Why even tiers?
Answered

I get what you're doing with pricing, but I quote: "Pay for what you use. No penalties. No waste."  However, for example, if I end up using 101 call minutes one month, I'll end up in the 500 minute tier where I'm paying for 399 minutes I'm not using, which sounds like a penalty and waste for me.  Wouldn't just an overall flat rate per call/text/MB be simpler and more in line with what you are promoting? 

Don't get me wrong, I love what you're doing.  Even with the tiers, the savings overall would be very significant and I do plan on switching as soon as my contract is up with my current provider.

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  • I was told by someone in phone support at Ting that there's a 5% leeway before they bump the tier for billing. Not sure if that's definitive. Doesn't really answer your question either.

    I suppose as a marketing device the tiers make it easier to make a price comparison. They also mean that on average people pay for "more" than we use. So to get the same revenue charging purely by the minute (or whatever) they'd have to raise the per-minute charge from what it would be if you just divided the current tiers by the charge-per-minute (or whatever) for them. And _that_ means that if you use just up to the tier level but not over it, you're effectively getting extra value from the current arrangement.

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  • We did consider "Pure Utility" pricing early on in developing Ting but we got a lot of pushback on this from individuals. It's a bit too much of a stretch from other companies' current pricing models and a fair number of people started fretting about how much each call or text would cost them, which isn't our intent. So we went with the bucketed model for "individual and family level" usage.

    Now, businesses are much more amenable to paying directly in proportion to usage. You'll notice that as you go beyond XXL the entire Ting model in fact DOES become pure utility-based pricing.

    So to a certain extent we've managed to meet both needs. Of course there will always be some folks with low usage who would like utility pricing but we had to compromise somewhere to make it work for most people in most situations.

    And yes there is an unofficial, unpublished 5% "grace" so that you can go a little over the top of a bucket without getting charged for the next largest bucket. That's just us being nice. Shhh!

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  • I would also prefer a "utility" pricing - there's rarely a time that I would "do or not do" something (like double check an address or check traffic) based on a utility pricing model - it's always going to be worth the 10 to 20 cents it would cost me. However, if it's the last couple days of the billing cycle and I'm just about to enter the L tier on data, I have to worry if that that single query will cost me $11 and I have to ask myself if it's worth doing. I find a tiered model more stressful because of this.

    Perhaps the XS tier would be "all or nothing" (based on my suspicion that support costs are higher for these tiers - but I don't know that) and use utility pricing above that. Utility pricing may still be tiered so minutes 101 to 500 would cost more per minute than minutes 501 to 1000 (again, to reflect Ting's costs as appropriate). Obviously the exact pricing could be determined to generate about the same revenue for Ting as the current scheme does. I don't think hardly anyone who can figure out how to use their phone can't also understand such a model quite easily (esp. with the help of a couple of tools on Ting.com).

    I think I would end up using more data with a utility pricing model as I wouldn't be holding back a bit (even early in the month) to avoid being boosted up to a higher tier.

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  • I hear you Bill. I personally tend to agree with you but we did tons of research and tested different price models before we even announced Ting and the feedback was (almost but not quite) universal that the model we ended up with is what people are most comfortable with.

    It's an interesting debate but to be clear we have no plans of changing our model at this point.

    Cheers,

    Ken. 

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  • Thanks for all the quick responses!  That alone is quite refreshing after dealing with other's customer service.

    Whit make's an excellent point I hadn't considered that a utility rate might very well be higher per unit.  The more I think about it, over the long term with tiers, even though once in a while I might get bumped up, the average cost per minute may very well approach a hypothetical utility rate, especially with the 5% cushion (which is very thoughtful, btw)

    Thanks,

    Michael

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  • I too am curious about this.  I am just about to jump ship and now I'm trying to figure out what I should pick.  I know basically what my normal usage is, but why not just pick XS on all of them and let it bill as used?  Or why not XXL and let it drop?  I just don't understand the point.

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  •  but why not just pick XS on all of them and let it bill as used?  Or why not XXL and let it drop?  I just don't understand the point.

    This question seems to come up regularly. You can pick XS on all options and the results will be the same based on TING's pricing structure; however, customers need some type of reference point. The buckets and tiers (even though they aren't set tiers due to the adaptive pricing structure) are what customers are comfortable with and so TING decided to listen to their focus groups. Personally, I think it is an interesting lesson on pricing that could be applicable to other situations.

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  • I know I would like to see a bit of a compromise between the current model and a utility model. Specifically, I'd like to see a larger number of smaller buckets, especially toward the top end.

    For me, I tend to use about 1200-1300 mb per cycle. This means I always pay for 2000. Not surprisingly, it costs almost double going from 1000 to 2000. I would really love to see a 1500 bucket.

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  • I also would like to see more buckets. Specifically I tend to fall between 100 and 500 MB of data each month and it would be nice to not pay the full tier jump. When I get around to switching my wife to Ting that will most likely be a non-issue but...

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  • Semi related: I am surprised that the larger than XXL "buckets" actually cost more per UNIT than any of the smaller ones.  I would have expected a volume discount or something.

     

    Thinking about this more it is probably just a math error on my part.  I assume that 3000Megs is $60 so 2¢/meg which is smaller than 2.25¢/meg.  But really that is 2000-3000 megs so the average price is $60/2500meg or 2.4¢/meg.   So really the larger bucket is cheaper in a way.  (the same pattern occurs for minutes and texts)

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  • Agreed Wayne.  I would expect them to be no more (and probably less) than the XXL rate.  That being said, I don't even get into XL rate in a month normally so it doesn't affect me too much.  Actually I think those rates they list beyond XXL should be a "Utility Pricing" plan and I would gladly pay for that.  And in fact I do think it would make me worry less about usage, I know I am getting paid what I use and nothing more.  Really this is not a crazy idea.  This is how wireless was and still is in most countries.  The people who don't use much subsidize the heavy users with the "Unlimited" or up to 2GB or whatever.  Sensible pricing for the amount you use is the way it should be.

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  • It'd be really nice if there were a SMS tier between 0 and 100 messages. Say, a 10-message tier that costs $1. I do most of my texting with Google Voice, BUT for work reasons I have to be able to receive SMS by email, and that's usually 1-2 messages per month - and at $3/month for that level of service, those are some pretty expensive messages!

    I mean it's not like it breaks the bank or anything, but it does offend me on a skinflint level.

    Another alternative is if the unused capacity of the tier you're at could roll over to the next month; so, say I use 3 text messages in one month, putting me on the S tier - then if some portion of those remaining 97 messages could stay credited to my account for the next month. Even if it were only 50% that carried over, that'd be pretty awesome, since then I wouldn't have to pay for more text messages until the half-life of the first chunk of messages made them all expire.

    Explaining that might be a bit difficult though. :)

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  • I believe the "waste" is calculated into the cost of the tiers. If it could roll over, the tier prices would likely need to rise to compensate.

    After everything is considered, Ting still needs to make a profit to stay in business providing wireless access.

    Rollover credits, subsidized phones, and free calls within the carrier are just excuses by the big carriers to justify their high rates. You are actually paying for those features, whether you use them or not. Ting is more honest, just charging for features you use, wherever possible. They must be sure they cover their service costs from Sprint, though.

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  • That makes sense. It just seems weird that the distinction would then be between no messages at all and receiving a single message for triggering the entire $3 worth of messaging.  So, at least from a user's perspective, having a 10-message $1 tier would make a lot of sense.

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  • +1 on a 10-message $1 tier. I have text messages just shut down, because I can't rationalize paying $3 a month when most months the only texts I'd get are a few spams. $1, I'd willingly pay, just to keep text open as a channel in case there's a real need (such as in emergencies where crowded spectrum handles text better than voice). But $36 a year for something I might have a real use for only once or twice a year, and which otherwise is a spam channel - can't justify it.

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  • I kind of think this $1 tier that you want should be a new post.  Even though the true utility pricing would address this and much more, it doesn't look like Ting is going to offer that.  So perhaps this reduced tier might be more obtainable.  For the other tiers you get a 10% or 15% leeway, if I remember correctly.  That's hard to do with the XS because it is 0, and we all know what fractions of zero are.  You pay about $.03 per message on the S plan, so wouldn't it be nice if you paid $.03 per message until you get to the S tier?

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  • I want to make it clear that Ting does a better of job of charging you for what you use (affordably), than anyone else.  But their statement that you "pay for what you use" is only halfway true.  If I use 1 text message and another guy uses 110 (or whatever the threshold is) I'm pay the same as him, so I am probably subsidizing part of his service.  It's not a lot of money, so I hate to sound like I'm being too picky.  I really have enjoyed every minute of being with Ting, but this is probably one of the most important feature requests for me.  They don't even have to do it for everyone, just set up another plan with utility pricing and put it around the S or M pricing per sms/minute/mb and a lot of us would see savings.  I want Ting to make a profit, but shouldn't that be based on usage, not on overpaying for non usage?

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  • John,

    Ting changed their Plans page from saying "no waste" to saying "less waste" because we pointed out the false marketing. 

    Where are they saying "pay for what you use"? Perhaps their marketing needs another tweak.

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  • Sure, it's on the marquee on the homepage.  I'm attaching a screenshot.

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  • *Sigh*

    Thanks, John.

    I guess it is time to resurrect an old Ting bashing thread.

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  • Over a year ago up-thread, Ken indicated that Ting had done "tons of research" on this and determined that the model they picked (as opposed to, for example, utility pricing) was almost universally preferred to other pricing models.

    However, focus groups and surveys can be misleading because, frankly, most people are not that analytical or think of many/most of the unintended consequences of policies that they haven't actually lived with. If those being surveyed/"focus-grouped" were accustomed to one of the "traditional" cellular pricing schemes, almost anything would seem better (possibly including carving bits of muscle tissue out of the subscriber only when they were actually using the phone!).

    Of course, Ting has to/had to attract new customers who were coming from really broken pricing models so a somewhat broken pricing model was all they needed to offer and I think they truly believed the tiered model was a good model.

    However, based on various posts I've seen in the forums from prospective customers, there seems to be quite a lot of confusion among prospective customers about the pricing model so perhaps experience tells us that Ting's initial research on this issue may not have been spot on with respect to its "simplicity". As well, it appears that at least some customers that switched to Ting and have experienced the impacts of Ting's pricing model are somewhat uncomfortable with it (and, in my experience, a very small percentage of people actually bother to express their views on such topics). It's common, in fact, for Ting customers to defend the pricing as "it's better than what the other guys offer" instead of "it's a great pricing model" -- i.e., on this topic, Ting customers seem prone to damning with faint praise and that may not be a great business model for the long term.

    I think everyone realizes that alternative pricing likely needs to be at least revenue neutral for Ting so, yes, the first spam text message in utility pricing would cost more than $0.03 - sorry about that! But it's not like utility pricing is confusing -- everyone understands it because everyone uses it daily. Admittedly, often the "higher" usage tiers cost more rather than less per unit in the case of electricity, water etc due to conservation incentives imposed by governments and utilities and Ting would be different in that regard.

    Hopefully Ting is conducting targeted, in depth, surveys/interviews with a range of their existing long term (i..e, six months or longer) customers (not just us whiners here!) now that they have such a pool to figure out if an alternative revenue neutral utility billing model would be preferred and make them more likely to refer customers (I, for example, have explicitly not referred a couple of relatives because I don't want to explain and take responsibility for the hidden demons of the current pricing model where a single spam text message some months costs $3).

    Based on an article I read a while back about MVNOs and their arrangement with the carriers, I wonder if Ting is unable to change their model without a lot of renegotiation with Sprint and if that's a source of resistance on this matter. IIRC, this article said that MVNOs present a proposed pricing model to the carrier including some sort of "revenue split" and that the carriers approved/rejected the plan (presumably after some back-and-forth on details). The carriers, presumably, don't want the MVNOs to cut into their business models more than the revenue received via the MVNO would justify. So, it's possible that Sprint just would reject a utility pricing model with Ting either because they foresee offering one themselves in the future and don't want an MVNO at the party or want to reserve that arrangement for an existing or future MVNO with a higher revenue split. Yep, wild speculation on my part but when I see what seems like irrational behavior by a business, I assume it's not really irrational and try to figure out what would make it rational (of course, sometimes it really is irrational and I wasted time thinking about it)!

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  • Like Ken said, many people find pure utility pricing too much of a jump from the major carriers. The utility pricing market was more crowded a year ago too. Ting's success indicates they likely made the correct choice. Many of the utility priced carriers have moved to monthly plans, indicating utility priced business models did not work too well.

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    • Ting's success indicates they likely made the correct choice.

    It's a little hard to say that, since it's the only pricing scheme they've had.  Who is to say that if they didn't offer it the way I've been hoping they wouldn't have 10x as many customers?

    I personally never said Ting was wrong, and I understand that some people may be turned off by it (even if they might be wrong). I'm not going to beat a dead horse, and I just deleted the three paragraphs I typed when I just did that.  My request (if possible) is not that they replace their current pricing scheme, just add another option to pay per unit and include their margin/fees that they need in order to be profitable.  That's it, and what could be more simple than that?

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  • Perhaps those that want "other options" may want to find another carrier?  Ting doesn't have contracts.  I'm just saying...

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  • Yep, that's always an option.  If someone beats Ting to it at an affordable price, then they'll probably win me as a customer...  

    I'm going to unsubscribe from this thread now, it's been beat to death and trolling is now starting it seems.  Keep up the good work Ting, and thanks for the conversation everyone.

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  • I admit I didn't quite understand how the buckets worked when I signed up.

    I actually thought it was a hybrid system, where you paid a utility price per unit, until you reach a tier/bucket threshold, at which point you are "rewarded" with a discount price for that bucket.  Then you continue with utility price if/until you reach the next tier.  Would that be a nice compromise of the two systems?

    It really was not made clear to me that if I made a couple of calls or texts, I would be charged for 100 of them.

    For low-income users like myself, the current Ting system hurts me.  I rarely use SMS or voice, and when someone calls or texts me, I hesitate to answer because I know it will be a $3 call/text.

    It seems Ting is inflexible on their system, so I'm going to have to look elsewhere.  I'm sure they won't miss my $10-15/month, but for me, every dollar counts.

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  • Daniel,

    I can understand that. Before we came to Ting, my wife had a phone, mainly for emergency uses, with another Sprint MVNO. When we moved to Ting, it actually cost us more, but she gained more functionality & is using hwer phone more.

    For extremely low usage, you might want to check out Kajeet. Although they are aimed at teenagers, they work for others too. They start at about $5 per month with metered rate for usage over that.

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  • this is an old topic but its the first result that came up when i did a search.  I think it would be nice to have more flexibility in the 0-100 range.  for example if I use 20 minutes, 10 texts and 40mb of data a month, I am going to pay for something that I am not even using.   I don't like being left with a feeling like I should  force myself to try to use close to 100 minutes a month, or 100 texts etc, just so I don't feel like I am paying for something and not getting much in return.

     

     

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  • All I can suggest is to read over all the messages since 2012. I think you will find this subject has been covered extensively and little more can be added.

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  • thanks for your "valuable" input to this topic mike.  I will now sleep better knowing you told me that.  Oh what would I do without such words of wisdom from you.

     

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