Heith et al.,
There are a couple of economic questions that you need to answer first:
1. *Is there a customer device expense to your business? i.e. did you
send / install a device for the client that allows them to use your service
that the client doesn't pay for or pays monthly?*
1. If the answer to the first question is 'yes'. You should require a
minimum monthly spend to recoup your initial investment. The customer
premise devices are generally inexpensive and have a lifetime of 2 - 4
years. So assume a $250 device over a 4 year amortization you need to
collect, at a minimum, $5.20/month ($250 divided by 48 months). That
doesn't include carrying costs that you should recoup as well (deployed
capital should return more than 0%).
2. *Is there an expense to keeping that client active on your service
even if they aren't paying you any money?*
1. If the answer to the second question is 'yes'. You need to determine
how much the opportunity cost is to have capacity reserved on
your network.
For most this is a capacity management question. Most people will
oversubscribe their network to squeeze every last penny out of their
investment -- not necessarily a bad thing provided you maintain quality
during peak times. This varies for operators -- but you should asses at
least some value to having an on-demand connection available.
Once you determine your base expense for supporting a client -- how much
does it cost you just to have the client connected to your network, you
need to determine whether your clients are okay with paying full boat for
their internet connection even when they're not there? Or, are they
sensitive to spending money on a service that they do not deem critical and
as a result do not want the year long carrying expense?
Next consider local competition. Are there any other internet providers in
the area that have an offer to accommodate seasonal subscribers? If
there's something present, you may need to follow suit in order to remain
competitive. The best scenario is limited competition that allows you to
chart your own path.
My preference would be to create a 'low usage' tier. Throttle up and down
connectivity to force an upgrade to a more premium tier when the seasonal
clients are present -- but still collect a monthly service fee when they
are not. May seasonal guests have cameras, thermostats and other sensors
that require internet connectivity. That should be part of the sales pitch
when discussing disconnect vs. lower tier.
I suspect most seasonal clients would tolerate a $10 - $15/month internet
expense. And when they're present, ratchet that up to $50 - $80/month.
The idea is that when the seasonal client has upgraded you're making a lot
of margin to offset the loss of margin during the off-season -- the net
result is superior blended margins over a 12 months period.
Todd
--
*{ *name : *"Todd Mitchell"*,
company : "Mobile Conduct Inc.",
title : "Founder",
phone : "+1.646.484.8080",
location : "Houston, TX",
timezone : ["GMT -6", "Central US"],
web : ["mobileconduct.com"]*}*
On Tue, May 6, 2014 at 3:03 PM, <wi...@mncomm.com> wrote:
> I am starting to get hit by part time users going to their fishing
> house on the weekends. I also have customers that were on seasonal plans
> where their internet was shut down while they were gone, however they
> needed an active connection for remote access to thermostats and cameras.
>
> So what’s an average price for selling usage based service? We currently
> do not offer it now, but I may want to try it out on these instances
>
> thanks
> heith
>
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>
>
--
*{ *name : *"Todd Mitchell"*,
company : "Mobile Conduct",
title : "Founder",
office : "+1.281.404.7393",
mobile : "+1.646.484.8080",
location : "Houston, TX",
timezone : ["GMT -6", "Central US"],
web : "mobileconduct.com",
twitter : ["@toddmitchell <http://www.twitter.com/toddmitchell>", "
@mobileconduct <https://twitter.com/mobileconduct>"],
facebook : ["toddmitchell <https://www.facebook.com/toddmitchell>"*,* "
mobileconduct <https://www.facebook.com/mobileconduct>"] *}*
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