Well your probably right, but a couple of things.
Everyone pays up front an install and activation fee and the numbers I
posted are approx.
2nd thing, how much is bandwidth cost?
Most people look at their high bandwidth usage and say that is how much
they are paying and that is how much it cost.
But is that accurate?
If you buy bandwidth, say 10 megs at 150.00 per meg.
And you have a peak say at 10 megs during that 1 or 4 hours of peak
time, how much did the bandwidth cost you at the off peak times thats
not being used?
maybe your bandwidth is actually costing you even more than is
calculated because you have to consider your peak is only 5 or 10% of
the time and the rest of the time when you are at say 5 megs it's
actually costing you 300.00 per meg....
So on off peak time, you have ooogles of bandwidth that you are paying
for, but not using, how much are you loosing for unused bandwidth?
is it wiser to get something for unused over-priced bandwidth or is it
better to say NO, I would rather let the bandwidth go unused and not
collect any revenue?
Now consider from a marketing point of view.
Lets do the small town market where everyone is telling everyone their
expert opinion and word spreads like wildfire. Word of mouth.
And the advertising rates cost you just the same as a big city.
Do you want your subs telling your other subs or potential subs that you
are charging them more because they downloaded a movie and went over a
bit cap of a couple gigs and then have to spend lots and lots of money
to advertise to convince people to use your service, or would it be
wiser to spend the advertising money with your subs by giving them some
beni's like plenty of speed and good service without the extra charges?
I think it's kinda complicated, but to me the common denominator in all
this is to make the customer happy, and use them for woma.
Not saying your wrong, but rather it's how you look at it.
I look at it this way.
George
Peter R. wrote:
George Rogato wrote:
The very next day a sub called and complained that he was having
issues downloading his news groups and was considering changing over
to DSL. I've had this sub for 5 years and the original reason he
bought broadband from me was because he came to his retirement home
here on the coast on some weekends and wanted to be able to download
some movies from newsgroups he subscribed to.
5 years = 60 months = $42 per month ($41.66 using the $2500)
Does that include the 2 CPE and 2 installs?
IN this past month he grabbed 40GB. How much do you pay for 40GB?
At even Cogent's rate of $15 per MB + tower rental + overhead, what is
the net profit?
Does he pay by credit card? So lose 4% or $1.40).
(I don't need to know, but you do.)
My best advice is to find ways to increase ARPU from these customers.
Whether that be affiliate income from shopping; partner income from
other services sold that are outsourced; PC maintenece; virus insurance;
back-up; etc.
Just my 2 cents worth.
Peter Radizeski
RAD-INFO, Inc.
www.marketingideaguy.com
I've always tried to engineer my systems to be able to have the
capacity to service this type of customer. I buy extra bandwidth, more
than I need. and I try not to load up my ap's and make sure they have
nice big fat feeds.
We ended up swapping out his cpe and pointing him at a diferent ap.
This was the day after Marlons thread. which was about feb 1st.
here is his usage up till now:
TX Data: 1,556,767,671 RX Data: 39,673,651,793 BYTES
or 36.95 gigs to data downloaded and it's only day 17 out of 30.
His usagge has not impacted my system and his usage is like once or
twice a week.
When I look at this guy, I see dollar signs. $2,500 for the money he
has given me and I think even more he will give me in the future.
I realize not everyone has this business plan, or can even afford the
bandwidth, so I'm not implying anyone is doing it wrong, just that we
can handle these types of subs and make a profit from it if we
engineer our network to accomadate this type of user.
George
--
George Rogato
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