Hmmmmm Broken Business Model
"Hi CompanyX. Would your business plan be viable if you used opt-in?"
"You therefore do not have a viable business plan. Refused."
"Hi CompanyX. Would your business plan be viable if you used opt-in?
"Why..... errrr yes!"
"Why are you using opt-out?"
"Still since it works under opt-in you may operate on that basis."
Anyway it would be interesting to see what their business model is and whether it is viable on the sole basis of people wanting to pay the call charges to find out if their 'mates' number is on an undisclosed list that is not guaranteed to be on and then pay £1 to have a text message with their details sent to what is likely to be an out of date or incorrect number.
Face what might be facts. You know the mobile phone numbers of the people who are important to you. Anyone else, there is hardly likely to be much urgency involved so you would probaly avoid the cost and uncertainty and contact them for the number in a different manner... assuming they wanted to give it to you in the first place.
So..... does this look like a business model that, even with opt-out, when based on uncertain data is going to generate a business sustaining income?
I notice that their FAQ page says that if you make the enquiry via the website then the charge is £1. What if you dial them.... from your mobile. Pick 75p connection charge and add 75p per minute their side. Say it is two minutes, if they don't keep you hangin on the line [not that they would just to screw more money out of you?] so you are up to £2.25.
Virgin mobile will 'apparently' charge you a 75p connection charge and 75p per minute for dialling 118 if you call from your mobile. Hmm maybe that includes both sides but... I'm feeling nasty and anyway it's less profit for the dirt on the other side so I am sure it all comes out in the wash.
Now we are up to £4.50. Add on the £1.00 for the SMS and that's £5.50 blown away and you are still not gauranteed a right answer or a result.
How often, at that rate, are you likely to do that? Even if you 'joined' and used the web interface you are not exactly going to spuke money in their direction. How often do you 'need' to know someone's mobile number? Once you have got it, again assuming it works, what's the 'repeat business' going to be like?
Let's 'guess' 60 million people in the UK....
20% under 16 gives us 48 million
84% in the range 16-Dead gives us just over 40 million possible customers. What's a good percentage for the number of people who are going to use this service from their mobile..... once? Is 1% generous? I think it is.
So that is 400,000 customers @ £3.25 for turnover of £1.3 Million. After that the business goes tits up because there is no repeat business. On the web? Who knows but I'd doubt it's going to skew the figures that much.
That's about 1110 enquires a day. Call it a 12 hour day.. 90 calls an hour. Three minutes on each call. 20 calls per member of staff so.... about 5 staff on the lines. National minimum wage, you don't really think they are going to outsource this do you? 1 supervisor @ £35,000, office plus tech staff @ £40,000. Basic anual wage cost £200,000. Add 20% for tax NI and such stuff... £240,000. Add 25% for operating costs, offices etc £300,000.
Add in the four[?] execs at £100,000 a pop and we are up to £700,000... May as well lay in another £100,000 for their 'staff', bottom wipers, and that will be £800,000 first year operating costs with £1.3 Million turnover that is net profits of £500,000 before tax and then the company dries.....
I'd guess we are looking at something that is not viable as a business? Or, and I would not be surprised, maybe my figures are wrong.... However I just do not see it working. How much have the 'investors' bunged these people??
So... what might 'really' be happening?
Lets say these people have 'scraped' up various lists, cheap, from all the sources of 'marketing contacts' they can. Now they need to 'sanitise' the data. First off we need to get rid of the ones that are wrong or don't exist anymore. It would also be good if we could verify current details about the ones we have got and, whilst we are at it dragnet a greater number of 'marks'.
Hmmm OK let's set up a Mobile Directory with an opt-out so people come to our website to... opt-out or in [natch]. Get the details off them, shunt it through the data we do have, 'loosley' cross-reference things and what do we get out the other side.....?
We paid £5.00 per thousand for dirty data. Let's say..... woopsy.
"Hello Mr Home Improvement Company. What would you pay for verified names addresses and numbers of people who bought double glazing in the last five years."
"Oh, well we get something like a 10% conversion rate for those with an average spend of £500 pounds. Uhm we'll deal you 20% so how about £100 per thousand? Can we try some out first to see how it goes?"
"Sure how about 1000 and, if you pay £150 for them we'll group them close to your operating centers and... we'll knock that down to £125 since you are going to... errr, if you tell us what they buy from you?"
So... that will be £125 for an outlay of £5 OK, so I haven't included costs but if you are charging people to sanitise their own data and then making a little bit on top of that.... So... that will be £125 for an outlay of £5.
Run that to a Million numbers and.... £125,000. Do it for 10 outlets in one product area and that will be £1.25 million. Take 10 product areas and that will be £12.5 million. Run the data you generate from sales and demographics back through the system to make the data 4 times more reliable and that's £60 million.
Do it on 5 million numbers and we are up to £120 million. Run 'the scheme' three times a year and £360 million. Start including land line numbers and mass mail marketing and presto! What was once only worth a one off £500,000 has become a BILLION pound a year on year money spinner!!!!!111!!!
Did I hear someone say PROFIT!? Hmmm... perhaps the numbers are making me dizzy
Someone else on commenting on another article on El Reg gave this link....
Where someone else quotes Wikipedia [yaw hawk spit]...."Wikipedia's plain English version of the act: "Data may only be used for the specific purposes for which it was collected.""
No worries. You [did not] did too give your permission for your details to be used for home improvement products. See, says so here.... you bought double glazing. We got your data, you sanitised it for us so now we have sold it on, at a huge profit compared to what we bought it for, so you are getting lots of calls from companies selling home improvement products. See, all legal and above board.
Anyway we don't give a shit, we are on a Billion a year. Do we look bothered. DO WE?