Looking to enhance your customer interactions? 

The WhatsApp Business API is transforming how businesses engage with customers. 

Unlike the free app, it offers robust features like automated messaging, integrations with your existing systems, and advanced security, making it ideal for large businesses with high message volumes and complex needs. 

From showcasing products to sending order updates and processing payments, the WhatsApp Business API empowers you to create seamless customer experiences in one powerful app. 

However, there’s a cost involved. This blog will help you find the perfect plan for your business, ensuring you don’t miss out on important features or end up overpaying due to hidden costs.

Changes in 2024

In February 2022, WhatsApp announced a switch in the WhatsApp Business API pricing model from a notification-based to a pay-per-conversation model, which took effect on June 1, 2023. Other than that, here are some other updates that took place.

Conversation Window Extension (March 1, 2023):

• Conversations started via “click on WhatsApp” ads or “Facebook CTA” buttons have a longer window to respond for free: 72 hours instead of 24 hours.
• All conversations are free within a 72-hour window, including WhatsApp Template Messages.

New Conversation Categories (April 1, 2023):

• Your message templates must be under one of four new categories: Utility, Authentication, Marketing, or Customer Service.
• This helps Meta categorise messages and potentially adjust pricing in the future.

New Rate Cards (June 1, 2023):

• There exists a new pricing structure for utility, authentication, and marketing conversations.

Changes to Free Tier Conversations (June 1, 2023):

• Conversations initiated by businesses are no longer included in the free tier (1,000 per month).
• Only 1,000 user-initiated conversations per month are now free.

Pricing Component

Let’s discuss some of the pricing components of WhatsApp Business API.

1. User-initiated conversation (UIC)

User-initiated conversations are also called service conversations. Here, customers start a chat with a business. Such conversations can be natural and free-flowing, unlike template-based messages. Hence, allows for better rapport building. 

These messages are generally free within a 24-hour response window. However, sending promotional messages or exceeding the time frame might incur charges depending on the platform and location. 

Also, some types of non-promotional messages can still be sent for free after 24 hours.

2. Business initiated conversation (BIC)

When a business starts a conversation with a user, either after the 24-hour session window or as the first message using a template message, it’s considered a business-initiated conversation. Before initiating such conversations, businesses need to get their template messages approved. 

There are three types of business-initiated conversations

• Utility Conversation: Includes transactional or operational messages like order status, receipts, payment notifications, appointment reminders, boarding passes, and more.
• Authentication Conversation: Includes authentication and verification of users with OTP, such as account recovery, security, integrity, etc.
• Marketing Conversation: Includes promotional and marketing messages, such as offers, discount coupons, sales, cross-selling, etc.

Pricing factors

Factors like location, conversation category, and number of contacts can majorly influence the pricing of WhatsApp Business API. Let’s see how.

1. Location 

WhatsApp charges different prices for its business API based on the country. They divide countries into groups based on how developed they are economically. 

Countries with higher economic development are in a higher tier and have higher prices. On the other hand, countries with lower economic development are in a lower tier and have lower prices for using the WhatsApp business API. 

This results in different rate cards for each tier.

2. Conversation category

The cost of conversations varies depending on their type:

• Marketing and utility messages are relatively more expensive.
• Authentication messages are moderately priced.
• Service conversations, initiated by customers, are the least expensive. Each WhatsApp Business account receives 1,000 free service conversations per month. Charges apply for additional service conversations once this limit is reached.

3. Number of contacts

Number of contacts has no direct impact on the price of WhatsApp business API. However, If you have more contacts, you might have more customer inquiries and support requests, leading to more user-initiated service conversations. And that can be cheaper than business-initiated ones.

Cost Optimisation Tips

1. Leverage free entry-point conversation effectively

Free entry points like the “Click-to WhatsApp” button on your websites, ad, or Social media page allow free conversation for 72 hours. Likewise, clicking the WhatsApp profile line or QR code allows free conversation for 24 hours.

In both cases, the users initiate the conversation, so it’s a great way to optimise cost and engage with the users.

Therefore, make the most of these entry points.

Welcome the users with relevant and personalised greetings. Highlight the benefits they will get by engaging with you and then prompt them to respond with specific requests.

Also, make sure to engage swiftly within the free window to avoid incurring charges.

Offer value by addressing their pain points or offer relevant information only available through WhatsApp. Ask relevant questions to tailor your response and guide them towards relevant solutions.

2. Segment your audience and target message accordingly

Sending relevant messages to target groups ensures higher engagement and impact. Also reduces the need for frequent follow-ups, saving you money.

Therefore, outline who your ideal customers are. You can consider demographics like age, location, profession, and interest. Then collect information about their behaviours. It can be their website behaviour, purchase history, or survey responses. After that, create a detailed profile for each audience segment keeping in mind their characteristics, needs and pain points.

Create targeted messages based on the particular needs and interests of your recipients. It will lead to higher click-through rates, purchases or other desired actions. And that translates to a better return on your marketing investment.

3. Utilise automation for repetitive tasks

When you strategically use automation for repetitive tasks, you can free up your agents for more complex inquiries and personalised interactions. That reduces the need for additional staff, leading to direct cost savings.

There are several ways you can automate WhatsApp Business API.

• Use chatbots to answer specific questions, collect data or guide users through simple processes. AI-powered chatbots can even help deal with more complex interactions.
• Use message templates like greeting manager, order confirmation, shipping updates, FAQs, etc.
• You can connect WhatsApp API with your CRM to automate conversations, update information, and streamline workflow.
• Integrate logistic and tracking platforms to automate shipping updates and delivery notifications. It can be efficient and reduce costs in the long run.

4. Track and analyse your usage data to identify cost-saving opportunities

Carefully monitoring and managing your WhatsApp Business API usage can help you significantly reduce your expenses and maximise your return on investment.

So, keep track of basic usage statistics like message volume and delivery status by utilising response rate, message open rate, session length, opt-out rate, etc using built-in tools.

Using third-party platforms like Verloop.io offers more insights and reporting tools especially designed for WhatsApp Business API.

It helps you identify areas of improvement. Also, identify at-risk customers and take proactive measures to retain them. 

Similarly, the analysis helps make informed decisions about messaging strategies. You can avoid costly trial-and-error approaches and save money and time.

Additional consideration

1. Address potential hidden costs like WhatsApp Business Solution Provider (BSP) fees

Hidden costs can be a concern when choosing a WhatsApp Business Solution Provider. It can strain your financial resources and potentially disrupt your operational workflow. Therefore, to avoid such unpleasant surprises down the line, do careful research.

• Compare different BSPs and their pricing models. Reviews and testimonials from other businesses can be great sources.
• Communicate your needs and goals to the BSPs and ask for their offerings. See If there are any monthly fees beyond WhatsApp charges, set-up fees, cost of additional features, data shortage, etc.
• Analyse your monthly usage and compare it to the quoted price.
• You can also opt for all-inclusive pricing. It covers all your needs and prevents hidden costs.

2. Highlight the importance of understanding your business needs and target audience before choosing a pricing plan

Choosing the right WhatsApp Business API plan requires careful consideration of both your business needs and your customers’ preferences. 

It’s essential to avoid paying for unused features while ensuring your messages resonate with your audience and keep them engaged. To achieve this, prioritise your primary goals (e.g., lead generation, customer support) and identify the features that best support them. 

Remember, the four conversation categories (marketing, utility, authentication, and service) each have different pricing implications. So understanding their usage within your strategy is crucial.

While you should start with a plan that fits your current needs, be prepared to adjust as your business grows. 

This might involve upgrading to a plan with more features or simply adding additional users. 

Keep in mind that the key lies in understanding your business and your customers. By carefully evaluating your goals and aligning them with a fitting plan, you can leverage the power of WhatsApp Business API to enhance communication, engagement, and ultimately, your success.

Resources 

You can check out the conversation rates here according to your market, currency, and conversation category.

Boost your customer engagement with Verloop.io’s WhatsApp Business API. Our seamless integration connects your CRM, helpdesk, or other tools, ensuring smooth data flow and automated workflows. Stay compliant with evolving WhatsApp policies while Verloop.io takes care of everything. Book a demo to unlock valuable insights and personalised solutions to achieve your unique goals.