SMS Marketing Not Too Big in Vancouver Yet

When I was in the U.K. last year I saw service-based companies of all sizes making a fortune with SMS marketing. If you’re not familiar with this type of marketing it is simply building a list of subscribers that have agreed to receive your promotional messages via SMS or text messaging.

Compared to email which has approximately a 20% open rate, text messages are read 97% of the time and can see actual response rates ranging from 15% at the low end to as high as 45%. Of course, response rates depend on the quality of the offer as well as the quality of your list.

That said, restaurants, bars, pubs, nightclubs and all types of smaller service-oriented businesses were cleaning up using SMS marketing and it only made sense that Canada would follow suit. Or so I thought.

I conceptualized and built PackYourPlace.com and began testing it here in Vancouver. To say the least, the results have surprised me. First, I must mention that I’m a great marketing guy but not a strong sales person. I’ve also never tried to deal with the primary markets I was targeting – bars, restaurants and spas.

What were the Results?

I screwed up. I hadn’t done my research before jumping into this business. I hadn’t realized how hard the hospitality business had been hit and how price-sensitve many of them have become. Many cited the HST here in BC was to blame while others mentioned that the more stringent drinking and driving laws had adversely affected their businesses.

Either way, price was a big issue.

The other thing that surprised me was how, er hesitant some business owners are to try anything new. I’ve seen the results of SMS marketing first-hand so I knew I had a product that people would benefit from. However, I haven’t been able to get that across to business owners here. Many couldn’t see how their clients wouldn’t be offended when they started receiving promotional messages via SMS – even though they would only receive such messages if they requested them.

What’s the summary? I’m probably going to shelve this idea for a few months. I know it is a winner but the timing might not be right at the moment. It isn’t alwasy easy to admit when you’re wrong but in this case, it looks like I was.  Lesson learned.

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Pricing and Profitability

For years, Internet marketers have been telling us to jack our prices up to increase profitability. Since everything comes down to conversions and profit per sale, the logic is that doubling your price won’t halve your conversions so you should become more profitable.

But is that true?

With my text marketing business (www.PackYourPlace.com) I’m a little surprised to be finding that price is an issue.  I would have sworn that our pricing would be the last concern that prospective clients would have.  But that just isn’t the case (at least in Vancouver).

A recent post by marketing guru Ryan Deiss explains what he is finding.  Basically, his tests are proving the opposite of conventional wisdom.  Of course, he is selling primarily info products with huge margins so if you’re selling more traditional products you’ll want to adjust your figures accordingly.

You can view the video post here.  Unfortunately, as is often the case with Ryan, the video is a little longer than it need be. Still interesting though.