Driving $1M/yr Cost Savings with Messaging Product

Summary

Context

SumUp is a B2B company that serves SMBs (small businesses) and enterprises. It provides POS solutions for small businesses (like Square). SumUp’s key product differentiator from its competitors was the text messaging product because it brought customers back to the store, building customer loyalty.

Customer Problem & Customer Segmentation

20% of customers could not use the text messaging product, which was resulting in churn. Fixing this would result in happier customers, stop recurring issues with the text messaging product, and meet mobile carrier compliance. The issue was only affecting one customer segment, vape & tobacco shops, so customer segmentation had already been selected.

Solutions

First, launch a quick fix, the message templating solution for a quick fix. Then, implement the long-term fix, a new SMS channel for the SMBs.

Results

Message templating was implemented in one week, and this stopped customer churn. For the long-term fix, we selected a new vendor and a new messaging channel, which resulted in $1M/year in cost savings.

Table of Contents

  1. Summary

  2. Context:

    • 1.1 SumUp

    • 1.2 My Role

    • 1.3 Problem / Motivation

  3. Customer Segmentation

  4. Solutions:

    • 3.1 Solution Brainstorming

    • 3.2 Solution Decision

  5. Results:

    • 4.1 Message Templating

    • 4.2 Messaging/SMS Channel & Vendor Analysis

    • 4.3 Implementation Plan for 10DLC per merchant

1. Context

1.1 SumUp

SumUp is a B2B company serving small businesses & enterprises. It provides POS solutions for small businesses. The key product was the text messaging product, which is part of the loyalty program. The messaging allowed customers to send a custom message & reward to customers to drive them back into the store.

Customers served:

  • Small businesses

  • Apparel & Thrift stores

  • Food & Beverage

  • Hospitality

  • Enterprises with retail chains (e.g., Plato’s Closet, Play it Again Sports)

Main Competition:

  • Square

  • Toast

Key Differentiator:

The key differentiator is the text messaging product, as it brought customers back to the store. The messaging solution increased visit rates of repeat customers by 25%.

1.2 My Role

What my role was:

Hired as a Product Manager for Fivestars, which SumUp had just acquired a year prior. My role was to help expand the Fivestars loyalty program from 13K to 3M merchants, as SumUp had significantly more merchants.

What my role became:

My role became the Product Manager for the text messaging product:

  • Developing the Product Strategy

  • Creating the product roadmap and executing to meet those goals

  • Addressing the urgent issue where 20% of the customers could not use the text messaging product

1.3 Problem / Motivation

What was the main problem?

  • 20% of our customers were affected and could not use the text messaging product.

  • Churn was being impacted, and Customer Care had already started receiving reports.

  • This was a recurring issue causing 4 major service disruptions in one year.

Root cause of the problem:

  • Vape & tobacco shops sent non-compliant text messages (e.g., containing words like ‘smoke’ or ‘vape’), causing mobile carriers to block them.

  • SumUp/Fivestars had only 4 phone numbers to send messages from.

  • Messages from 13K businesses were split across the four phone numbers, meaning a single non-compliant message could lead to a block affecting multiple businesses.

Opportunities from resolving this:

  • Happier customers & fewer fire drills for cross-functional teams.

  • Meeting new mobile carrier compliance by having a unique number per business.

2. Customer Segmentation

The issue was determined to affect primarily vape & tobacco shops, which made up 20% of our customer base. The segmentation had already been selected, and no further segmentation was necessary.

3. Solutions

3.1 Solution Brainstorming

How our competitors solved this problem:

  • Square & Toast provided a unique phone number per business.

  • Some POS providers used in-app messaging or URL-based messaging.

  • Some businesses avoided non-compliant words, indicating message templating could work.

3.2 Solution Decision

Final Solution: Message Template + Unique Number per Business

  • Message Templating was implemented as an immediate fix.

  • A unique number per business was required for long-term compliance and future-proofing.

High-Level Product Roadmap:

QuarterMilestoneQ2 2022Implement Message TemplatingQ3 2022Messaging channel & Vendor AnalysisQ4 2022Send messages through new messaging channel (MVP)Q1 2023Implement new messaging channel for one business vertical

4. Results

4.1 Message Templating

  • A daily call and canonical document were created to align cross-functional teams.

  • Launched the message templating feature in 1 week.

  • Customers immediately started using the messaging product again.

  • Customer churn stopped, and some customers preferred the templating even after the full fix.

4.2 Messaging/SMS Channel & Vendor Analysis

Messaging Channel Analysis:

SMS ChannelCost-EffectiveEase of ImplementationMessaging ThroughputTFNYesMediumMedium10DLCYesEasyHighShort CodeNoMediumHigh

Vendor Analysis:

VendorCostCapabilitiesCompany StabilityAPI DocumentationBandwidthLowMediumLowMediumSinchLowHighHighGreatTwilioLowMediumHighMediumVonageLowMediumHighMedium

  • Final Choice: 10DLC + Sinch due to cost-effectiveness, high throughput, and easy integration.

4.3 Implementation Plan for 10DLC per Merchant

  1. Negotiate contracts with vendors & select one.

  2. Gather API access from the new vendor.

  3. Send a test message through 10DLC for one business.

  4. Roll out 10DLC per business vertical.

Key Takeaway – MVP Approach

  • Helped identify gaps quickly & allowed faster iterations.

  • Improved roadmap estimations & OKRs alignment.

  • Early customer feedback helped refine the long-term solution.