4 ms·

> Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more. Go on.. (by that i mean can you explain your view of t

by wh-uws 14y ago

> Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more. Go on.. (by that i mean can you explain your view of this. it sounds interesting and I don't understand)

bonzoesc 14y ago
"Everything is worth what its purchaser will pay for it." -Publilius Syrus It's textbook price discrimination[1]. If somebody's not willing to pay much for texting, they can pay nothing and ask that it be disabled. If somebody cares very little about it, they can pay 20¢ per message[2]. If they know they'll text lots or just want to pay a flat fee and not care, they can pay $20/month[2]. The 20¢ per message is because if you're a light texter, that's about the most you're willing to pay per message. The cost of something only sets a bottom floor on a price; it's not immoral or unethical to maximize profit by setting a sale price with a large margin. 1: http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination 2: http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830290&q_planCategory=cat1370011 http://www.wireless.att.com/cell-phone-service/cell-phone-pl...
larrys 14y ago
"segmenting customers by behavior and price sensitivity" Similar to what is done by web hosting providers. Offering more disk space for more money when the average customer isn't going to come close to using the base allotment. Also, we did this with domain redemptions. We used to charge a fee and process them all at about the same speed (Which was pretty quick usually within an hour or so.) We changed the order process so that the default turn time would be 12 to 24 hours for $0 upcharge. Then, say 8 to 12 hours for $15 more. Then $25 upcharge for 2 to 8 hours. The response was instant and about 60% of the people paid the $25 charge. Not only that but if people are really upset we can give them the quick service for free (because it doesn't cost us anymore) and it makes them really happy. (Like an upgrade to an empty seat in 1st Class.)

by wh-uws 14y ago

bonzoesc 14y ago

"Everything is worth what its purchaser will pay for it." -Publilius Syrus It's textbook price discrimination[1]. If somebody's not willing to pay much for texting, they can pay nothing and ask that it be disabled. If somebody cares very little about it, they can pay 20¢ per message[2]. If they know they'll text lots or just want to pay a flat fee and not care, they can pay $20/month[2]. The 20¢ per message is because if you're a light texter, that's about the most you're willing to pay per message. The cost of something only sets a bottom floor on a price; it's not immoral or unethical to maximize profit by setting a sale price with a large margin. 1: http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination 2: http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830290&q_planCategory=cat1370011 http://www.wireless.att.com/cell-phone-service/cell-phone-pl...

larrys 14y ago

"segmenting customers by behavior and price sensitivity" Similar to what is done by web hosting providers. Offering more disk space for more money when the average customer isn't going to come close to using the base allotment. Also, we did this with domain redemptions. We used to charge a fee and process them all at about the same speed (Which was pretty quick usually within an hour or so.) We changed the order process so that the default turn time would be 12 to 24 hours for $0 upcharge. Then, say 8 to 12 hours for $15 more. Then $25 upcharge for 2 to 8 hours. The response was instant and about 60% of the people paid the $25 charge. Not only that but if people are really upset we can give them the quick service for free (because it doesn't cost us anymore) and it makes them really happy. (Like an upgrade to an empty seat in 1st Class.)