Monday, June 22. 2009You Cant Shame Or Humiliate Krudd......John Linton .....because what used to be called shame and humiliation he now calls "if you don't have absolute proof then I didn't do it and if you do have proof then it's a fake but if it isn't a fake it was done without my knowledge and if it has my name on it it was an error by my staff and if......." and gets the Federal Police to harass the person who quibbles with his definition. ...and that's all I have to say about that - despite trying to avoid Labor obfuscation all week end it proved impossible. (apologies to P J O'Rourke for the misquotation). The real work of the weekend was finalising the ADSL plans for the first quarter of 2009 (which was continually disrupted by the breathless updates of Krudd's, Whine's and the screech owls utterances and a very indifferent Geelong performance) and assessing the various levels of risk we should take in changing the direction of our approach to the wire line broad band market opportunities that may exist now that were not evident (to us) over the past five years. Sounds all gobbledigook to you? Seemed that way to me until I went through what's being offered to the Australian broadband buyer for the goodness knows how manyth time....and then you realise what the problem is for the buyer of broadband services - they've gone the way of mobile services - there is almost no possible way for any "average" English language literate and relatively numerate buyer to actually figure out what they are getting and what it's going to cost compared to what they estimate their current requirements are, are actually using now let alone what they might need to use in the near future..... .......and I used to think I knew a little bit about ADSL in its various forms. So I threw away all my previous iterations including the almost decided on plans and tried to start again basing new plans on simple (perhaps more correctly, simplistic) assumptions that there must be a market for people who have a budget and want to use the internet within that budget without having to worry about "bundling" anything in to their "overall" spend or being "tricked" into long contracts or all the other smoke and mirrors that make it impossible to actually buy a simple service. I looked at Exetel's plans and how they were 'presented' and then I looked at 6 other ISPs and tried to tabulate a comparison. This proved impossible because of the (and I counted three times to be sure) 38 different 'assumptions' contained in the six different ISP's parameters for providing an ADSL1 or ADS2 service. By the time you combined all of the different ISP's 'funny symbol' qualifications it was impossible to do a comparison. So I did that only comparison that could make sense to an 'average' user - I 'normalised' all of the different plans (I looked at 68) to a once off set up cost including a wireless modem and then a cost per gigabyte of upload and download per month.(I included download costs for those ISPs who charge for both). I then set the objectives of the new plans to 'beat' the lowest cost ISP plan in each category by 15% on monthly cost wherever that would not result in a loss by Exetel where Exetel was able to compete with a similar/same service. It took some 5 hours, I never can work quickly on things like this, to produce the information matrix and double check it against the information sources I was using. Then I was able to work out a new set of wire line broadband plans using the experience we have gained on providing PAYU plans over the past 9 months or so and the current statistics that show that well over 50% of Exetel's current users use less than 6 gb of downloads per month. It then took 20 minutes to work out what they could be: All plans include 6 gb of downloads (no peak/off peak) excess downloads at $1.25 per gb with 10 email accounts, 500 mb of web space and a fixed IP: 256k $30.00 512k $35.00 1500 $40.00 ADSL2 $40.00 (naked) ADSL2 $35.00 (rent a telephone line from supplier of choice) ADSL2 $50.00 (with rented telephone line included) $50.00 activation for ADSL2 and $90.00 for ADSL1 new accounts and $0.00 for churn customers. Simple really with no fine print and no funny symbols....and no contract. Only consideration would be whether or not to add some sort of off peak allowance - almost certainly necessary but inconsistent with the overall "ideal". That really would be the correct way of offering ADSL services - clear/concise/no flim flam.Why do I feel so reluctant to pursue this very sensible path? Because it's just too different to present ADSL services without mis-direction and obfuscation and, it appears to me, that "honesty is the best policy" disappeared from residential communications service pricing a very long time ago. As with mobile telephone "plans" it seems that buyers and sellers of broadband services have reached the commercial version of an "armed truce" where both parties have agreed to a level of 'obfuscation' which although both parties recognise the lies they are prepared to tolerate them to pretend they are getting something they aren't.
I think it the best way to present ADSL pricing but I probably won't be brave enough to carry it through. It was a good thought though on a wet and cold weekend. Trackbacks
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Perhaps you should have a comparison page where you compare a few Exetel plans with the likes of Optus and Telstra, that should make things simple for the average jo to understand.
Comment (1)
There are lots of laws surrounding directly comparing your product to a competitor's, hence the use of 'Brand X' etc. Very easy to get yourself into litigation.
Telstra harass Exetel enough as it is without getting into that mess. Comment (1)
Those plans look really good. However, my instinct is that people overwhelmingly still need/want some sort of 'cap' or protection against running up large monthly bills. There's no doubt that $1.25/GB excess is the best in Australia, but there's still potential to do some serious damage on ADSL2+ speeds. Will there be a shaping option?
The other potential problem is that people keep associating "cheap" with "nasty". I don't think Exetel is nasty by any means, so I'm not sure how you avoid this impression. Industry awards? Independently commissioned studies? Published survey of your customers? (and I assume you mean 10 email accounts, not a limit of 10 emails per month!) Comment (1)
I understand your view on 'protection' but, for heavens sake, a 6 gb allowance is very useful for anyone except a P2P user and these plans aren't going to be chosen by P2P users.
An excess at $1.25 is no punishment if the user decided to ignore the three warnings they are approaching their included allowance. It's never going to be possible for a company that has set out to always offer the lowest cost to avoid being the, well, lowest cost. Yes - I meant 10 email accounts. Comments (10)
Note that online games tend to require a large allowance. Most game patches come out once or twice a month, and a are usually a significant size.
Also, the popularity of online stores (such as Valve's Steam) means that the distribution method of software is via the users internet connection. Given the size of many recent games(4+Gb at least) there goes the majority of our allowance in one hit. From this you also have Windows, Linux, Mac OSX updates and other software updates, which add up with multiple computers. In an internet-active house, with over 2 users (a growing number of households I assume) I don't think 6Gb would cut it. Once maybe, but most people who I help install a broadband connection end up using far more than they thought they would have. Ah the procrastination of YouTube Comment (1)
You say 6GB is useful for anyone, but what about any-four or any-five - a typical household with kids? Streaming video is picking up. I'm starting to watch a few things from ABC and SBS off their website, and there's always youtube.
I agree with you about the cost though. Even if you did go over by double, and extra $7.50 will not cause any undue stress like an $20,000 telstra bill might. Perhaps to alleviate any issues with cost overruns, you could block access when the quota is reached and require the account holder to unblock it, and do that for every 4GB ($5) afterwards. Ensure that you have to be logged into the account to unblock, so only someone authorised can incur the extra charges. To me, that seems a little overboard, but since you want to cater towards customers that "have a budget and want to use the internet within that budget without having to worry", this gives them a mechanism to effectively manage how much they spend. Comment (1)
We will put blocks on the service at 1 gb, 500 mb and 100 mb.
Comments (10)
It looks like you are focusing Exetel in a different direction from the flat plans you have had in the past.
Is this going to affect all existing customers, or just new? Will you offer both the current and your proposed ADSL plans side by side? I hope you do keep the existing plans as I know that myself and my friends like them a lot. Comment (1)
+1 for some, even if limited, off-peak period. And I'd also like the existing plans to be available to existing customers from the members area, even if for a grace period of 3 months or so. I for example have been contemplating a plan change from ADSL1 to ADSL2. I (almost certainly) wouldn't bother if the only choice I could take is one of the new ADSL2 plans (without any of the current inclusions or if I'd have to pay extra for them).
Comment (1)
kudabird,
My understanding from reading this blog as well as forum discussions is that these plans will be new and in addition to current plans. NOT a replacement as the previous update was. This is to target (appeal to) a different demographic. The result being a movement of the average cost of provision by having a different average of customer. John, Is this a correct interpretation, or will you be offering these new and only these new plans to all new customers? (I note, you have stated that, as in the past, you will leave customers on their current plans.) Comment (1)
These plans are intended to be an extension of the current PAYU concept we have been introducing.
They are not intended to address the current market demographics. Comments (10)
Pardon my ignorance, but is that a "yes existing plans will stay in addition to these new ones" or "no the existing plans will be removed (other than for existing customers) and all new plans sold by exetel will be in this format"?
I'm assuming the former. Thanx Comment (1)
Yes - the plans are additions.
Comments (10)
I think these new plans are great and will be perfect for my parents internet connection.
Comment (1)
john,
why do you leave out 8Mbit ADSL1 plans -- i feel like a lepper -- as someone who cant get adsl2 but still wants a decent download speed. please john , dont forget about 8Mbit customers . - we are not animals ( courtesy - the movie - the Elephant Man ) Comment (1)
It didn't occur to me the 8192/384 users would want a low download plan.
Comments (10)
John,
Might be worth offering a 8192/6GB plan. It wouldn't quite suit me, but for those of us in non ADSL2 areas (IE most of Tassie) who want a faster page and general download speed increase above 1500, then it may prove popular if priced competitively against the existing 8192/12GB Peak plan of $75. At $1.25/GB excess the odd extra GB is still attractive. Comment (1)
Easly enough done - bear in mind that the wholesale cost is very high.
Comments (10)
"We will put blocks on the service at 1 gb, 500 mb and 100 mb. "
An actual block that requires the account holder to login to their members facilities via username/pass or the current system that allows anyone of any age to accept charges on behalf of others? Comment (1)
A screen block that requires the user to "accept" the message that they have been advised that they are nearing the end of their included allowance.
Comments (10)
Hi John, I know this sounds slightly ridiculous, maybe "name" the various plans against Australian native animals so us "plebs" can make an association against them i.e 256K $30.00 "Wombat", 1500k $40.00 "Spotted Quoll" etc....on the back of this have an option where $1 extra dollar may be charged per month to directly contribute to the care and preservation of such species!....
Comments (2)
Seriously who really goes into the almost impenetrable and intricate detail of a plan?...often there are too many variables, an individual may think they have a handle on the "*" the "#" and the "^", one aspect of usage changes and it all goes out the window!...in my case my kids come to stay in the holidays and smoke my account...I couldn't care less as the Gbyte charge is cheap, should it go a few Gig either way who cares!...so how to make it simple and feel good?....well as much as I hate labels...label it and the penalty notice is the animal turns into road kill if it goes "over the road" Bruce
Comments (2)
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