The great SMS rip off

A couple of weeks ago I was at a conference, and one of the presentations was about SMS campaigns, competitions etc.

The speaker in question (can’t remember his name offhand), talked about Highveld Stereo’s loyalty scheme. I don’t listen to the radio, but from what the presenter was saying, throughout the day DJs mention certain words and when listeners who are registered for the scheme hear the words they SMS them to a specific number.

Each SMS costs the listener R1.50 to send. Now let’s say the cellphone network takes 50c of that cost, it still leaves Highveld with an income of R1 per SMS.

What makes this scheme even better (for the station that is), is that the “rewards” that can be redeemed with the loyalty points that are accumulated include content that has previously been broadcast on the radio (such as jokes from the Rude Awakening) that can now be downloaded as podcasts.

How’s that for smart? Get a loyalty scheme to not only pay for itself, but potentially turn a profit!

Surely loyalty schemes are about giving back to your customers (or listeners in this case) at no cost to them? How do you think Clicks customers would feel if they were charged a fee every time they swiped their Club cards?

This also started me thinking about competitions that you can only enter via SMS. One example that comes to mind is the trivia competition on eTV’s breakfast programme. It costs R2 to SMS the answer to e, with some sort of prize to be won.

Now no doubt the prize has been sponsored, so has cost eTV nothing, and let’s be really conservative and assume the cellphone network is taking half of the SMS cost, that still leaves e with R1 per SMS at no cost to themselves.

Again, aren’t competitions supposed to be value adds for customers, viewers etc? What do you think would happen if we were charged R2 for entering a store-based competition? We’d tell the store exactly what to do with their competition.

Now I don’t see anything wrong with companies covering the cost of the SMS entry, otherwise the cost of the competition would spiral out of control, but that can only be a maximum of 50c.

What justification can these companies have for charging up to four times this cost, but the bigger question is why we are so willing to let ourselves be ripped off in this way?