5 ms·

I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options. I worked on

by akashs 16y ago

I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options. I worked on a project for a large SW company, and even though they had a simple pricing plan, one of their products wasn't taking off. But when we did some shopping and called in to their reps, none of them could clearly articulate why I would want to buy the higher tier product compared to the middle tier, and they even seemed the same on the website. The pricing was simple, but I had no idea what I would be getting in addition if I spent more money. Contrast this to the iPad example, where I know exactly what I'm paying for. Every $100 increases my storage, and another $130 gets me 3G. It's very clear. I think cell phone plans are a great example of pricing that's complex, but easy to understand because the value is clearly communicated (every $X gets me X minutes). It's easier to make these decisions if I know what I'm paying for.

jacobian 16y ago
You really think that your cell phone plan is "easy to understand"? What's your monthly bill going to be this month? I'll bet if you guessed each month in advance you'd never get it right. My bill's usually within about 10% of what I expect... until it's not and I get the pleasure of spending an hour on hold trying to figure out what changed without my say-so. This fuzziness means I'll never be comfortable buying anything from a cell provider, and so I'll never sign up for the $3 roadside assistance, or the $10 replacement warranty, or whatever. OTOH, when I click "buy" on that 99¢ app I know I'll be billed exactly $1.07 (sales tax), not a cent more or less. A Apple's completely nailed making me comfortable buying stuff from them. AT&T and Verizon haven't. Guess who gets my disposable income and who doesn't?
- akashs 16y ago
  No I don't. As mentioned above, I think cellphone plans are incredibly complex. But typically it is clear what the difference is between the $40 plan and the $50 plan (usually some amount of minutes). I know I pay $30 for data. I know I pay $15 for texts. At least I know what I'm getting, and I can decide if I want to spend the money. And even when they're wrong they typically have some sort of basis for what they're incorrectly charging. In the software company example I gave above, even their own sales people could not articulate why I should pay for the higher product / what I would get. And for what it's worth, my monthly bill is usually the same with Verizon. I did however have those same headaches when I was on AT&T.
- primigenus 16y ago
  I have a simple cell phone plan. It's called Ben (http://www.ben.nl http://www.ben.nl) and it's a subsidiary of T-mobile in the Netherlands that's historically (since the 90s) been the simple cell phone plan provider. Here's what I pay: €3/month for 50 minutes or texts and €9.95 for unlimited data. If I go over, I pay a premium of €0.25 for each minute/text I go over. Simple. It can be done!
  - ugh 16y ago
    Simple pricing schemes are also a major differentiator for many MVNOs in Germany. At least the two biggest carriers with their own network in Germany are just as confusing as their US counterparts but the MVNOs (some of which are subsidiaries of the big carriers) advertise their simple pricing heavily. (This is my favorite plan at the moment: 15 euro for 1GB of HSPA data, GPRS data unlimited; 9 cent for every minute [nothing for incoming minutes as is usual in Europe] and SMS; two SIMs. Perfect for someone like me who doesn’t need many minutes or write many SMS but would like to use data quite heavily.)
- follower 16y ago
  > when I click "buy" on that 99¢ app I know I'll be billed exactly $1.07 (sales tax), not a cent more or less. Coming from a country that always includes (for consumers) tax in the advertised price I find it amusing that "99 cents becomes $1.07" is considered simple. :)
  - jacobian 16y ago
    Indeed - it's pretty silly that in the US apps cost anywhere from 99¢ to $1.10 depending on where your credit card's billing zip code points to. But I can hardly hold Apple responsible for the US's lame sales tax system, and at least Apple doesn't add a $1-$2 "wetlands recovery fee" to my monthly bill. That's not a joke. AT&T does.
    - dantheman 16y ago
      I'm glad sales tax is broken out like that, it reminds people how expensive the government is... imagine if people had to write a check for income tax and not have it automatically deducted each pay period.

by akashs 16y ago

jacobian 16y ago

You really think that your cell phone plan is "easy to understand"? What's your monthly bill going to be this month? I'll bet if you guessed each month in advance you'd never get it right. My bill's usually within about 10% of what I expect... until it's not and I get the pleasure of spending an hour on hold trying to figure out what changed without my say-so. This fuzziness means I'll never be comfortable buying anything from a cell provider, and so I'll never sign up for the $3 roadside assistance, or the $10 replacement warranty, or whatever. OTOH, when I click "buy" on that 99¢ app I know I'll be billed exactly $1.07 (sales tax), not a cent more or less. A Apple's completely nailed making me comfortable buying stuff from them. AT&T and Verizon haven't. Guess who gets my disposable income and who doesn't?

akashs 16y ago
No I don't. As mentioned above, I think cellphone plans are incredibly complex. But typically it is clear what the difference is between the $40 plan and the $50 plan (usually some amount of minutes). I know I pay $30 for data. I know I pay $15 for texts. At least I know what I'm getting, and I can decide if I want to spend the money. And even when they're wrong they typically have some sort of basis for what they're incorrectly charging. In the software company example I gave above, even their own sales people could not articulate why I should pay for the higher product / what I would get. And for what it's worth, my monthly bill is usually the same with Verizon. I did however have those same headaches when I was on AT&T.
primigenus 16y ago
I have a simple cell phone plan. It's called Ben (http://www.ben.nl http://www.ben.nl) and it's a subsidiary of T-mobile in the Netherlands that's historically (since the 90s) been the simple cell phone plan provider. Here's what I pay: €3/month for 50 minutes or texts and €9.95 for unlimited data. If I go over, I pay a premium of €0.25 for each minute/text I go over. Simple. It can be done!
- ugh 16y ago
  Simple pricing schemes are also a major differentiator for many MVNOs in Germany. At least the two biggest carriers with their own network in Germany are just as confusing as their US counterparts but the MVNOs (some of which are subsidiaries of the big carriers) advertise their simple pricing heavily. (This is my favorite plan at the moment: 15 euro for 1GB of HSPA data, GPRS data unlimited; 9 cent for every minute [nothing for incoming minutes as is usual in Europe] and SMS; two SIMs. Perfect for someone like me who doesn’t need many minutes or write many SMS but would like to use data quite heavily.)
follower 16y ago
> when I click "buy" on that 99¢ app I know I'll be billed exactly $1.07 (sales tax), not a cent more or less. Coming from a country that always includes (for consumers) tax in the advertised price I find it amusing that "99 cents becomes $1.07" is considered simple. :)
- jacobian 16y ago
  Indeed - it's pretty silly that in the US apps cost anywhere from 99¢ to $1.10 depending on where your credit card's billing zip code points to. But I can hardly hold Apple responsible for the US's lame sales tax system, and at least Apple doesn't add a $1-$2 "wetlands recovery fee" to my monthly bill. That's not a joke. AT&T does.
  - dantheman 16y ago
    I'm glad sales tax is broken out like that, it reminds people how expensive the government is... imagine if people had to write a check for income tax and not have it automatically deducted each pay period.