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SMS Marketing -Pricing Plans

by cagwatson
15 replies
Hi Warriors


I'm looking for some guidance from anyone currently doing SMS marketing.
I have a reseller account set up and some marketing material in draft ready to distribute however I'm still hung up on the pricing element.
My reseller account offers low cost sms packages (1000,2500 etc) that I'll simply pass through charges to the customer (no additional premiums on top) so that I can guarantee the lowest cost per Txt.

But what should I charge actually them per month (my margin)?
A: for access to the platform from which they can manage their campaigns
B: I manage the platform and their campaigns for them

I see some US warriors charging $79 USD / £49, however I'm wondering if this whole idea is actually going to be that lucrative as it would take around 50+ clients at those prices to get near my target income from this business.

I'm in the UK so I'd appreciate some views from UK based warriors too.

Thanks
#marketing #plans #pricing #sms
  • Profile picture of the author allcash830
    I've done it with a sign up special. $49 per month for the first 3 months then $89 per month for a 12 month contract. Works really well here in the states.
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  • Profile picture of the author TrumpiaTim
    If you feel tapped out on the SMS side, have you considered offering additional add-ons or side services, like web design and SEO management to increase your revenue?
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    Trumpia: The Most Completed SMS Text Messaging Software & API Solution.
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  • Profile picture of the author cagwatson
    i've not actually offered the SMS service as yet, just trying to get a decent pricing structure together before i do, hence trying to gauge what others are pricing this at.

    Im looking for this part of the business to generate a decent marging before any upsell.

    btw, do you offer the trumpia services in the UK? couldnt really make out from your site, seems USA based only...
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    • Profile picture of the author TrumpiaTim
      Originally Posted by cagwatson View Post

      i've not actually offered the SMS service as yet, just trying to get a decent pricing structure together before i do, hence trying to gauge what others are pricing this at.

      Im looking for this part of the business to generate a decent marging before any upsell.

      btw, do you offer the trumpia services in the UK? couldnt really make out from your site, seems USA based only...
      Trumpia is currently USA based, however we should be opening our gateway to both the UK and Canada by mid-August.
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      www.Trumpia.com

      Trumpia: The Most Completed SMS Text Messaging Software & API Solution.
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  • Profile picture of the author TheKeys
    You and/or we can never guarantee that you're going to make X amount of money. That is determined by your landing page, where you are advertising, keywords, price. Hundreds of factors are added into this.

    My advice to you would be to try out other lucrative methods. One could be purchasing banner space on a very popular forum related to your niche as they usually contribute to a lot of impressions.
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    • Profile picture of the author jimbo13
      [DELETED]
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      • Profile picture of the author cagwatson
        its a reseller program completely branded with my company, whereby i can resell packages to clients to access the platform, or we can manage on their behalf.

        so white label
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    • Profile picture of the author cagwatson
      Absolutely, that's not the point though. I've already got other income streams, im just interested in building this business for as much margin as i can, prior to any upsells, to ascertain whether its something i should take forward.

      If it doesn't look like generating enough when compared to my time dedicated to managing a large customer base on this service alone then i won't be investing.

      it's a new venture hence the due diligence


      Originally Posted by TheKeys View Post

      You and/or we can never guarantee that you're going to make X amount of money. That is determined by your landing page, where you are advertising, keywords, price. Hundreds of factors are added into this.

      My advice to you would be to try out other lucrative methods. One could be purchasing banner space on a very popular forum related to your niche as they usually contribute to a lot of impressions.
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      • Profile picture of the author S3Ware
        My personal opinion is that if you are selling SMS marketing, SEO, mobile websites or any other commoditized service, you are shooting yourself in the foot. We are marketers selling solutions. SMS in this case is the platform but the solution is providing a powerful way for businesses to generate more revenue from new and existing customers.

        The platforms will always change. The marketing principles remain the same.

        My clients have no idea how much a text message costs, nor do they care. They pay me for solutions and the marketing knowledge I bring to the table.

        There's an old story about this. I forget the specifics, but it's something like this ...

        A repairman gets called for an emergency repair. The customer's "widget" machine is down and he is losing money every minute the machine is not running. The repairman shows up, examines the machine, takes out a screwdriver, tightens a screw and fires up the machine, which starts up and runs perfectly. He then hands a bill to the customer for $1000.

        The shocked customer says, "All you did is turn a screw! I'm not paying you $1000 for that!"

        To which the repairman replies, "You're not paying me $1000 for turning a screw, you're paying me $1000 for knowing which screw to turn."

        Any local business owner could go around us and sign up directly for any number of SMS marketing platforms. So why do they need us? Because we know which screw to turn to make it all work.

        Don't undervalue yourself (as I think too many IMers selling to local businesses do). As long as the value of your solution is more than the cost to the customer, there is virtually no limit to what you can charge. And, it becomes very difficult for the next guy to come along and say, "I can do it for less."

        My 2 cents, FWIW.
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        • Profile picture of the author jsamplesjr
          Originally Posted by baib21 View Post

          My personal opinion is that if you are selling SMS marketing, SEO, mobile websites or any other commoditized service, you are shooting yourself in the foot. We are marketers selling solutions. SMS in this case is the platform but the solution is providing a powerful way for businesses to generate more revenue from new and existing customers.

          The platforms will always change. The marketing principles remain the same.

          My clients have no idea how much a text message costs, nor do they care. They pay me for solutions and the marketing knowledge I bring to the table.

          There's an old story about this. I forget the specifics, but it's something like this ...

          A repairman gets called for an emergency repair. The customer's "widget" machine is down and he is losing money every minute the machine is not running. The repairman shows up, examines the machine, takes out a screwdriver, tightens a screw and fires up the machine, which starts up and runs perfectly. He then hands a bill to the customer for $1000.

          The shocked customer says, "All you did is turn a screw! I'm not paying you $1000 for that!"

          To which the repairman replies, "You're not paying me $1000 for turning a screw, you're paying me $1000 for knowing which screw to turn."

          Any local business owner could go around us and sign up directly for any number of SMS marketing platforms. So why do they need us? Because we know which screw to turn to make it all work.

          Don't undervalue yourself (as I think too many IMers selling to local businesses do). As long as the value of your solution is more than the cost to the customer, there is virtually no limit to what you can charge. And, it becomes very difficult for the next guy to come along and say, "I can do it for less."

          My 2 cents, FWIW.

          Thank you, this was very well said...
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  • Profile picture of the author alecr45
    I see people selling SMS services for a huge range in pricing. Some peoples lowest package is the $69-$79 a month range..where others advise starting at $197+.

    I think that people are having success with different pricing models because there isn't tons of competition yet.

    I am in the process of starting a SMS marketing company locally and I am interested in brainstorming with likeminded Warriors to swap ideas back and forth. I'm new so I can't PM, but you can catch me on Skype at alecr45.
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  • Profile picture of the author Sondor
    You can add on installation fees, training fees, and of course a monthly premium to the base rate. For example, $299 for installation and 2 hours training. $99 monthly base rate.

    At the end of the day (and I've looked into all the major SMS providers) it's a good tool in the upsell arsenal, but no company that I've found leaves enough 'meat on the bone' to justify marketing just SMS as a stand-alone.

    Good foot in the door product and upsell product though.

    My 2-cents...
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  • Profile picture of the author Stormcrow
    Hi,


    I run a mobile marketing business in the UK so can give you a few words of advice.

    Firstly, what Baib21 says above is true, you will always be able to make more money selling solutions rather than selling a service. We are actively developing the solutions element of our business and have a few innovative offerings that I haven’t seen offered elsewhere (at least in the UK). However the way we have done this is that these are additional services that we upsell to our existing customers.

    Before offering these services we get customers on board with a self-service SMS marketing option where they pay a setup fee plus a monthly recurring charge to hire a keyword on our shortcode number. They then pay per text (which are bought in various sized bundles) and again we make a slight markup here compared to the wholesale prices we buy them for.

    This approach has meant that we can offer a relatively low-cost lead in to our other services with the self-service SMS being one of our lead products – the other one is mobile websites. And, as I mentioned, we offer our customers various upsells including “solutions” after they have joined. However this is all done in a very transparent way.


    It already looks like you’ve run the numbers and worked out for yourself that the monthly customer value you can get from providing the SMS service alone (your option A) is actually pretty low and that you would need an awful lot of customers to make it worthwhile. On the other hand, when we offer a campaign management service to our customers (your option B) then the price for this is always tailored to what they need and the time we think it will require from us. As requirements and expectations vary so much I would find it difficult to set a fixed price for this providing this.

    We looked in to charging per subscriber as Jimbo13 mentioned, but this just seemed too complicated a model to manage on an on-going basis

    We also offer a commission based sales model to anyone who can generate sales for us, both on the SMS side (currently UK only) and for our mobile websites (works anywhere). This is working well so far and might be a better option for you than going it alone, depending on what you want to achieve. If you, or anyone else is interested in this just send me a PM or make a post below and I’ll check back here every so often.
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  • Profile picture of the author Pankaj90
    i wanted to know is it possible to target audience in sms marketing?
    thanx
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    • Profile picture of the author ladymd
      Originally Posted by Pankaj90 View Post

      i wanted to know is it possible to target audience in sms marketing?
      thanx
      Good question, I've actually seen a lot of people ask this before. I think you can use SMS just like any other marketing tool. What's cool about SMS marketing is that you can not only target whoever you want, but because the list is opten in you get a captive audience and higher response rate.

      -Just my two cents...hope this helps!
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      • Profile picture of the author JennyTxtlocal
        Hello,

        Jenny here from Txtlocal in the UK. Our White Label system allows users to purchase SMS credits at a preferential rate then users can sell them on to their clients at whatever cost they like.

        We do of course recommend that you look at competitors, so that you are not over charging your customers, for example credits from mobile marketing companies in the UK range from 2.6pence all the way up to 9pence. There are various factors that determine these costs of course, usually based on send volume and bulk buying.

        I believe it would be difficult to put a price on managing campaigns for customers as it is so easy for them to do it themselves, and if you are going down this route, then I would just create separate accounts with a provider, for each of your customers. This will save you the White Label set up costs... if your customers aren't going to see their accounts, then why does it have to be White Labelled?

        I hope this helps, if you have any questions or would like a trial account with us, please let me know J
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