[jlazarus17]

I'm having a hard time wrapping my head around the business model. For example, let's say a popular restaurant/bar has a 2000 subscriber opt in list. They send out 4 messages per month - once a week. That's 8000 messages - what type of rates are they willing to pay?

I realize there is value added to managed campaigns, but I'm just not sure, in my area, that businesses would be willing to pay $400-$500 a month for the service - and surely the rates would need to be in that ball park to make a reasonable profit?

Maybe I'm thinking this wrong and they should only be sending out 2000-3000 messages a month, based on more targeted campaigns to subsets....but still, seems like even with targeting, they're gonna hit everyone once, plus a few segregated blasts - so maybe it comes out to more like 5-6000 messages per month. If I charge $300 per month for a managed campaign that includes 6000 messages (plus time for campaign management), I'm not making much profit there...but I'm not sure that businesses in my area would be willing to pay MORE than $300 or so a month. Managed campaigns take *time* (my time). But I'm leery to just offer a business a platform (self managed), because I truly don't think they'd manage it correctly.

How much time are you SMS vets putting into a typical monthly managed campaign?

[mcfcok]

HypeText is your man to get some good advice off re: managed campaigns.

Here in the UK it's slightly different, it's on a platform pay as you go service no contracts/ monthly fees low price credits. The 2 biggest companies offer to manage campaigns for free if new customers want them to do their campaigns.... how mad is that.

If you do it via a platform i suggest you really educate new customers on how to make the most of their campaigns otherwise like you said they will mess it up.

[jlazarus17]

Thanks, Mcfcok - Hopefully some seasoned vets, like HypeText, will offer some input!

You're right though - that seems nuts to offer managed campaigns for free. But I also see the underlying reason - if clients aren't trained properly, their ROI is out the window....

[mcfcok]

Originally Posted by jlazarus17

Thanks, Mcfcok - Hopefully some seasoned vets, like HypeText, will offer some input!

You're right though - that seems nuts to offer managed campaigns for free. But I also see the underlying reason - if clients aren't trained properly, their ROI is out the window....

They also have the resources to do it mate, textlocal have around 85000 customers in the UK so they have employees who can do this for clients they turnover millions per year.

Hope you find the right model

[WillR]

Using your example above, let's say the business had 2,000 subscribers. You then wanted to message all of those subscribers once every week -- this is a good sort of benchmark figure to start with. Based on the feedback you receive you may want to make it 5-6 messages a month or back it down to only 3. But let's use 4 for this example.

Let's say you are using a service that charges around 2 cents per message (some will cost more, some will cost less).

8,000 x $0.02 = $160

Now how much do you think you could charge that business per month to provide that hosted SMS service for them? Even at $450 that would be nearly a $300 profit for you -- that equates to you being paid around $70 per message you send out for them which will take you all of 10 minutes to do.

If you have 50 clients per month then your profit would be:

$290 x 50 = $14,500

You can see how quickly the numbers add up. If a business had 2,000 subscribers though I would be charging them more than $450/month so the figures above would be even higher. You need to look at the value you are brining in to their business and price accordingly.

[jlazarus17]

Originally Posted by WillR

Let's say you are using a service that charges around 2 cents per message (some will cost more, some will cost less).

8,000 x $0.02 = $160

Now how much do you think you could charge that business per month to provide that hosted SMS service for them? Even at $450 that would be nearly a $300 profit for you -- that equates to you being paid around $70 per message you send out for them which will take you all of 10 minutes to do.

I'm just wondering if my local market would support $450 a month for the service (based on the factors we listed). Maybe....(I'm in the south...in a somewhat rural suburb area of a less than progressive southern city.)

But 10 minutes? I mean, I know sending the message itself doesn't take time, but discussing the campaign, tailoring it, tracking opt-ins, tracking coupon redemption, analyzing the data, etc...would take considerably more time. I agree that with 50 clients per month there's money to be made, but let's say I spend 4 hours per month per client - that's 200 hours per month. That's a lot, lol! I know 4 hours doesn't seem like much, but by the time you meet, or talk on the phone to discuss campaigns, run the campaigns, run reports, do the actual analysis and then meet to discuss end results, plan next campaign, I can easily see where 4 hours would go rather quickly!

And, actually, I'd like 100 clients ;-) We have 10 small suburbs in my area that I think would be good targets - my goal would be to have 10 clients in each (may take a couple years, but gotta have target projections). I'm just guessing that if I was successful, I'd be paying someone else to help, or working way harder than I intend ;-)

Thank you for your input! I'm processing....;-)

[mossyrocks]

Originally Posted by WillR

Using your example above, let's say the business had 2,000 subscribers. You then wanted to message all of those subscribers once every week -- this is a good sort of benchmark figure to start with. Based on the feedback you receive you may want to make it 5-6 messages a month or back it down to only 3. But let's use 4 for this example.

Let's say you are using a service that charges around 2 cents per message (some will cost more, some will cost less).

8,000 x $0.02 = $160

Now how much do you think you could charge that business per month to provide that hosted SMS service for them? Even at $450 that would be nearly a $300 profit for you -- that equates to you being paid around $70 per message you send out for them which will take you all of 10 minutes to do.

If you have 50 clients per month then your profit would be:

$290 x 50 = $14,500

You can see how quickly the numbers add up. If a business had 2,000 subscribers though I would be charging them more than $450/month so the figures above would be even higher. You need to look at the value you are brining in to their business and price accordingly.

Hi Will,

What SMS' services charge around 2c in Australia?

Thanks,

Chris

[WillR]

Originally Posted by jlazarus17

I'm just wondering if my local market would support $450 a month for the service (based on the factors we listed). Maybe....(I'm in the south...in a somewhat rural suburb area of a less than progressive southern city.)

The price you charge should not be dependent so much on location but on the results you can bring that business. If you are able to setup a text campaign that brings a business over $1,000 worth of new sales each month then do you think they wouldn't be willing to spend $500 to make that $1,000? You also need to remember you are building a list at the same time so even if the campaign was only bringing in the same amount of money as they were paying you, it's still a win because of that buyers list they are building.

Originally Posted by jlazarus17

But 10 minutes? I mean, I know sending the message itself doesn't take time, but discussing the campaign, tailoring it, tracking opt-ins, tracking coupon redemption, analyzing the data, etc...would take considerably more time. I agree that with 50 clients per month there's money to be made, but let's say I spend 4 hours per month per client - that's 200 hours per month. That's a lot, lol! I know 4 hours doesn't seem like much, but by the time you meet, or talk on the phone to discuss campaigns, run the campaigns, run reports, do the actual analysis and then meet to discuss end results, plan next campaign, I can easily see where 4 hours would go rather quickly!

I sure wouldn't be spending anywhere near 4 hours a month per client. If they want that type of extra attention then they will pay more for it. They would simply send me through their offer each week, I would tweak it and create a message, and blast it out to the list. The only results you need to know about are the people coming through the door showing that message on their phone. That's all that matters.

[mrtrance]

Originally Posted by WillR

The only results you need to know about are the people coming through the door showing that message on their phone. That's all that matters.

What would be the best way to keep tracking of how many people did come in for that blast that was done for that day of the week?

Also when doing a blast for a restaurant what time of the day would be best to blast the message? I'm assuming from what others have said is to pick 1 day of the week that the owner knows is slow night (like Tuesday or Thursday) and then maybe send it out like around 3pm or even earlier on that day?

Also would the offer only be valid fro that day/night I assume and to get that deal the customer would just need to show the txt message that they received from the blast correct?

[HypeText]

Every market will support a different level of service. I can tell you that $450 a month for a managed SMS Campaign is a little steep.

If you want to get a better idea of what your area will support, Try this...

Call your Local Newspaper and ask them what a 3 Column inch Display Ad will cost to be run on a Sunday...just once.

Pick up a copy of that paper and look for all the small square display ads in your paper, in the Sunday Edition.

Everyone one of those Businesses is paying Several Hundred Dollars for that little ad which is being run just once.

Still think they wouldnt be willing to pay a similar amount for a Marketing Campaign that runs a full 30 days?

Don't fall prey to THINKING you know what Businesses are willing to pay...the truth may just surprise you.

Do your research...then set your Rates & Fees accordingly...

[WillR]

Originally Posted by HypeText

Every market will support a different level of service. I can tell you that $450 a month for a managed SMS Campaign is a little steep.

As I said, you can't just make a general judgement call like that. It depends on the size of their list (obviously you are not going to charge the same for someone who has a list of 1,000 prospects compared to 4,000 prospects) and it also depends heavily (for me) on the value you are able to bring into their business via that SMS campaign.

If you are consistently bringing in over $1,000 worth of new business through the door each month then you are under-selling yourself to be charging anything less than $450 - $500... and a business owner would be nuts not to spend that type of money to more than double it each month... and build a list of hungry buyers at the same time.

At $450/month that breaks down to a little over $100 per week and frankly, if you aren't able to bring in at least that amount of new business each week then you seriously need to re-evaluate your campaign. Obviously things will be a bit slower at the start as your grow the list but it should not take long to see those results and much better.

I also know from experience that quoting any sort of estimated sales figures up front can only lead to problems down the line. I much prefer to setup campaigns on a trial fee for only a few hundred dollars and once their list reaches the agreed amount of members, we then re-evaluate things and I either get a flat fee or a share of the profits. A lot of business owners like the profit split deal because they know they don't have to pay you anything unless you are bringing them real results.

If you go the profit split deal then obviously you need to have quite a good relationship with the business owner in that they will be honest in the figures they report for those sms promotions.

That's just my way of doing things though and may not be for everyone.