Day 196
17:27 PM
1 week ish away from finishing helpdesk just tidying stuff up + going through some 'to dos'
Then got some features to do after I get 'app review' but
I'll probably only go through app review after I've done self-service
Then after/before app review I'll make everything 'teams' based so big brands can use it at scale
BUT
More importantly
SMS marketing benchmarks are:
- 10% to 20% acquisition rate
- $0.10 to $0.20 revenue per message
- 3-5 messages per month per subscriber
- $0.50 to $1 revenue per customer per month
- $6 to $12 revenue per customer per year
So
Messages cost $0.0075 to send
I believe
Maybe some surcharges
That means SMS has 10-20X ROI
Volume discounts (per month) (first 5 million, $0.0075, then next 20 million, $0.05, next 75 million, $0.03)
75 million messages = 20 mill customers per month
700,000 orders per day
If I have 10,000 merchants and each gets 70 orders per day on average, I should get the 75 million discount
Anyway
Let's assume I've got the worlds best user experience, everything automated
How do I make this front-end profitable – as a business model
Change the pricing frame?
See, my competitor charges $500/mo
But for smaller customers they charge a surcharge of $0.0075
$0.0075 * 3-5 messages per month * 12 = $0.45 per customer per year
Compared to $6 to $12 per year, the $0.45 per customer per year is pretty solid
If a store gets e.g. 100 orders per day, you get $112 per month
Wait what
0.0075*5*100*30
$0.45 per year is $0.0375 per month
0.0375*500*30
Even a big store (500 orders per day) is only $562 per month
But... if you get the entire customer list (e.g. 100,000 people)
100,000*0.0075*5 messages per month = $3750 per month
But an average SMS list is more like 10,000 = $375 per month
So wait a second.
With SMS. A list of 10,000.
The merchant is making 10,000*0.15*5*12 = 90,000 per year average
$7500 per month revenue
Approx $3000 with standard 40% e-com margins
So my costs are 0.0075
I charge them 0.015
10,000*(0.015-0.0075)*5 = $375 per month
For the same thing, klaviyo charges $450 per month
Mmmm I'll see
Improvement is needed to this model.
Then I'll have my customer support app there too + self-service
+ after SMS I'll make a subscriptions app
maybe after a split payments app
Anyway all good, back to work