Today we can see businesses using SMS for different purposes – marketing, notification, news, text to win campaigns and so on. In those cases usually SMS is a small part of a big project. However, there are plenty of businesses where SMS is in the middle of the business case and sometimes gives the competitive advantage. I will introduce four innovative SMS-based business cases that have been extremely successful in Nordics during the past years.
1. SMS-auction
An SMS-auction is where user’s text in a bid for an advertised item. The system can be set for “highest bid wins” or “lowest unique bid wins” mode. Either way, the user receives a reply message acknowledging the bid and advising them of its position. There are different variations on that business model, which all have their own advantages. Get a general idea of SMS-auctions.
* Bimbaso is a good sample of lowest unique bid auction
* sms2bid is an Australian version of highest bid auction
* Sendioksjon is an Estonian neat version of SMS-auction, where every SMS increases the price per 0,006 EUR and extends the auction by 2,5 minutes. Last person who sends the message gets the product.
2. SMS-loan
It is probably the most profitable SMS-based business, which has also raised some ethical issues. Many countries have already regulated their market for SMS-loans and some countries are doing it right now. Business case is simple – give out loans for small sums with big interests in a really quick and easy to use way. Before creating your own SMS-loan office, read those two stories as well: SMS-loan sharking and loanshark 2.0.
3. Browser based games
Browser based games are quite popular among youth. Believe me, there are plenty of people who want to do something besides shooting someone or playing flash games. Business case here is this – if you want to get advantage over other players, use paid services. Get cool widgets, more money, fame, train yourself etc. Many Fortumo clients have said that for micro-payments SMS is the best one. Every player has a mobile phone these days and they are using it impulsively.
4. Social Networks
Who isn’t a member of some social network nowadays. Some of them have a strong business case behind the solution; some of them don’t have a business case at all. Smaller local social networks have solved it really easily. There are 5 simple steps:
1. you have a social network where people love to spend their time
2. think what could be the extra feature for what users are willing to pay small sums
3. monetize these features with SMS
4. let people know about new opportunities
5. start earning revenue even while you are sleeping
Some things that have been monetized: sending presents, changing the background theme of your profile, getting fame, giving higher points to users, highlight your account/ad/picture etc.
Hi Martin – I’m considering starting a business based upon SMS text content delivery. Do the telcos have a program where they compensate businesses for text messages sent to users? My business model would be predicated upon free end-user subscription for the delivery of certain types of content via SMS with revenue generated from the possible revenue share with the telcos. Please let me know your thoughts.
Hi Russ,
As I understood you would like to offer free subscription to a content, but i didn’t understand exactly the business case behind that. Could you please talk about that more precisely. I mean with what part you are earning revenue.
Coming back to the subscription model, then usually it has certain fees. On the other hand you could subscribe users to your system with regular premium sms and in this case you could use really low end-user prices.