Three types of Customers and rate plans to match.

[WirelessBeachBum]

Before I get into the three types of customers, and what I think carriers should do to target these customers I'll give you a rate plan history at my last company...I was the sales manager so I had allot to do with making their rates, and over about a three year period we ran the entire range of different rate types.

When I first got to this company they had one rate plan it was actually a very original plan.

$20.00 per month 100 included minutes and 1st incoming minute free. The overage was billed on a sliding scale, the more you talked the less your overage became (retroactively on the month.) So in essence I could take that rate plan and compare it to any competitors rates and mine was always less expensive, no matter how much a carrier was charging for their package or how many minutes were included.

The problem was the customer perception was the if they paid more money per month on their package they were getting more value...even though my plan was always less expensive. My salespeople had a hard time explaining the benefits in ways that customers could grasp.

So since perception is reality, we proceded to come out with many different plans to compete.

Regional roaming plans, Aggregate Airtime, Corporate plans, Mobile-to-Mobile, Bulk minute plans, and this gave us some limited success. However people were now not confused by the one rate plan, they were having problems deciding amongst all of our rate plans.

So we finally picked a price point we wanted our revenue to be at, and took the leap (NO pun on Cricket intended) into UNLIMITED service. Initially our Unlimited service was $59.99 per month. After about six months 90 percent of our customer base was on this new plan...we had doubled our ARPU in less than six months....of course we had also given all of our Net Ops folks grey hair in the process.

Basically perception is reality...Customer think that Unlimited Plans are great...in reality we know that Customers can only talk so many minutes per month, and there are just a few types of users.

Type 1. Safety and Security users: Rarely use the phone, and keep it just for emergencies and the occasional grocery list...Give these folks a lower Rate plan with a higher Overage amount. Offer this customer a rate in the 25-30 price range...anything less is does not make business sense... give them about 300 minutes. (three calls per day average) An alternative option for this group would be to give them a dirt cheap rate of say $10-15 dollars and make them pay a really high amount for their minutes $1-2 per minute, with no included minutes...this would get wireless into more hands for security purposes, and also you would eventually migrate many of these customers to higher plans once they are hooked.


Type 2. Keep In touch users: These are the Family Plans and Share Talkers, Give them shared airtime and Unlimited Mobile to Mobile. This customer would fall in the 30-60 price range...1-2 dollars a day is not too much for wireless service (a softdrink cost on average 1.20)...give them about 1000 minutes (10-11 calls per day), but also give them Unlimited Mobile to Mobile.

Type 3. Power Users- These folks feel naked without their phones...give them Unlimited service.This is where pricing getts really tricky, how much is unlimited worth? I say 85-150 price range...the determining factor in what a carrier should charge for this service between 85-150 is coverage, the bigger the coverage included the higher the price....Give this customer Unlimited Service on your network...(without a very restrictive PRL it would be next to impossible to offer an Unlimited OFF-Network plan.)

[WirelessBeachBum]

Of course I could be wrong, maybe I should go back to the sliding scale rate plan.

Would you buy this rate plan from your company for Nationwide On-Network Calling?

$30 per month for 300 minutes (Talk under 200 minutes and get a five dollar credit on your bill, under 100 minutes and get a 10 dollar credit, this would automatically take into account the security users.)

Talk between 300 and 999 minutes and your overage is billed at .04 cents per minute.
Talk between 1000 and 1999 minutes and your overage is billed at .03 cents per minute.
Talk between 2000 and 2999 minutes and your overage is billed at .028 cents per minute.
Talk between 3000 and 3999 minutes and your overage is billed at .027 cents per minute.
Talke between 4000 and 4999 minutes and your overage is billed at .026 cents per minute.
Talk above 5000 minutes an you are billed a flat overage charge of $120.00....the rest is Unlimited.

This plan would give you the following bills based upon your usage.

Less than 100 minutes ~ $20
Less than 200 minutes ~ $25
300 minutes ~ $30
400 minutes ~ $ 34
500 minutes ~ $38
600 minutes ~ $42
700 minutes ~ $46
800 minutes ~ $50
900 minutes ~ $54
1000 minutes ~ $51
1500 minutes ~ $66
1999 minutes ~ $80.97
2000 minutes ~ $77.60
2500 minutes ~$91.60
2999 minutes ~$105.57
3000 minutes ~$102.90
3500 minutes ~$116.40
3999 minutes ~$129.87
4000 minutes ~$126.20
4500 minutes ~$139.20
4999 minutes ~$152.17
5000 minutes+ ~$150.00

What do you think too complicated?

[ComicalMoodyDan]

I wouldn't purchase a plan like that. It's way too complicated in my opinion.

[scottb]

This plan is pretty complicated, but it would either reduce my bill, or give me a lot more minutes for what I pay now. I would try it.