Thursday, March 27, 2008

Zygo Hubs: Group SMS

Although text messaging has been such an enormous success, it could have been even bigger if it had been designed to support M:M messaging. The vast majority of the messages we send are to one person, yet so much of our non-mobile communication is in a group context - forums, bb's, group email, conf calls, etc etc.
The problem with M:M SMS has always been the economics. In Europe, i pay to send an SMS, but if it has multiple recipients, my operator wants to charge me x times as many recipients that receive the message. It gets costly and so i dont bother. What the outdated and simplistic mobile operator interconnect model misses is the financial echo of that first message. So i send a message to 5 people, I get two replies that also go to the other 5 people - my operator gets 2 x the interconnect receipt (assuming i'm the only person in that group on that one operator) + any revenue from any additional messages I send to that group. For an operator with 30/40% market share - this starts to look quite fruity as you increase the amount of originating revenue in accordance with your share of the group participants.

I looked at this in quite some depth at Voda and found a way to make this work. We conducted a social network analysis of SMSC data to understand the social footprint and fabric of messaging. Even though there was no 'product' in place, customers were already demonstrating this behaviour - i.e. a % of SMS was being sent to multiple recipients and there was evidence of repeat conversation. Productising and promoting this would surely have been profitable.

Anyway, I'm digressing, the point is there is a gaping opportunity in this product space and a company called Zygo Communications (which was founded by some of my ex-colleagues at Orange) have just launched a proposition to address this; Zygo Hubs.

The service allows you to set up a group with up to 20 participants, you get allocated a dedicated long number, and every message you send to the number will be forwarded to the other group members. You can set the group up via mobile or web, and the communication history of the group is accessible via a web interface. You pay your normal operator message rate for every message you send to the group, and for every message that is sent to group members, a credit is deducted from the group account. You get 50 free to start with, and can top-up via the web. SMS credits start at 7.1p each and decrease in price in accordance with the amount of the top-up. This seems a little pricey given the wholesale cost of SMS, and may not be cheap enough to draw users in v's what they have today (1:M SMS included in their bundle).
The site, brand and design seem targeted at the 'youth', who are the most price-sensitive segment of all, and who may be unwilling to swallow 7p per text given the relative pricing of bolt-on SMS offers on both PAYG and PM price plans. Despite this, there is clearly a market for this kind of offer within SME's, Education, Public Services and other areas - re-branding the site for these verticals will be cheap and easy.

"Social Advertising"

The corporate part of the Zygo site explains that the Zygo platform can be used by Brand partners to engage in targeted conversations with the groups that use Zygo. Presumably, the per message pricing can be subsidised with mobile advertising - this is neat, and a nice example of how mobile VAS can be funded through advertising. What impact this has on the customer experience (e.g. share of ads to group messages) has yet to be seen.

• Allows anyone to set up their own group messaging service (via the web at and provides that group with a single central telephone number through which any member can contact the whole group instantly.
• One text message sent to the group number and the ZygoHub relays it out to all members, similarly any reply goes back to the whole group creating an instant and true group text conversation.
• Is designed to be inclusive for everyone in a group so works on any network, any handset and is as simple as sending an individual text message.
• Has an easy to use web interface that allows the members to add profiles, send sms, manage their group and archives the group’s conversations.

1 comment:

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