----- Original Message -----
Sent: Thursday, February 02, 2006 1:44
PM
Subject: Re: [WISPA] penetration
rates
Rurality or being underserved has rarely been an
indicator on its own of whether someone will pay more for broadband. There are
three more important factors.
1) Prospects individual Need. (for a specific
purpose)
2) Wealth (The value they put on
their times)
3) Value perceived of the service (What
isthe advertised value of broadband by others, nobody wants to get ripped off
out of principle)
A1) When someone owns their own home business
with 4 or 5 computers, or someone is disabled and orders their medicine
online, or etc, they are willing to pay more. I justified $500 a month for a
T1, for two year when I was one of two people working in my home office, as it
was my only choice, BUT BECAUSE I HAD A HIGH NEED. I could not do business
without it. The two years before I had my home business, I also did not
have choices, so Dial UP was acceptable based on my budget. I
couldn't fathem paying over $20 a month. UNtil the day I realized how much
money I was loosing in time online when trying to run a business. And
realizing I could save $2000 a month working from home. I cleared $1500
by buying that $500 T1.
A2) When I serve wealthy neighborhoods, I
get past the install fee problem in about two seconds, and don't discount
it. So I go after those markets first. The bottom line is a
lawyer, would easilly pay a $100 a month for a home connection if it means
they can avoid one weekend trip a month to the office, when they value their
time at $400 an hour. They loose more money squabbling about the cost in
time than they do just paying it. PLus as a successful individual, they
understand the value of professional service and support. They want the same
high quality saervice they receive in their offices.
A3) When Cable and Verizon advertise $19
Broadband, thats what custoemrs think its worth. Its funny I actually had
a television station, will 30 employees moving into a new office, call
the other day and get upset, because he though he should pay
only $30 a month for broadband, And I tried to charge him $150 for a 2
mbps service. Thats the value he put on it. Hes sees Cable offer
5mbps for $29. But whats ironic, is he doesn;t even know what a megabyte
is. But he didn;t wantto buy form someone that he thought was tryingto
take advantage of him, and rip him off. Its funny, when the only other
option he could find came out to be $600 a month, all a sudden I didn't
seem so unreasonable anymore. He wonders why he was put on the end of the
install schedule. Peopel aren't naturally cheap. They get educated by
the market and advertising to learn their perceptions. Whats even
moe ironic, is the company, before they moved to the location, I learned paid
closer to $800 a month for their T1. The person deligated to order the
service, just wasn't privy to that information. Accounting took care of
the bill because it was sent to them, they didn;lt know what it was for, and
the previous tech guy did all the evaluation of their past provider
choices. Its the ISP's responsibility to educate their prospects on
their need, if you don't they won't understand how much they should pay, and
can only go on what they hear and see on advertising, where the fine print is
never seen.
So how much you want to charge for residential
depends on your Marketing plan and target market. Do you want to take
the whole market or a small sliver of specialized need
market?
In my wealthy underserved markets, I charge $500
install fee, and I am under charging for what I could get. Its my home town,
so I don't want to gouge my community members. $500 was a fair reasonable
price based on what it cost me to deploy, which was more than I charged them
for 900Gear, a quality install, and labor.
However, in main stream served suburbia, I get
95% hang up, after disclosing $300 install fee. However, the remaining
5%, are profitable to serve. So I hand pick.
Whats going to get exciting is mainstream
residential wireless, because of low cost gear QUALITY gear like Trango
broadband and Mikrotik.
Do you want to keep the price high and put money
in your pocket to cover man hours, or lower your price, and increase your
volume and market potential? Are you looking to be more profitable today while
on a cash constraint, or are you well financed and looking for
the maximum payoff, considering you may sell for high multiples, after
you own the client base? That determines price.
I have found that the install fee is the deterent
NOT the monthly fee.
If you are in an under served area and have no
competition, your ownly task is to determine thevalue to your client base. Are
they tech savy or not?
I find that just about anybody will pay $100 to
get broadband installed. Without options in underservia, just about
anyone will pay $250 to get broadband installed.
However, if in underserved, and high need and
wealth, their only other choice is Satelite at $600-$1300 install and $89 a
month, and its just a little faster then dial up, and you'll blow them away
with support and performance. So why be cheaper?
My advise is to get as much upfront as possible
when you can, because you never know what lies a head in the future, don't
wait for your ROI if you don't have to. Don;t sell the equipment unless
you have to.
What I will tell you is that in a served area, no
matter how much need, $300 install fees will not win you residential
clients.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless
Broadband
----- Original Message -----
Sent: Thursday, February 02, 2006 2:04
PM
Subject: RE: [WISPA] penetration
rates
Along
the same thread- what have you found to be the pricing
sweetspot?
We
have tried various pricing models w/ install fees searching for the magic
number. We are primarily rural which= very little competition.
However, there is also pressure on discretionary spending in these markets
as well, so price is an issue.
Chris
what's your penetration rate? what are
the biggest factors affecting adoption of your wireless services? etc.
please expound on any market analysis y'all have done.
thanks,
--
Dylan Oliver
Primaverity, LLC
--
WISPA Wireless List:
wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives:
http://lists.wispa.org/pipermail/wireless/
--
WISPA Wireless List:
wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives:
http://lists.wispa.org/pipermail/wireless/
