Quote Originally Posted by VOIPoTim View Post
Any ideas?
It's so difficult being me, but as you asked I feel obligated to provide you with your pricing strategy. Too bad you've wasted so much time without consulting with me upfront.

First, you will not collect prepayments. You've stated in other messages that you're rolling in dough, so you don't need loans from your customers. Instead you will offer discounts for term commitments. No commitment, the price is $24.99/month. Commit for 1 year, get 10% off ... bill will be 90% of 24.99 = $22.49/month. Commit for 2 years, get 15% off ... bill will be 85% of 24.99 = $21.24/month. You will bill that every month. On each emailed invoice you will keep a running total of savings due to commitment. For the two year term example, the discount is 15% of 24.99 or $3.76. After 6 months, continuing the example, that running total adds up to $22.56. Your invoice will say "Congratulations! Your 2 year term plan so far has saved you $22.56. You earn a total of $90.24 when you complete the 18 months remaining in your plan." If someone cancels early, they pay you that savings back because they didn't earn the discount. The amount will be no surprise. Someone has problems early on, the penalty is relatively light. The longer someone stays, the tighter the handcuffs. At end of the term, discounts stop until customer recommits. Then the cycle starts again, but the 1 year renewals get their first month free; the 2 year renewals get their first two months free. Reward the loyal renewing customers. Of course, those free months populate the restarted cumulative savings amount! This monthly billing strategy also allows you to bill taxes as they get applied by jurisdictions and not have to eat them if some states start to require them. I never liked "bottom line pricing" because if Ernie's state charges tax and my state does not charge tax, you'll be using my money to pay Ernie's taxes. I'll agree that you should try to avoid the "surcharges" that are not passed through -- that will give you a true marketing differential against just about every other VOIP competitor...add on only "honest" taxes.

For market segmentation purposes, you might consider a "Titanium Plan" at the $24.99 price point, which includes 5,000 minutes of calling, with extra minutes at 4¢. Also a "Platinum Plan" at the $20.99 price point with 2,500 minutes of calling, with extra minutes at 3¢ each, and a "Gold Plan" at the $14.99 price point with 500 minutes of calling, with extra minutes at 3¢ each. Term discounts apply to the fixed plan charge, not to the usage charges. By staying out of the "unlimited" game, you'll be avoiding the 3rd World Dictionary Police (otherwise known as home based telemarketers and phone rooms) and scaring off the heavy users who you don't want anyway, and you'll have a compelling reason for subscribers to enroll their "friends and family" because VOIPO to VOIPO will not count against their allowance (like Verizon Wireless IN-NETWORK)! For heavy international users, offer a $5 monthly fee in return for a 5% discount on your international rates. Send all your Directory Assistance traffic to 1-800-YELLOW PAGES and advertise no extra charge for directory assistance calls.

I mentioned to your Brandon on a long phone call a bit ago that you should not be offering adapters that are not routers. Especially if you are going mass market, you don't want to ship out a PAP2 only to surprise grandma that she has to now buy a router -- talk about a "gotcha." I like the way that Vonage does it -- asking customers to identify what their network looks like and shipping the proper device. I don't know if you have the scale to offer multiple devices; if not, ship the combo unit only. As time goes on you'll have the need to replace defective adapters -- I like the idea of having returned units (after appropriate cleaning) be sent out as replacements -- so you'll need a steady supply of those, which you'll get by having a charge for canceling service and keeping the adapters.

This ain't pricing, but if you've made it this far I'll squeeze it in... For as long as I've been in telecom I've always been a one man cheerleading squad for call branding. After your customer dials a phone number, they should hear some appropriate electronic swoosh sound with a whispered "voipo" ... which will create some attachment to the brand (imagine the interest among resellers with their own branding!), while eating up post dial delay time. This should also be done for incoming calls to tollfree numbers that your customers sign up for. Of course, the control panel should have some hidden toggle on/off option to assuage the screamers.