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Best Options in SMS Pricing Structure - Per Subscriber & Set-up fees, roll-overs?

by Pestew
26 replies
I have pricing challenges that I have not seen discussed in any threads:

A) I have read in other threads that both "per subscriber" or 'per text" is talked about as options to charge the client. In various WSO's I have bought, both options are also suggested. Seems like there may be a physiological advantage to charge per subscriber verses per text.

B) Set up fees are another area that it is not clear. If a client comes in at a basic set-up plan then upgrades later to a larger plan according to the size of his subscribers, do you again charge another set up fee according to your pricing structure?

C) If you charge per text or an allotment for so many texts, do you allow for a roll over for any unused texts?

I am curious how other Warriors view these issues, -Pete
#fees #options #pricing #rollovers #setup #sms #structure #subscriber
  • Profile picture of the author BKH
    The platform that I use would make it difficult to charge per sub because I am charged per message from my platform. I could charge on a sub base but I would be taking a gamble that the client isn't going to want to send ten messages a day to 50 subs. I'd go broke with just one client like that. So I think a lot depends on your platform.

    Set-up fees - I don't charge set-up fees at all! To me I see one hit wonder written all over it and lets be honest how much do you charge to spend 2-5 minutes setting someone up. I do charge management fees ($150) to my clients to send their messages out as well as plan change fees ($10). It's pure profit on top of my mark-up on the messages and keywords.

    I have two options for my clients here, $.10 for rollover or $.07 for an allotment. This of course pushes a lot of the clients to go with the allotment which pays me for messages even if their not sent so the profit is pretty much square on average and a slow message month turns me a higher profit.

    Goodluck,
    b
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    • Profile picture of the author BKH
      Not to add more confusion to the mix but there is also the pricing structure of charging only for a keyword. For example I charge a real estate company $10 per keyword (listing) to have only an auto response go out to the user. (Meaning an agent puts the add on their yard sign and has a description, price and link to their site sent when someone text the keyword. It also automatically sends a text to the agent letting them know someone is looking at the property so they can call them.)
      I max the number of auto responses to 50 per keyword which only costs me $2 per keyword and $2 for the messages if they use all 50 (hasn't happened yet). The average listing agent has 6 listings so that's $36 profit and the only time I have to do anything is when they sell the house (typically 3 months), or add a new listing.

      This pricing structure I only use in this scenario but I'm sure the brilliant warriors can find more useful ways of implementing it.
      Again Goodluck,
      b
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      • Profile picture of the author scarab
        I have never considered either one of the methods to have an advantage or disadvantage. By subscriber I am assuming you are talking about phone numbers on a list right? What if a subscriber join 2 or 3 different lists of a client? Charge the client for each subscriber on each list?

        You would have to be sure to price that model so that your cost on the number of messages sent didn't add up to be more cost than you were charging per subscriber. i.e .10 per month per customer wouldn't get it. That shouldn't be hard to do thought with wholsale messages being very low. YOu could actually make money at 1.00 per month per subscriber. I'm sure you could charge more or even less depending on the type of clients you have.

        If you go the subscriber route I think it would be better if you managed the campaigns for the clients and charge a little more than 1.00 per susbcriber. I would be interested in what you decide and how it works out.
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        • Profile picture of the author Pestew
          Originally Posted by scarab View Post

          I have never considered either one of the methods to have an advantage or disadvantage. By subscriber I am assuming you are talking about phone numbers on a list right? What if a subscriber join 2 or 3 different lists of a client? Charge the client for each subscriber on each list?
          He still gets charged per subscriber. He gets just as many texts I would think.
          Originally Posted by scarab View Post

          You would have to be sure to price that model so that your cost on the number of messages sent didn't add up to be more cost than you were charging per subscriber. i.e .10 per month per customer wouldn't get it. That shouldn't be hard to do thought with wholsale messages being very low. YOu could actually make money at 1.00 per month per subscriber. I'm sure you could charge more or even less depending on the type of clients you have.
          Yes, I personally am liking the cost per subscriber method. It just seems more simplistic in nature especially if you are going the fully managed service route.
          Originally Posted by scarab View Post

          If you go the subscriber route I think it would be better if you managed the campaigns for the clients and charge a little more than 1.00 per susbcriber. I would be interested in what you decide and how it works out.

          Maybe to charge 2.00 per subscriber up to the first 100 then drop down in increments after that. Say 1.00 till 250 is met then .75 at 500 and so on. This way the client has another incentive to build up the list besides more business.

          I would say with the cost per message method, it seems like it would turn your service more into a commodity in which down the road they will want to shop your prices against what ever they can find especially after you have spent all the time teaching them and helping them build their list.

          Also, I think above all it's imperative to keep things as simple as possible. The client will shy away if he starts seeing complicated billing schematics.


          Thanks scarab, -Pete
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          • Profile picture of the author BrashImpact
            Peter,
            i don't have all the answers but will share with since you hit the nail
            on the head that all warriors are continuing to face day in and day out.

            I recognized this hole in the system back in September of last year
            and posted on it at the beginning of October. Now 11 months later
            we are close to providing a simple solution for Warriors, Consultants and Sales People.

            Launching Oct 1, 2011 but here is the simple pricing structure as our entire platform
            is geared only to People like yourself, we are not marketing to the end business owner at
            all.

            -$47 for one keyword - It includes 3000 texts and you pay overage at 1.2 cents per text
            -This is a Short Code 53160 with the intention of adding more over the next 12 months
            - You can create unlimited Sub Keywords per client for $15 a month...

            You own the keyword PIZZA and want to run 20 different campaigns for a client

            Starting with the Keyword PIZZA place any word behind it to designate it to a campaign.

            Pizza-Tv
            Pizza-Table
            Pizza-Coupon
            Pizza-Contest

            You get the idea... I charge clients $10 per month per campaign and a flat rate with no set up charge...

            Example - Joes Restaurant - $197 per month and that includes 3000 texts. If they go over that amount you would bill them at lets say 2 cents per text overage. Your only paying 1.2 cents on overage. If i set up 10 campaigns for them, that's an additional $100 bringing their monthly total to $297 my costs are $47 + $15 for a total of $63 the rest is all Profit and if they go over, which they will if your running more campaigns for them, they love you. Your Profit is $234 per month Net.

            There is no reason to keep charging clients these Big Set Up Fees... Focus more on getting HUGE RESULTS FOR THEM.

            Anyhow...our system is geared for consultants and sales people like yourself. With a 100% white label system, that costs you Nothing to implement. The more success you have the better off we are. It's a win win situation.

            Need more details...Feel free to PM me. The Affiliate Program will Launch Sept 15, Product for you to market Oct 1st.

            Regards,
            Robert Nelson
            Mobile Fusion Texting
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            • Profile picture of the author Pestew
              Originally Posted by BrashImpact View Post

              Peter,
              i don't have all the answers but will share with since you hit the nail
              on the head that all warriors are continuing to face day in and day out.

              I recognized this hole in the system back in September of last year
              and posted on it at the beginning of October. Now 11 months later
              we are close to providing a simple solution for Warriors, Consultants and Sales People.

              Launching Oct 1, 2011 but here is the simple pricing structure as our entire platform
              is geared only to People like yourself, we are not marketing to the end business owner at
              all.

              -$47 for one keyword - It includes 3000 texts and you pay overage at 1.2 cents per text
              -This is a Short Code 53160 with the intention of adding more over the next 12 months
              - You can create unlimited Sub Keywords per client for $15 a month...

              You own the keyword PIZZA and want to run 20 different campaigns for a client

              Starting with the Keyword PIZZA place any word behind it to designate it to a campaign.

              Pizza-Tv
              Pizza-Table
              Pizza-Coupon
              Pizza-Contest

              You get the idea... I charge clients $10 per month per campaign and a flat rate with no set up charge...

              Example - Joes Restaurant - $197 per month and that includes 3000 texts. If they go over that amount you would bill them at lets say 2 cents per text overage. Your only paying 1.2 cents on overage. If i set up 10 campaigns for them, that's an additional $100 bringing their monthly total to $297 my costs are $47 + $15 for a total of $63 the rest is all Profit and if they go over, which they will if your running more campaigns for them, they love you. Your Profit is $234 per month Net.

              There is no reason to keep charging clients these Big Set Up Fees... Focus more on getting HUGE RESULTS FOR THEM.

              Anyhow...our system is geared for consultants and sales people like yourself. With a 100% white label system, that costs you Nothing to implement. The more success you have the better off we are. It's a win win situation.

              Need more details...Feel free to PM me. The Affiliate Program will Launch Sept 15, Product for you to market Oct 1st.

              Regards,
              Robert Nelson
              Mobile Fusion Texting
              Sounds quite interesting, judging by your last WSO, I'm sure it will be very thoroughly thought out. Wish you well on your launch! Thanks Robert!
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    • Profile picture of the author Pestew
      Originally Posted by BKH View Post

      The platform that I use would make it difficult to charge per sub because I am charged per message from my platform. I could charge on a sub base but I would be taking a gamble that the client isn't going to want to send ten messages a day to 50 subs. I'd go broke with just one client like that. So I think a lot depends on your platform.

      If you are the one running the message board, then you can limit it to maximum 2 per week. You don't want your clients to go bananas anyway, their customers would drop like flies.

      Originally Posted by BKH View Post

      Set-up fees - I don't charge set-up fees at all! To me I see one hit wonder written all over it and lets be honest how much do you charge to spend 2-5 minutes setting someone up. I do charge management fees ($150) to my clients to send their messages out as well as plan change fees ($10). It's pure profit on top of my mark-up on the messages and keywords.

      Depends on what you can do for them to get things off the ground like putting together customized signage, posters, table tents, hand outs, setting up ads, facebook campaign, and training staff.

      Originally Posted by BKH View Post

      I have two options for my clients here, $.10 for rollover or $.07 for an allotment. This of course pushes a lot of the clients to go with the allotment which pays me for messages even if their not sent so the profit is pretty much square on average and a slow message month turns me a higher profit.

      Nice idea to provide this option, that way the client doesn't feel burned at the end of the month, THANKS.

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  • Profile picture of the author Pestew
    Originally Posted by BKH View Post

    Not to add more confusion to the mix but there is also the pricing structure of charging only for a keyword. For example I charge a real estate company $10 per keyword (listing) to have only an auto response go out to the user. (Meaning an agent puts the add on their yard sign and has a description, price and link to their site sent when someone text the keyword. It also automatically sends a text to the agent letting them know someone is looking at the property so they can call them.)

    Very Interesting concept, BKH!

    If you could join that with the QR codes somehow, that might be a big hit. I would like to know more details with this. I am assuming that could be ramped up with little time involved or outsourced if need be.
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    • Profile picture of the author BKH
      Originally Posted by Pestew View Post

      Very Interesting concept, BKH!

      If you could join that with the QR codes somehow, that might be a big hit. I would like to know more details with this. I am assuming that could be ramped up with little time involved or outsourced if need be.
      I'm still working out a way to have signage made that I can again sell to the real estate agents (for a small profit) and include my "Powered by USText" in the signage for all the other agents showing the homes to see. Once you get a few in a big neighborhood all the local agents will be seeing it and hopefully calling me to find out more info.
      I have kinda given up on the QR code though! I ran a promotion in a bar with table tops that read "enter to win free tickets to the season opener at Qualcomm Stadium To enter Scan here or just text xxxx to 77948. Message and data rates may apply"
      The barcode opted them in via text as well but through a group so that I could track them and I got 2 QR codes scanned and 348 text opt-ins during three weeks. Maybe I'm doing something wrong there but the text platform is working pretty well thus far.
      b
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  • Profile picture of the author MKBridge
    I am struggling with the best price model too. My thoughts right now (for new clients) is to have a monthly charge (say $49) plus a per text rate, $0.10 or so. And no set up fee, I like that.
    My thought if you are going to charge a set up fee, and then they move up to a different package -charge them the difference between the two set up fees to move up. I think this was a question in the original post.
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    • Profile picture of the author imwebmaster
      Originally Posted by MKBridge View Post

      I am struggling with the best price model too. My thoughts right now (for new clients) is to have a monthly charge (say $49) plus a per text rate, $0.10 or so. And no set up fee, I like that.
      My thought if you are going to charge a set up fee, and then they move up to a different package -charge them the difference between the two set up fees to move up. I think this was a question in the original post.

      Hi MKBridge...You have a good challenge in front of you...I'll share with you what I've found and what we're doing to fall in line with these services popping up and pricing...some as low as 2cents a message and some unlimited...some for $49/mo on up to $99/mo...let me share this with you...

      I'm not going to compete with pricing on actual monthly service or message pricing or the concept of roll over bundled packages either...

      After many months of research, testing systems and surveying my prospects and clients...here's what I found out...

      offer the lowest, dirt cheap text message package with value at the level each prospect really needs to start out and begin building a permission based opt in list...stay in line with the low cost entry plans of existing services out there....charge for your management services..billable time
      such as coaching or training the owners or delegated personnel...also for designing and organizing their POS and other promotional print materials such as guest log...table tents...VIP cards, etc...good money in that too...and the big money?...managing their text message campaigns...DO NOT LET YOUR CLIENTS or SIGN UP ANY CLIENTS WHO YOU LET DECIDE HOW TO MANAGE THEIR CAMPAIGNS...YOU DO IT..That's a deal breaker
      don't be too anxious to sign up any client...get the right clients...
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      • Profile picture of the author TheLocalCoach
        We have learned lots through trial and error over the past 2+ years. Unfortunately, there is no one-price fits all strategy, which is why we offer our resellers as many options as possible, including both "traditional" per-message pricing, as well as a "per-subscriber" pricing model. Throughout our Private Label coaching program, we work with our resellers to identify their strengths and figure out which model best fits their skills, any other services they offer, and the degree to which they will manage the SMS campaigns.

        So there are resellers having success converting clients after cheap-in-the-door or free trials, and we have resellers successfully charging $400 set-up fee and $200+ month at the start. And because we offer a customized Mobile Website free with every SMS account, many of our resellers will sell the Mobile Site and include 30-60 days of SMS free. And some vice-versa!

        It also depends upon your marketing methods, as its all about maximizing results for your time spent and finding the model that fits the vertical you are selling into. And mostly, its about establishing the value of your expertise and ability to make the customer more money. If you do this, it won't matter what prices your customer may see in the retail market, they will be thrilled paying you a premium to bring them customers and results.

        Good luck!
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        • Profile picture of the author Pestew
          Originally Posted by EatDrinkTextJay View Post

          We have learned lots through trial and error over the past 2+ years. Unfortunately, there is no one-price fits all strategy, which is why we offer our resellers as many options as possible, including both "traditional" per-message pricing, as well as a "per-subscriber" pricing model. Throughout our Private Label coaching program, we work with our resellers to identify their strengths and figure out which model best fits their skills, any other services they offer, and the degree to which they will manage the SMS campaigns.

          So there are resellers having success converting clients after cheap-in-the-door or free trials, and we have resellers successfully charging $400 set-up fee and $200+ month at the start. And because we offer a customized Mobile Website free with every SMS account, many of our resellers will sell the Mobile Site and include 30-60 days of SMS free. And some vice-versa!

          It also depends upon your marketing methods, as its all about maximizing results for your time spent and finding the model that fits the vertical you are selling into. And mostly, its about establishing the value of your expertise and ability to make the customer more money. If you do this, it won't matter what prices your customer may see in the retail market, they will be thrilled paying you a premium to bring them customers and results.

          Good luck!
          Great Info Jay, Thanks!
          I like the mobile website package angle. I would add that your prices still need to be inline with their profit margins in order to justify your expense. -Pete
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    • Profile picture of the author Pestew
      Originally Posted by MKBridge View Post

      I am struggling with the best price model too. My thoughts right now (for new clients) is to have a monthly charge (say $49) plus a per text rate, $0.10 or so. And no set up fee, I like that.
      My thought if you are going to charge a set up fee, and then they move up to a different package -charge them the difference between the two set up fees to move up. I think this was a question in the original post.
      Yes, very simplistic, I like that a lot! What about for the larger clients when they get up there in high text numbers? I would imagine that you drop the price per text. Anyway, I think your suggestion on charging the difference makes good sense, too. Thank you MK! -Pete
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  • Profile picture of the author Nick Surran
    I'm going with a fully-managed approach from start to finish. After much debate, I decided that to ensure long-term success I need to take as much out of the customer's hands as possible. So, each client will get their own personal campaign manager (me right now), we're going to design and create all in-store marketing collateral, train staff to get opt-ins, help integrate the text CTA into all their other marketing, plan and execute the messages that get sent, create mobile coupons, setup tracking and provide monthly reports. Clients also have the ability to send up to two "On Demand" messages per month.

    Because we are going to do everything for our clients, we're charging a significant setup fee. The setup fee is the same regardless of which monthly package they get.

    Then we have monthly packages with 1000, 2500, 5000, and 10000 messages with overages charged on a per text basis. Bigger packages get a lower per text rate. If the client has overages that take him 50% of the way to the next level, their account will be upgraded to the next package level. I don't do rollover messages.

    I just partnered with a dedicated sales person and we are testing different price points. I'd rather not make exact numbers public here.
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    I think Lime Cellular is the best white label SMS marketing platform.

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    • Profile picture of the author imwebmaster
      You have a great overall vision of "taking out of the hands of client"...and I agree big time...it's difficult enough to get thru the sign up process and get the committment for recurring revenues let alone trust the client to make it a success...when they don't have a fraction of the business infrastructure or mobile knowledge to launch..let alone manage and then fail and blame it on you...and telling people "mobile marketing doesn't work...I tried it"..BS...it works if you manage it for the client...good post.
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      • Profile picture of the author Pestew
        Originally Posted by imwebmaster View Post

        You have a great overall vision of "taking out of the hands of client"...and I agree big time...it's difficult enough to get thru the sign up process and get the committment for recurring revenues let alone trust the client to make it a success...when they don't have a fraction of the business infrastructure or mobile knowledge to launch..let alone manage and then fail and blame it on you...and telling people "mobile marketing doesn't work...I tried it"..BS...it works if you manage it for the client...good post.
        Here, Here! I can tell your speaking from experience. Thanks, Pete
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    • Profile picture of the author Pestew
      Originally Posted by Iolaus View Post

      I'm going with a fully-managed approach from start to finish. After much debate, I decided that to ensure long-term success I need to take as much out of the customer's hands as possible. So, each client will get their own personal campaign manager (me right now), we're going to design and create all in-store marketing collateral, train staff to get opt-ins, help integrate the text CTA into all their other marketing, plan and execute the messages that get sent, create mobile coupons, setup tracking and provide monthly reports. Clients also have the ability to send up to two "On Demand" messages per month.

      Because we are going to do everything for our clients, we're charging a significant setup fee. The setup fee is the same regardless of which monthly package they get.

      Then we have monthly packages with 1000, 2500, 5000, and 10000 messages with overages charged on a per text basis. Bigger packages get a lower per text rate. If the client has overages that take him 50% of the way to the next level, their account will be upgraded to the next package level. I don't do rollover messages.

      I just partnered with a dedicated sales person and we are testing different price points. I'd rather not make exact numbers public here.
      Thanks Nick,
      I must say, that's a well thought out pricing structure. I'm not sure what the "On Demand" messages is, maybe un-scheduled? I guess the set up fee is the tough question here. The small mom & pop will have a harder time starting out with an "all inclusive" set up fee the larger companies can afford. Seems like a very simplistic structure over all. -Pete
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  • Profile picture of the author imwebmaster
    Originally Posted by Pestew View Post

    I have pricing challenges that I have not seen discussed in any threads:

    A) I have read in other threads that both "per subscriber" or 'per text" is talked about as options to charge the client. In various WSO's I have bought, both options are also suggested. Seems like there may be a physiological advantage to charge per subscriber verses per text.

    B) Set up fees are another area that it is not clear. If a client comes in at a basic set-up plan then upgrades later to a larger plan according to the size of his subscribers, do you again charge another set up fee according to your pricing structure?

    C) If you charge per text or an allotment for so many texts, do you allow for a roll over for any unused texts?

    I am curious how other Warriors view these issues, -Pete
    Hi Pete, Are you asking from a standpoint as having a reseeler account with a text message service and deciding what exactly to do to determine price points for business owners who you plan to sell a package to?
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    • Profile picture of the author Pestew
      Originally Posted by imwebmaster View Post

      Hi Pete, Are you asking from a standpoint as having a reseeler account with a text message service and deciding what exactly to do to determine price points for business owners who you plan to sell a package to?
      Probably both I think.
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  • Profile picture of the author yagami
    Guys don't bother to use yeez plateform. I'm from Canada and I thought they are the only ones offering something interesting here but I was wrong.
    More than a week ago, I used the form they have in their site to ask some questions about their max throughput 600 msgs per hour but I didn't receive any response
    If they didn't take this seriously they won't get me as client.
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    • Profile picture of the author TheLocalCoach
      Originally Posted by yagami View Post

      Guys don't bother to use yeez plateform. I'm from Canada and I thought they are the only ones offering something interesting here but I was wrong.
      More than a week ago, I used the form they have in their site to ask some questions about their max throughput 600 msgs per hour but I didn't receive any response
      If they didn't take this seriously they won't get me as client.
      Yagami,
      Sorry for the oversight, we updated our website to a new host in the past couple weeks and maybe your request got lost in the transition. I apologize. As for our throughput on Long Codes, it is now 1200 messages per hour, per account. We have Short Codes too if you have specific situations requiring faster input/output. 90%+ of our clients never see a reason to use the Short Code option. If you PM me, I will be hapy to call, email and answer any other questions you have.
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  • Profile picture of the author qu4rk
    Hmmm...there doesn't seem to be any definitive answer on this one. Does anyone think the $400 setup & $200/month for up to 1k users is workable? I'm going to use twilio & it seems like trying to keep track of say $50/month & $0.10/text can be a little extra to manage. You have to keep track of each individual accounts message count.

    When if you do the first example I gave, you could do a 0-1k price, 1k-2.5k price, etc.

    Thoughts
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    • Profile picture of the author Pestew
      Originally Posted by qu4rk View Post

      Hmmm...there doesn't seem to be any definitive answer on this one. Does anyone think the $400 setup & $200/month for up to 1k users is workable? I'm going to use twilio & it seems like trying to keep track of say $50/month & $0.10/text can be a little extra to manage. You have to keep track of each individual accounts message count.

      When if you do the first example I gave, you could do a 0-1k price, 1k-2.5k price, etc.

      Thoughts
      For a larger company, that would be a good start!
      I think maybe to include a mobile site like Jay mentioned earlier in this thread. But for a small mom and pop, $400 plus $200 monthly (preferably prepay) is out of the question. Maybe to start off a at 500 texts/$125 per mo. and $125 set up and a mobile site upgrade at an additional at $150. Therefore you could still be leaving with a prepaid amount of $400. Or to make that easier, $200 now and $200 at time of site going live and opt-in materials are presented.
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      • Profile picture of the author qu4rk
        Originally Posted by Pestew View Post

        For a larger company, that would be a good start!
        I think maybe to include a mobile site like Jay mentioned earlier in this thread. But for a small mom and pop, $400 plus $200 monthly (preferably prepay) is out of the question. Maybe to start off a at 500 texts/$125 per mo. and $125 set up and a mobile site upgrade at an additional at $150. Therefore you could still be leaving with a prepaid amount of $400. Or to make that easier, $200 now and $200 at time of site going live and opt-in materials are presented.
        Ok fair enough, I like your $125/mo. for 500. Maybe simply tier it. Say:

        < 500 = $125
        500 - 999 = $250
        1k - 2.5k = $500
        2.5k - 5k = $1k
        5k - 10k = $2k

        I'm putting these numbers out there to get feedback, because i've seen it asked many times, but haven't really seen anyone just throw numbers out there.
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        • Profile picture of the author Pestew
          Originally Posted by qu4rk View Post

          Ok fair enough, I like your $125/mo. for 500. Maybe simply tier it. Say:

          < 500 = $125
          500 - 999 = $250
          1k - 2.5k = $500
          2.5k - 5k = $1k
          5k - 10k = $2k

          I'm putting these numbers out there to get feedback, because i've seen it asked many times, but haven't really seen anyone just throw numbers out there.
          Thanks qu4rk! I think the costs need to stay competitive especially as they get larger. I will have to get some time to gather all the great input here on this thread and ponder things for the best solution that will fit. Glad to have your input!
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