I see your point, Sam.
Perhaps products like Linksys Routers could be a better example, or how about YouTube? for the argument, or even our residential customers (this oen rings a bell for many of us in this tech service industry, going all the way back to dialup days). I'm not sure about Walmart or MacDonalds not profiting at the expense of the customer (or others) argument: - McD's hamburgers aren't that healthy according to what health folks say, and common folks who eat there regularly prove. - Walmart's employee practices don't seem to be that just either, according to what analysts say.


Sam Tetherow wrote:
There actually are some of us out here that don't have this luxury in our markets. My total market is approximately 3000 people (not households) and I have to go 45 miles in any direction to find another town with more than 80 people in it.

I'm not saying this in a 'woe is me' tone, just stating a fact. Some of us operate in the well under 10,000 people areas where 'finding a higher ARPU customer' is not really a viable option. We have to be all things in order to have enough customers to pay the bills. The top 10% of my market would get me less than 100 customers and they would have an average income of less than $100K.

As a slightly off-topic aside: (those that don't want to listen to my ramblings can safely stop here :)

I do find the Walmart reference interesting. Since I have started this business I have tried to read as much as I can in terms of business, marketing and sales books. Having come from a purely tech background it astounds me how clueless I really was until I started a business.

One of the things that I have struggled with is the price point vs service aspect of the business. Obviously being the cheapest option has it's sales advantages, especially in the residential best effort internet business. But as we all know, being the cheapest makes it a bit harder to pay the bills.

When I read business and marketing books they all espouse the higher end customer is the better customer view. I understand this view, you have a valued customer who is willing to pay a reasonable price for quality service. You look at brands like Lexus and Bose and think, these are the people I need to be like. These companies have made millionaires. But what I find interesting is that companies like Walmart and McDonalds who do live in the quantity, not quality world have made billionaires. The trick seems to be, if you can somehow manages to be the cheapest and do it right you can make a boat load of money and it doesn't have to be at the expense of the customer.

 Sam Tetherow
 Sandhills Wireless

Peter R. wrote:
John J. Thomas wrote:

But, the model will work if you bill by the bytes....

If Joe is paying $40 per month for 6 Gig and gets throttled at 6 Gig, then he has a disincentive for keeping going. If he is paying $40 for unlimited access, he has no reason to slow down.

Charter cable is doing 10 meg down/1 meg up in some markets for like $99 per month, how can you compete with that?

Well, the reality is this: you can't compete with it.  And why try?
Why not move upstream to a larger ARPU customer?
Cable & ILEC can handle and deliver service to the masses cheaply - for now. But there is a segment of every population that needs more than the cheap dumb pipe attached to the cheap dumb support. That is the GAP. That is where the money is.

That is where your market is. But it may mean selling beyond just a pipe.

I've been preaching this for years - and clients that have listened - narrowed their focus; but the shotgun (marketing) away; have done well.

See articles here: http://www.rad-info.net/newsletters/walmart16.htm And there: http://www.rad-info.net/newsletters/winninger.htm


Peter Radizeski
(813) 963-5884

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