each interaction on WhatsApp is classified as a ‘conversation’ and is initiated when a template is delivered.

Initiation of Conversation Charges

Charges for a conversation begin with the delivery of a template message. The category of the template message defines the type of conversation and thus, the associated charges.

Understanding Conversation Categories

With the rollout of the new pricing structure, WhatsApp has introduced four distinct conversation categories. These are utility, authentication, marketing, and service conversations.

Multiple Conversation Windows

It’s essential to understand that multiple conversation windows can be open with the same user. Each template delivered to a user opens a new conversation of the template’s category, unless a conversation of the same category is already open.

Fine-Tuning Your WhatsApp Marketing Strategy

With these updates to WhatsApp’s pricing model, businesses need to adjust their marketing strategies accordingly.

Taking Advantage of Free Tier Conversations

WhatsApp offers 1,000 free user-initiated conversations each month for each WABA. Businesses can use these free conversations as an opportunity to improve customer relations and drive conversions.

Adapting to New Marketing Conversations

The new pricing model classifies any conversation that includes promotions, offers, informational updates, or invitations for action as marketing conversations. Businesses need to refine their strategy to ensure they’re getting the most out of each marketing conversation.

Measuring ROI on WhatsApp

With the recent addition of performance metrics and features designed to enhance marketing conversations, businesses can more accurately measure their return on investment on WhatsApp.

Understanding WhatsApp Performance Metrics

WhatsApp now provides detailed metrics, including sends, reads, and top block reasons across different conversation categories. These insights can inform businesses on how to optimize their conversations for better engagement and outcomes.

Embracing Change and Forging Ahead

The new WhatsApp pricing model is more than just a change; it’s a strategic shift for businesses. Adapting to these changes offers opportunities to maximize utility and authenticity, prioritize service conversations, and optimize marketing efforts. Businesses can now refine their messaging strategies with greater precision and create more tailored interactions with their users.

Forging Ahead with WhatsApp

With this new structure in place, businesses now have a roadmap for navigating the pricing model of WhatsApp. The journey will involve a learning curve, but the flexibility and functionality that WhatsApp offers are an invaluable resource for businesses globally.

Conclusion: Embracing the New Pricing Model

While the new pricing model may seem complex initially, it offers opportunities for businesses to engage with their customers more strategically and effectively. Businesses should embrace these changes as an opportunity to reassess their engagement strategies, capitalize on free service conversations, and fine-tune their approach to utility, authentication, and marketing conversations. By doing so, they can unlock the full potential of what WhatsApp has to offer and continue to evolve in an ever-changing digital landscape.

Check out this video guide on Whatsapp Marketing