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Unread 7th May 2012, 03:59 PM   #1
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SMS Marketing - Lucrative or not?
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Hello fellow Warriors,

I am currently planning on launching my SMS marketing services here in Canada, but I was wondering if it really is a lucrative business model. I need your help and suggestions.

I decided to go with Lime Cellular's platform. However, the prices here in Canada are just too ridiculous. The Canadian carriers are money-whores. Rogers, Bell and company. It's not surprising. Even our Internet and Mobile services are too damn expensive compared to the ones in US. I can't wait for some other company to step in and show those pricks what real value is.

Anyway, back to the main subject. For the starter plan, the price I will be paying with Lime is $149 per month. With this plan, I will be getting 2,000 text credits. Each additional text credit is $0.0275.

To start off, I was thinking off charging every client a $45 set-up fee and giving one free month. I might lose some money at first, but I will try to catch up later. Then, I will charge them $150 per month for 1,000 text credits. If they want more text credits, I will sell them at $0.05 each. I will also offer more plans later, such as maybe $250 for 2,000 text credits, but that will be for later when I'll upgrade my own plan with Lime.

Any thoughts? Do you think this is a lucrative business model?
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Unread 7th May 2012, 09:17 PM   #2
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Re: SMS Marketing - Lucrative or not?
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2000 texts for $149? That's 7 cents for each text???

Just use Twilio and get them for a penny each, pay as you go. 7X cheaper.

And charge a bigger set up fee. $45 is pretty slim for setting them up with a killer voice and text system. Charge at least $149 to set up. First 30 days free is fine while they build their list up. SMS can be a very profitable model. Help the biz owner in the beginning to make it successful, then slowly wean yourself away from it and bill them monthly.
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Unread 7th May 2012, 10:14 PM   #3
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Re: SMS Marketing - Lucrative or not?
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Is Twilio only one cent in Canada? The carriers there charge really high prices.

Lirikh, I am with Lime also. And I checked out the Canada prices. My thought to you is to think very hard about going with the higher Plan. It will reduce your cost per text a lot, and give you more credits. So, you can sell more texts before paying the overage from your plan. And be able to sell them cheaper while making the same profit. Run the numbers on your cost.

I sell 4000 texts for $295 on a managed plan. I plan and send all the texts for the client. My cost is $297 for 15,000 texts. So, one account pays the entire bill. And I have another 11,000 texts to sell before it costs me more. So, I can nearly sell 3 more clients before overages accrue. And they are cheaper than the plan text cost.

So yes, it can be lucratative. The more texts you buy the less each costs. And the more you make on each.
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Unread 8th May 2012, 01:04 AM   #4
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Re: SMS Marketing - Lucrative or not?
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Thank you guys for your advices.

@xlfutur1

Yeah I was thinking of using longcodes instead due to their lesser price. This way, I could setup voice systems for my clients and at the same time increase their SMS list with the opt-in feature that could be included in the voice system.

However, the niche I specialize in is nightlife. I already have some clients lined up. I need a shortcode to be able to advertise more properly with them. For instance, including "Text CLUB to 12345 for future event news and promotions" on their flyers, etc. Moreover, I would need to send a high amount of text messages as time passes on, and Twilio can only support 1 text per second -- 3,600 texts per minute, but I heard the maximum limit is 600 texts per hour, so I'm not sure here. Maybe for dentists, restaurants and other small businesses, I could use longcodes.

@Rymico

I agree with you, but I'm afraid I won't be able to spend all those credits in one month and not cover my costs effectively. That's why I chose the starter plan just to start and see how it goes. I want to test the market first, get results, and then go all in. Also, I'm on a really tight budget that's why I want to start with the starter plan. But looking at your prices, I don't think I'll be able to sell that low. At $479, I would get 12,000 text credits. If I charge $295 for 4,00 text credits, I would make $885 at merely 2x ROI, which is far from your almost 4x ROI. This makes me think even more that SMS shortcode marketing is not lucrative in Canada, unless you're on tier1. Maybe it is only good to show value and build more reputation.

I'm really not sure now. I want to invest in Twilio as well, and sell to small businesses such as dentists and restaurants -- not sure if I'll have time since I already some nightclubs lined up to use my sms services.

I think I'll start with Lime and the nightclubs, and see how it goes -- mostly for experience. Then gradually move into the longcodes sector and small businesses, or maybe shortcodes are going to be successful enough that I won't even have time for small businesses.

Or even yet, I could start with Twilio and setup a voice system for my nightclub client and include an SMS opt-in to see the results from people that are calling. "Press 4 to subscribe to our texting list and receive our news events and promotions". Then, is it possible (and legal) to import this list into my shortcode platform?

Again, I appreciate your help guys, thank you!
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Unread 8th May 2012, 02:07 PM   #5
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Re: SMS Marketing - Lucrative or not?
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lirikh, can you email on this.. I just found this site and do not have enough posts for PM. I think you looked at some numbers wrong and your cost per text is much lower.

My email for this would be RodneyYoungatrymico.com
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Unread 8th May 2012, 02:42 PM   #6
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Re: SMS Marketing - Lucrative or not?
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In Canada, there are a few carriers - not cheap, but cheaper than that.

EZ Texting gives shortcodes and the lowest cost is 5 cents per, goes lower from there: Ez Texting Group SMS Pricing (not an affiliate link).

Amber
PS - also their customer service is quite good.


Last edited on 8th May 2012 at 02:54 PM. Reason: added ps
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Unread 8th May 2012, 02:54 PM   #7
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Re: SMS Marketing - Lucrative or not?
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Rymico, an email.sent


Originally Posted by Amber Jalink View Post

In Canada, there are a few carriers - not cheap, but cheaper than that.

EZ Texting gives shortcodes and the lowest cost is 5 cents per, goes lower from there: Ez Texting Group SMS Pricing (not an affiliate link).
5 cents is not cheaper than 2.75 cents, so I don't think there are shortcode carriers cheaper than Lime in Canada.
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Unread 8th May 2012, 03:09 PM   #8
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Re: SMS Marketing - Lucrative or not?
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Originally Posted by xlfutur1 View Post

2000 texts for $149? That's 7 cents for each text???

Just use Twilio and get them for a penny each, pay as you go. 7X cheaper.

And charge a bigger set up fee. $45 is pretty slim for setting them up with a killer voice and text system. Charge at least $149 to set up. First 30 days free is fine while they build their list up. SMS can be a very profitable model. Help the biz owner in the beginning to make it successful, then slowly wean yourself away from it and bill them monthly.
Originally Posted by lirikh View Post

Rymico, an email.sent


5 cents is not cheaper than 2.75 cents, so I don't think there are shortcode carriers cheaper than Lime in Canada.

Actually eztexting IS cheaper slightly:

2000 credits for $149 = simple math. $149 divided by 2000 = .0745 per credit.

Eztexting: even if you took the same $149 package, you would get 3 keywords, plus 3300 credits (= .0415 cents per credit).

Extra credits: 4 cents/express message
2 cents/standard message

However - I do like some of the features Lime has. They weren't around when I was looking for someone last year.

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