August 20th, 2007

Finding The Optimal Price for Messaging Services

By Nir Hakarmeli - Director of Consumer Marketing

Most operators think that the current price they are using for SMS is right on the money but that can be misleading. We believe that pinpointing the optimal price can push usage beyond its normal growth rate and generate serious revenue over time. Finding the optimal price for SMS mainly involves checking the effectiveness of different price plans on different groups or even on a control group in some cases. You can integrate a dedicated system that gives you the ability to conduct such tests. Without this ability – finding the optimal price is hard.

But regardless of whether you ultimately decide to lower or raise the price you are currently charging for SMS there is one really important thing to keep in mind: don’t make any sudden moves! We recommend checking for the optimal price before you do anything and also don’t forget to deal with how customers perceive these changes. If you are lowering the price be sure to communicate this change to users often enough to make sure they are fully aware of the benefit they are receiving. If you are raising the price take care to do it in a way that doesn’t affect usage.

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