{"id":1342,"date":"2022-07-21T13:38:55","date_gmt":"2022-07-21T13:38:55","guid":{"rendered":"https:\/\/test.thesmsworks.co.uk\/blog\/?p=1342"},"modified":"2023-01-24T10:55:35","modified_gmt":"2023-01-24T10:55:35","slug":"long-held-secret-business-sms-industry","status":"publish","type":"post","link":"https:\/\/thesmsworks.co.uk\/blog\/long-held-secret-business-sms-industry\/","title":{"rendered":"The Long-Held Secret of The Business SMS Industry"},"content":{"rendered":"\t\t
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The long-held secret of the business SMS industry<\/h1>\n\n

In 1999\u00a0I set up a company called Text Marketer with a couple of friends.<\/p>\n\n

We were one of the\u00a0first business SMS<\/strong>\u00a0companies in the country.<\/p>\n\n

The whole venture was great fun\u00a0and we got many things right. We sold good products at an affordable price.<\/p>\n\n

It was a very successful business which we eventually sold it to a competitor in 2013. It\u2019s still going strong to this day.\u00a0
\u00a0<\/p>\n\n

An SMS industry standard practice<\/h2>\n\n

Along with all other companies in this exciting new sector, we charged our customers for all the text messages that they submitted through our platform.\u00a0<\/p>\n\n

So, whether a message was delivered or not,\u00a0we charged for it<\/strong>.\u00a0<\/p>\n\n

What wasn\u2019t commonly understood\u00a0by our customers, is that we did not have to pay for messages that weren\u2019t delivered.\u00a0
This\u00a0SMS industry secret\u00a0<\/strong>remain largely unknown to this day.<\/p>\n\n

We were making an\u00a0additional profit\u00a0<\/strong>from all the undelivered texts that our customers sent.<\/p>\n\n

Over ten plus years, the average non-delivered rate for all our SMS traffic was around\u00a018%,<\/strong>\u00a0so we were benefitting quite substantially from this hidden profit.<\/p>\n\n

This was the industry\u2019s standard practice at the time and so it remains to this day.<\/p>\n\n

There was certainly no intention to mislead customers or hide anything, it\u2019s just the way the industry has always worked.<\/p>\n\n

Most common support question<\/h2>\n\n

Like most service companies, we tried to keep our customer support as streamlined and efficient as possible.\u00a0<\/p>\n\n

We captured all the most commonly asked questions and created full answers, so we could respond in detail, whatever the query.<\/p>\n\n

The most commonly asked question by a factor of about 5 was,<\/p>\n\n

Do I have to pay for messages that are not delivered?<\/strong><\/em><\/p>\n\n

I hated that question.<\/p>\n\n

It meant I had to squirm about and try and justify why we were charging for failed messages.<\/p>\n\n

I never directly lied to any customers but I certainly tried to deal with it as vaguely as possible and then steer the conversation onto something else.<\/p>\n\n

It was painfully awkward and I\u2019m glad to be rid of it.<\/p>\n\n

New company, new approach<\/h2>\n\n

When we set about building our new business, an absolute red line was the fact that that we weren\u2019t going to charge for failed messages.\u00a0<\/p>\n\n

We wanted to offer a rock-solid SMS API with a headline price that was lower than most of the market and crucially, all failed messages were\u00a0to be refunded<\/strong>\u00a0back to customers\u2019 accounts.<\/p>\n\n

Having this policy in place does mean that we make much less margin per text, particularly as our SMS prices are low but it means we don\u2019t have do deal with that awful support question.<\/p>\n\n

SMS companies explode, SMS prices plummet<\/h2>\n\n

When we started back in 1999 there were\u00a0about\u00a08 or 10 business SMS companies<\/strong>. Today there are probably over\u00a080<\/strong>.<\/p>\n\n

It\u2019s become ferociously competitive.\u00a0<\/p>\n\n

SMS prices\u00a0have\u00a0also dropped like a stone over the past decade or so. In 2005, the average cost of business text was about 8 pence.<\/p>\n\n

Today it\u2019s\u00a0around 3.7 pence.<\/strong><\/p>\n\n

\"chart<\/figure>\n\n

SMS companies are having to do much larger volumes of texts to maintain anywhere near the same margins. New customers are being fought over and the main weapon is price.\u00a0<\/p>\n\n

Most companies have solid products and support, so there\u2019s very little that can be used to create a genuine point of difference.<\/p>\n\n

We’ve created an\u00a0SMS price comparison calculator<\/a><\/strong>\u00a0that make the whole process of comparing suppliers much easier.<\/p>\n\n

You simply enter the suppliers’ names and details of their quote and the tool will\u00a0calculate\u00a0the monthly and annual cost for each, for easy comparison.<\/p>\n\n

The lowest cost provider is highlighted in green. You can also save your results for later use.<\/p>\n\n

Strong inertia<\/h2>\n\n

Business SMS providers are also benefitting from\u00a0strong customer inertia<\/strong>. Changing SMS providers is not an appealing prospect for most companies, even with the promise of lower rate per text.<\/p>\n\n

1. Integration costs<\/strong> There are costs involved with integrating a new SMS provider. It takes time and effort to switch.<\/p>\n\n

2. Risk\u00a0<\/strong>There’s a risk that the new company might not perform as expected.<\/p>\n\n

3. Long payback\u00a0<\/strong>The benefit of a reduced rate may take months or even years to be realised.<\/p>\n\n

Sometimes it\u2019s easier to stick with something you know.<\/p>\n\n

Business messaging remain strong<\/h2>\n\n

Thankfully though, the volume of business SMS being sent is still growing.<\/p>\n\n

\"Mobile<\/figure>\n\n

According to research by\u00a0mobile squared<\/a>, a ridiculous\u00a01.67 trillion business texts were sent in 2017<\/strong>.<\/p>\n\n

They expect that figure to rise to\u00a02.8 trillion by 2022.<\/strong><\/p>\n\n

That represents a\u00a068% rise\u00a0<\/strong>in business to consumer texts over a 4-year period.<\/p>\n\n

Despite the rise in the use of messaging apps, nothing has yet challenged the responsiveness and ubiquity of SMS.<\/p>\n\n

If you really need to be sure that a message is read, SMS is the best option.<\/p>\n\n

The future of business SMS<\/h2>\n\n

I feel sure that at some point\u00a0business SMS will be challenged<\/a>\u00a0as the dominant communication tool for business.\u00a0RCS certainly looks promising<\/strong>\u00a0but it\u2019s a least a couple of years away from being a practical solution.<\/p>\n\n

At the moment, its use is restricted to Android phones on the Vodafone network.<\/p>\n\n

So for the time being, SMS looks safe. Companies will\u00a0continue to pay less<\/strong>\u00a0for the texts that they send and even if they send more texts in total, their overall SMS bill is likely to drop.<\/p>\n\n

If you think we might be a good fit, please\u00a0help yourself to free account<\/a>.<\/p>\n\n

We\u2019ll be on-hand to answer any queries that you may have.<\/p>\n\n

A word of thanks<\/h2>\n\n

Some of our customers were kind enough to agree to writing short testimonials for us, some of which we published on our home page.
We can’t thank them enough for bothering to take the time to write nice things about our SMS API.<\/p>\n\n

We’re hugely grateful to all the good folk at\u00a0TISSL<\/a>,\u00a0Goodtill<\/a>\u00a0and\u00a0AutoSLM<\/a>\u00a0for their kind words.<\/p>\n\n

Related articles<\/strong><\/p>\n\n

Why is business SMS still so popular?<\/strong><\/a>\u00a0Good question. SMS is rubbish compared to other messaging options do why hasn’t it done the decent thing and disappeared? Here’s why.<\/p>\n\n

What is unicode in SMS?<\/a>\u00a0<\/strong>Does anyone know what unicode is or does? Anyone? No? O well, here’s a brief rundown.<\/p>\n\n

What is an SMS gateway?<\/a>\u00a0<\/strong>Isn’t it the same as an SMS API? This is a one minute read.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The long-held secret of the business SMS industry In 1999\u00a0I set up a company called Text Marketer with a couple […]<\/p>\n","protected":false},"author":1,"featured_media":1558,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"disabled","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1342","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1342"}],"version-history":[{"count":0,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/media\/1558"}],"wp:attachment":[{"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesmsworks.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}