Clickatell experienced significant savings through sourcing with Market Dojo

Customer: Clickatell

Sector: Private

Overview

Clickatell is a global technology company and innovator in mobile messaging, engagement, and commerce. Clickatell helps customer-obsessed businesses create customer experiences through chat platforms. 

Over 20 years ago, Clickatell started off as an Application-to-person (A2P) SMS provider. They were one of the first to build APIs that allow you to send an A2P SMS, in the world.

Moving forward, they now operate in rich chat channels. These channels have enabled Clickatell to transform from an SMS only platform to a provider that can allow businesses access to multiple different channels. The recent channels mean it’s no longer just about messaging, it incorporates much more such as transferring money from one bank account to another, or to top-up mobile airtime or data. 

Christiaan Louw is the Partnership Manager at Clickatell and looks after their partners and suppliers. His main objective is to optimise the pricing that they receive from their partners and suppliers. Christiaan spoke to us about how Clickatell utilised our sourcing solution to support their business.

Challenge

At Clickatell, we’re a small team with at least 200 suppliers. We were looking for an efficient way to place an opportunity in front of the suppliers on mass without the need to send a lot of emails to then individually follow up each of them. 

For us, in the SMS industry, we’re talking 2,500 networks globally, that each has its own price point. If you were to invite 10 to 20 suppliers, you’re talking 25 thousand potential data points. We were not always looking to include that many networks in our sourcing events, but this paints a picture of potentially how many data points there can. We were looking to save time through the entire sourcing process yet reach a wide supplier base. 

Having been in the industry for a long time we’ve participated in quite a few eAuctions and RFQs over the years, although on the other side of the fence as such. We wouldn’t necessarily engage with 100+ suppliers requesting them to participate in these activities all at once however, multiple events do add up. We thought it would be interesting to see what the results could be through hosting our own eAuction or RFQ. 

We started looking for partners that had this type of capability on their platform. This was the first time we looked at some of the platforms that we’d previously participated in from a buyer’s side. For example, one of our largest partners uses an ERP solution for their sourcing activity. We engaged with a number of partners and compared quotes, we looked at many options and eventually settled on Market Dojo. We chose Market Dojo because of a number of reasons – the solution met our use case, the technical functionality, and ultimately the cost. That combination made it palatable for us to partner with Market Dojo.

Solution 

To begin with, we carried out a fairly large RFP process to test out the whole sourcing process, which included RFQ, questionnaires and an auction. We found that due to the nature of the A2P industry and the type of partners we work with, the most value we could gain would be from keeping it simple. We decided for us, we would proceed along the lines of an RFQ or an auction only, which would then allow us to ‘rinse and repeat’ on a regular cycle. By doing so, we were able to create a request on mass, which enabled us to present opportunities in front of our partners fairly regularly. 

As one of my objectives is optimisation of pricing, the aspect of competitive behaviour, where participants within the reverse auction can see their rank, worked for me. If the partner wanted to achieve a number one spot, and were able to, the process makes it much more transparent at how they can win business from Clickatell. Using reverse ranked auctions is an intuitive way to expose their ranking yet not the price being placed. 

There is an element of price versus quality when you source suppliers through auctions and we found that the nature of our business meant there’s a quick drop-off. Once we source a partner through the auction based on price, you then move into the testing routes phase, however, everything can change again, but this could be other influencing factors like market rates changing. We also find some SMS routes work better than others. This is an example of why we need to rinse and repeat this process again and again – to have regular engagement with our suppliers and partners. We’re not in a position to be able to source once and expect results to be consistent over a course of 12 months or more. 

There is an element of available functionality versus what I expected. Being new to the official procurement sourcing process, something that I envisaged that would be quite basic, can end up taking hours to set up. Perhaps down to my naivety, with no experience of setting these things up, going into it I had thought it would be a case of pressing a button, uploading a document or a sheet, and Bob’s your uncle. Once I understood how the process and solution worked, it made sense and the time savings in capturing multiple bids and being able to see who are the top rankings was a key benefit. 

Although there are auction templates within Sourcing Dojo, I found there’s a bit of elbow grease that goes into setting these things up. We use a ‘basket of goods’ to tender on the top 30 countries in terms of traffic for that period. For us, simply because if I look at the 30 countries, there may be 400 different networks, which is more or less what we took to our most recent auction. The top 30 countries may be the top 30 right now, but in three months’ time, that mix may be slightly different, or potentially altogether different. Some of them obviously stay the same and are the key countries and markets that we consistently get traffic for. But with others we see them come and go out of the top 30. It’s also very much dependent on our customer behaviour.

Going back to keeping it simple, we also learned that we don’t want to throw too much information at our suppliers in our auction window. That’s why I say top 30 countries versus 200 countries. It’s not realistic to expect suppliers to go out and bid on 250 countries, five to 10 networks within each country. They can’t do that.

Results

The reverse auction in particular has delivered us the most value and we would definitely repeat these auctions going forward from the results we’ve gained. Going back again to last year, we found that what we saw on paper is very different from what it ends up being. From using Sourcing Dojo, we saw significant reductions in terms of time and spend through this exercise.

Conclusion

I mentioned earlier the example of a client using a large ERP solution. I think a lot of people think these ERP solutions are the ‘Rolls-Royce’ of these types of sourcing platforms, they’ve got a bunch of stuff right, but they were massively expensive. Feedback from quite a few of our partners that we invited to our auctions in Sourcing Dojo mentioned that it was run better than the other auctions they’ve participated in.

There are a few things that I believe can make things a bit easier in terms of setting up some of these events, but the support I got from the Market Dojo team to help me find workarounds and figure things out for my industry, were superb, really very helpful.

We’re super happy with the service and the team, and commercially, the pricing makes sense. I would recommend Market Dojo over any other company.