Recent figures released in the UK show that on average, 56,000,000 SMS messages are sent every day in the UK, representing a huge income source for carriers and premium SMS providers. The market in the UK (and the rest of Europe) is a mature one, especially with the prevalence of cross-network SMS being relatively cheap, and with almost universal cross-network premium SMS services.

The most common uses for SMS are, obviously, for communicating with friends, with the most common premium SMS services being ringtones (where SMS is used for billing), horoscopes or football alerts, simple, automated text services. And so some people may think the SMS industry has reached it’s peak, and everything’s now been done.

There’s so much more that can be done with SMS though, especially with the almost universal acceptance of SMS as an information and billing platform. And with the US market soon to be properly opened for SMS, the horizons look bright.

But how do we tap into this market? The obvious choice is to take all the existing SMS-driven content we have and dump it on the market, bringing automated, impersonal SMS services to the masses. Or we could take a different tack and actually use SMS as an information path rather than as an information provider.

Someone once told me that when providing SMS services, you should NEVER put a real person between the request for information and the delivery of information. In other words, he was saying that SMS-based information services should only ever be automated.

In October 2002 I questioned this and designed an SMS-based service that used real people to answer questions posed via SMS. We launched it commercially in December 2002 on a two month trial, doubling the price at the end of the trial. The price doubling (heralded by a free SMS message sent to all of our customers) was met with indifference, and average usage of the service dropped in the first two weeks by roughly 28%, and by the end of the first month at full price, levels had surpassed those of the cheaper trial.

The secret to the service was the live nature of it. Suddenly we didn’t have to advertise special codes or tell people how to construct a command to get the information they wanted. All they needed to know was the shortcode and the keyword – everything else was up to them. And because the response was written specially for that person, there was an automatic confidence that the answer would be something relevant.

It also allowed the customers to engage with the service on a level far above the level of pure information request, leading to long-term relationships between the customer and the service, rather than it being a use-once service. In this basic implementation, where the service was not advertised (except to a very small group of people by word of mouth – no print or other advertising was undertaken) more than 52% of all people who used the service once came back and used it again, with the average number of uses ranging from 3 times across all customers, up to 12 times for the 500 people who used the service most often.

When it comes to live services, most often the finger points to adult chat services. This is certainly true, as these sorts of services are incredibly popular. However as shown by our own experiences, Adult chat or Dating is not the only area where the use of real people in the information chain can add real benefit when making use of SMS.

Hybrid systems using SMS are one area we have been investigating recently, where we implement an automated information system via SMS with a live response service backing up the automated service. This stops the message loss from mistyped keywords, mistyped instructions or textual errors in the information request, as well as adding additional value to the information service – especially if the service is marketed as an automated service with the option of dealing with a real person for difficult questions.

Let’s use an example (not one we are currently working on, this is a hypothetical):
Say you manufacture high-value electrical goods for resale through high-street retailers. As a manufacturer you advertise your products as you want people to purchase them. You may undertake some cross-advertising where you identify where you can purchase these goods.

How about if you used SMS to tell people where the nearest place they could buy your goods was? The beauty of using an SMS shortcode (with our without a keyword) is that you only need advertise one thing. An obvious use is geolocation, where the customer sends their postcode to the SMS shortcode, and receives an SMS giving them the location of the nearest store that stocks the item they are interested in. The basic implementation of this is simple as it’s a straight automation question.

However if you tie this in with a customer support service, your customers need only ever remember the shortcode if they need help with the product they have just bought. They can use the shortcode to get help, assistance, advice – and the location of their nearest repair centre.

There’s another example: “Mojo Knows” (http://www.mojoknows.com.au/) an Australian company that has taken this concept and applied it to Google. The premise is simple: if you want to know something, you send a question to one of their numbers (either Australian or German), and you get a reply. It takes about 15 minutes, and costs you one Australian dollar. The value here is that someone real is answering your question, and if you can’t get to a PC and search for yourself, then this may be useful.

The downside is that you need to pre-register with the site, and deposit ‘credits’ to allow you to use the service. It’s not a pick-up-and-play service, something that is entirely possible to provide with premium SMS.

Which is where we come back to SMS and the USA. Premium SMS and cross-network shortcodes are a boon to the premium SMS industry, as it allows you to market a single, easy to remember number to provide access to your services, and the return path is billed at a set fee. In the USA, SMS hasn’t really taken off as a service because there’s been no easy way to provide cross-network SMS. If you wanted to provide a premium SMS service to Verizon, Cingular and AT&T customers, you had to provide three numbers, making it very difficult to provide good quality services across the networks.

We’re dealing with a company in the US that provides support services. The basic backbone of this service is like Mojo Knows – you must pre-register and deposit ‘credits’ that allow you to use the service. It may be micro-billed, but there is still that reliance on a previous relationship to enable access to the service.

With the advent of cross-network shortcodes on the big three early next year (with more to follow), breaking into the US market should in time become easier, especially as new services are launched and acceptance of single-billed items (rather than time-based charges) becomes accepted, as it has done in the UK and Europe.

This will allow the proliferation of single-use or casual-use SMS as a purchasing tool. The analogy, putting Mojo Knows alongside more traditional premium SMS is like making customers pre-register and open an account at a bookstore before being allowed to buy anything, compared with being able to walk in off the street, select your title, and pay on the way out.

Customers may want a relationship with the company they deal with, but they want it on their own terms, and they want to be able to ‘opt-in’ to the relationship rather than be forced into it.

One pundit I spoke to recently wasn’t convinced that SMS had a real future in the US, and other people I have spoken to have compared the US SMS market to the global WAP market – essentially a non-starter. I have to disagree. Consumers want convenience, and if purchasing a piece of information, or the answer to a question, finding out where their nearest whatever is or getting personalised customer support is as simple as picking up their cellphone, then we may see an explosion in SMS use in the US.

And when you couple this with SMS as the backbone carrier for so many other services,– including downloadable games and those services I touched on earlier – I really don’t think that the power of SMS has really been tapped yet – anywhere in the world.