In an earlier post, Ken said:
The only COMPLETELY fair way to approach it is "pure utility" pricing where you pay per minute, message and MB. Of course people will then say they want per second and per KB. :)
We DID look at pure utility pricing but in our analysis and through tons of discussions with focus groups, behavioral economists, early customers and retail experts we determined that going from "all you can eat" plans common in the industry to completely "a la carte" was too big of a leap for most customers.
I understand why this decision was made. And yet, Ting's goal is to make mobile phone service simple. What's simpler than "minutes, messages, and megabytes"? It works for electricity, water, and sewer; why not for cellphones?
Anyway, the point of this thread isn't just to rehash the idea of pure utility pricing (though I do hope that you will reconsider it, as you grow and become more successful). I wanted to propose a compromise, which I think maintains the spirit of your current plans, but adds a bit of fairness for customers with intermediate usage levels.
The way you explain it to customers is this: your plan includes some number of minutes, messages, and megabytes, and then you're charged the per-unit charge for each extra unit you use. At the end of the month, Ting readjusts your bill by picking the cheapest plans for your actual usage.
More precisely, the amount you pay for each category would be the lower of two numbers: the cost of the smallest category which exceeds your usage, and the cost of the largest plan that doesn't exceed your usage plus the per-unit charge for the remaining units. (This would replace the 5% grace period.)
For example, let's say you used 300 minutes. At the M tier, the cost is $9. At the S tier, the cost is $3, plus $4 for 200 minutes, for a total of $7. So you'd pay $7 for 300 minutes.
At 400 minutes, you'd pay $9 either way. So once you hit 400 minutes, the next 100 minutes are free. Contrast that with the current system, where once you hit 106 minutes, the next 394 minutes are free! In the proposed model, the cost difference between 399 and 400 minutes is two cents; in the current model, the cost difference between 105 and 106 minutes is six dollars!
Obviously, to make this revenue-neutral, something would have to get more expensive. I don't have access to your financial information, so I can't make any guesses, but I can say that I'd be happy to pay an extra penny (or so) per minute/megabyte, in exchange for a more continuous price curve.
I know that customer feedback is important to you, so I'm hoping that if I and others express a preference for something closer to pure utility pricing, you'll give it more consideration. :)
Thanks for providing an excellent service, and keep up the good work! :)