Launch Pricing Discussion

Hey Guys,

I'm still undecided about what to offer in terms of a launch special. It's something I've planned for us to take a $ hit on because it's marketing. It'd be limited to a certain number of accounts and basically is just to serve as a launch pad for the public outside of our HG customer base.

This will definitely be limited and not a long-term offering.

There are several options I'm considering and all have pros and cons which need to be weighed. I'm curious what everyone here thinks.

Here are the options I'm looking at:

1) Free activation, free equipment. Standard pricing.

2) Standard activation fee. First 3 months for $9.95/month, then standard pricing after that.

3) Standard activation fee. Buy 1, Get 1 on any term option, standard pricing after 2nd renewal.

Like I said, we're planning to take a $ hit regardless so that's not too much of a factor.

I'm leaning towards one of these, but wanted to get some thoughts. I need to make a decision on this this week so the marketing graphics can be wrapped up.

Tim..

Don't forget to factor in the cancellation scheme you mentioned early on. I thought that made a lot of sense.

Quote:

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Originally Posted by burris

Tim..

Don't forget to factor in the cancellation scheme you mentioned early on. I thought that made a lot of sense.

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Yeah, we're definitely doing that. It prevents abuse of the prepayment discount, but is still fair and hard to argue with.

don't forget incentives for other VOIP customers who'd like to 'migrate'

That's a tough question. All 3 options are appealing, but I would personally be more drawn to a buy 1, get 1. Of course, once you pick one, that's the only thing the public will see, and had I not had 3 options in front of me, I would have considered any of them they were on the site as a special.

Just wondering though, wouldn't it make more financial sense to offer free activation and/or equipment and 3-6 months at $9.95 vs. buy 1, get 1? The no up-front costs is a big draw, but just doing rough numbers in my head, I would think you'd lose a lot more money with B1G1. Of course, if the longest term you offer is 6 months, it may make more sense. Just thinking out loud...

OK, I'll wax poetic...

I assume that 'free equipment' only means no activation fee (since you had indicated earlier that you were not planning to 'sell' the equipment or 'unlock' it for customers who terminate). That would be, IIRC, a $30 incentive per account if you stick with standard pricing.

The second option would be 1st 3 months for $10--a $7/mo (rounding up) discount off the prepay price, or $21 total; a $15/mo discount for monthly customers, or $45 total.

The third option (a BOGO for any term option) is a discount of $25 or $100, depending on the plan purchased.

Here's my thinking:

If you want to bring customers in on a 'hey, we're new on the scene and want you to try us out' kind of promotion, make the initial investment (risk) low. However, to appeal to the discount shopper, you should also consider cutting into your service pricing for a limited time. I don't know what kind of target amount you were willing to subsidize new customers at launch, but for the sake of discussion, I'll suggest $55 (without considering any of the factors that you MUST consider, such as how much is affordable for you... :D ).

No-Prepay Option

• Free Activation
• Buy one month, get one month FREE.

Prepay Option

• Free Activation
• First 6-month term for $75.
• Early termination policy is standard policy (but the customer still gets one free month of service): Cancel after 1 or 2 months, get $50 back (pay full price for 1st month, 2nd month is free); any time after 2 months, $25 times (# months active - one free month) is deducted from the $75 paid at signup.

(If you want to float shipping for your first customers, I'm sure they wouldn't complain, either.)

The thinking in the offers I've listed is to offer a low barrier to entry ('try us risk free') plus a 'grand opening' incentive on the service cost. You won't 'WOW' the most miserly customers out there with these plans (you'd probably have to do the BOGO on the 6 month plan to 'wow' them), but that doesn't seem to be your target market, anyway...

I would say that if I were new to the game that I would want free equipment and activation, but only if I prepaid for at least a year. If they sign up for monthly, charge them for equipment but give them activation for free. In conjunction with a prepay of 1 year, I would also give them at least 6 months free or 1 year as well as the free equipment and activation.

I don't think you'll have any trouble finding customers though either with the large Hostgator base to advertise to. So basically, I would pick 2 out of the 3 options up there. An example is Viatalk. They charge $10.95 for shipping and $29.95 setup fee but the equipment is free and they give you 1 year for free. I would always market that shipping is free because people just don't like to pay for shipping. Hopefully this helps a little bit.

1. Free activation, free equipment. Standard pricing.
2. Standard activation fee. First 3 months for $9.95/month, then standard pricing after that.
3. Standard activation fee. Buy 1, Get 1 on any term option, standard pricing after 2nd renewal.

They are all interesting marketing possibilities

Quote:

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Tentative Pricing (Public Forum http://forums.voipo.com/showthread.php?t=413 )

$22.95 – If Paid Monthly
$59 – If Paid Every 3 Months [ Works out to $19.67/month, save $3.28/month]
$99 – If Paid Every 6 Months [ Works out to $16.50/month, save $6.45/month]

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1. Adds up to $99 for six months? Looks best is fees are always hidden and contracts are grandfathered in at a known monthly rate.

1. Could work out to $99.00/6 months, then call to renew for $99.00/6 months, or $22.95/monthly without calling.

1. Could work out to $99.00 for 6 months, then $22.95/monthly without any need to call.

It depends on what you want to promote. Such extended, or limited options, should be prominently stated.


Also, you might consider a . . .

• Introductory UNLIMITED 3 months Plus! Plan
• 1st month: Pay $60.00 (Activation and ATA fee)
• 2nd month: Pay $30.00 (Or, Quit and keep ATA)
• 3rd month: Pay $0.00
• Good Standing: Keep paying $15/month (Quit any time)
• Price never changes (UNLESS: you quit/miss a payment/change plans.)

The beauty of this plan is:
No charge backs
No hardware to return.

$29.95 Grandstream http://www.telephonydepot.com/produc...FQ4hnAodGzaRTg

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Originally Posted by voxabox

don't forget incentives for other VOIP customers who'd like to 'migrate'

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Like:

$30 credit with successful LNP transfer. (Incentive that works as retention.)

Quote:

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Originally Posted by usa2k

Like:

$30 credit with successful LNP transfer. (Incentive that works as retention.)

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Personally, I think you hit on a winner with this suggestion. It will give the potential customer a great incentive and will give the company a customer who intends to stay a while..

Quote:

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Originally Posted by VOIPoTim

Hey Guys,

Here are the options I'm looking at:

1) Free activation, free equipment. Standard pricing.

2) Standard activation fee. First 3 months for $9.95/month, then standard pricing after that.

3) Standard activation fee. Buy 1, Get 1 on any term option, standard pricing after 2nd renewal.

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I'm not sure one size fits all as I ponder your customer universe and think of discussions I've watched in forums.

I think usa2k's idea of a $30 _credit_ with successful LNP transfer has considerable merit. But maybe that credit should come after a suitable period of at least 3 months to 1 year?

As far as which to offer, I suspect that would depend on the audience to which it is offered:

Your loyal HostGator folks are more likely to just go for the BOGO due to their ingrained loyalty based on an already quality experience. They already 'know' what kind of service to expect.

The skeptical new-comer probably would like a waiver of shipping costs and/or activation fee and would be overjoyed to get a discount for the initial service during their initial sign-up period.

A skeptical BYOD-type [if allowed] would like any activation fee waived and go for 3 months reduced fees to test the waters. The ones that are believers from DSLr forums or reviews would probably just want to jump at the BOGO deal because they're really smart shoppers. ;-)

The other smart DSLr shoppers should grab #3.

Anyone trying to transfer from a 'mainstream' provider like AT&T or Vonage will be skeptical of anyone that would [could] offer quality service at a discount, so they would want #1 and be hesitant to pay your low rates. They might appreciate a money-back guarantee of some type if not satisfied, though. For some, doubling the price would probably make them happier in their expectations [I think my brother falls in this category].

In any case, I think you should get the cost of the GrandStream for non-BYOD.


I LIKE THIS SCENARIO:

INTRODUCTORY BUY AND TRY UNLIMITED:

• Month 1: $30 for Locked ATA/No Setup Fee/Try for 30 days/Keep ATA.
• Month 2: $9.95 (Or cancel within 7 days of billing period)
• Month 3: $9.95 (Or cancel within 7 days of billing period)
• Month 4+ 22.95 monthly/$59 for 3 Months/$99 for 6 Months/$179 for 12 months
  

• LNP incentive: $30 credit upon successful transfer.
• ATA will be factory reset/unlocked when canceling in good standing.
• Other contract offers valid on 4th month in good standing.
• Free month offer only valid on 3rd month.

I LIKE THIS SCENARIO:

Quote:

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Originally Posted by usa2k

Like:

$30 credit with successful LNP transfer. (Incentive that works as retention.)

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http://www.dslreports.com/forum/r205...t-website-gone

There could be a wave of BroadvoxDirect refuges soon ... can't be too many now.
If you offer the rebate on 3 months good standing, on top of other offers :)

Most still there are paying $19.95 a month (Grand fathered)
Price went up eons ago. Likely private reseller labels still exist.

LNP incentive will always get rescue cases.

BVX was mostly XO and Level3.

You can put http://i.dslr.net/awards/2.gif on your site :)
http://www.dslreports.com/forum/r20864695-Re-VOIPo-Soon
Don't be surprised if Barney shows up!