This started out as a request that never got sent, then resulted in a rambling email that never got sent, and I believe I have an idea that has formed from it.
(Note: all packages are in the form minutes/text/data)
Essentially this boils down to my own situation where a 2-line package on the 1000/1000/100 plan is $38. The 2-line deal would be averaging 690/930/80 over the course of a year, taking into account all minutes under the current carrier plan. This is more than reasonable by all means, hell it's even cheap.
The problem occurs when adding in a 3rd line user who currently averages 490/0/0. They hate sms and have never had a smartphone, so that data *will* go up once exposed, call it 80mb, but sms... not so much. This results in a plan that needs 1180/930/160. Under current tiers, this requires 2000/1000/500 which for 3-lines is $71. A difference of $33. However, to meet those needs, it's more economical under the current tiers to just spend the $18 and get a 500/0/100 plan instead. It's even more economical to go with 1000/0/100 for $27 or 1000/100/100 for $30. A vast amount of that time will simply not be used, and it's cheaper. At $27/$30 though, might as well go with a P+ with no taxes or fees and get 1200/1200/100 for $30 on the Verizon network.
What's missing here is a way to deal with this oddity. 1500 minute plans and 300mb plans are sweet spots, but their creation can jeopardize profit margins.
The current tiers are as follows:
- 0~100 : 3¢
- 101~500: 1.8¢
- 500~1000: 1.8¢
- 1000~2000: 1.75¢
- 2000~3000: 1.733¢
- 3000+: 2¢ per unit
Overage is a rate which technically falls at the 433 minute mark.
- 0~100: 3¢
- 100~1000: 0.5¢
- 1000~2000: 0.4¢
- 2000~4000: 0.275¢
- 4000~6000: 0.233¢
- 6000+: 0.25¢ per unit
Overage is a rate which technically falls at the 5190 text mark.
- 0~100: 3¢
- 100~500: 2.6¢
- 500~1000: 2.4¢
- 1000~2000: 2.1¢
- 2000~3000: 2¢
- 3000+: 2.25¢ per unit
Overage is a rate which technically falls at the 1500mb mark.
A theoretical 1500 minute plan would basically need to either fall at 1.8¢ or 1.775¢, but let's assume the 1.8¢ for a nice $27 price.
A theoretical 300mb plan would be between the 3¢ and the 2.6¢, so let's call it 2.8¢ for $8.
Adding on this 3rd line would then entail an additional cost of $20. Not a bad deal, but again, the problem still remains. $18 for a standalone 500/0/100, however there is some extra time and data to burn in the group rate. And it's a buck cheaper than a 500/100/100 standalone. So, all in all, it makes economic sense and beats P+ soundly.
Moving on to my second point. There are multiple ways of handling an overage, You are going with the 5% grace, which is cool. Over here in China, they go with whatever the overage rate is, add it onto the bill until it hits the next tier price point and then automatically jumps up to that next tier. The problem with this method, and it should be rather obvious, is that @2¢ a minute past the 1000 plan, you have to go all the way to 1850 until 2000 makes any sense at all. Your margins don't lie in selling time/texts/data here, they lie in the UNUSED portions, and obviously the more you get the cheaper it becomes. There's no incentive to bother upping to 2000 until you're nearly there. And for data, the 2.25¢ is a cheaper rate than 2 of the tiers even have. Sure, you can tweak things, but here's a cool idea instead. Charge at the 1st tier rates for overage instead. They are all the same at 3¢ a minute/text/mb.
For minutes, this creates price thresholds at: 300, 800, 1567 and 2567.
For text, this creates price thresholds at: 166, 1100, 2100 and 4100 - in fact, I would probably just leave text alone, it's all cheap to start with.
For data, this creates price thresholds at: 433, 867, 1600 and 2600.
For my own greedy, self-centered self. This would mean keeping the pre-paid 1000/1000/100 tiers and paying an overage of $7.80 a month, plus the $6 line charge, resulting in a $13.80 3rd line. Total bill (before taxes) would be $51.80. Yes, you lose out on the unused minutes, and if you wanted to, you could totally get away with charging a $5 convenience fee on top of it for exceeding without hitting the threshold and it would still be an amazing deal for all involved. Alternatively, only offer it on voice and data beyond 1000 units, preserving the 500 and 1000 tiers in their integrity. My bill with overages on the voice with a 1000/1000/500 would be $59.40 with the cost of the 3rd line @ $21.40. Not beating the $18 mark of 500/0/100, but with less stress over the data portion. Fairly straight forward as well and it makes far more sense than burdening your end with another entire account to manage. It's kinda win-win for everyone I think. And it reduces the stress associated with a slight overage bumping up to the next highest tier that will never be used. An extra buck or two? Not a big issue. Know you are going over already? It won't cost more than the next tier up, and might even cost a bit less.
In fact, here's your copy for it:
Inbetween sizes? Voice and data for all sizes between L and XXL, 3¢ a unit with automatic upgrading (free minutes and data) once your excess is the same price as the next size up.