My old economics professor likes to use Scott Adams' term: a confusopoly. (http://blogs.hbr.org/cs/2011/03/is_paul_krugman_click-worth....)
The pricing is supposed to be complicated, so you don't pay much attention to it.
A Rule of Thumb: Pricing Should Be Simple
11–20 of 28 posts
Re: A Rule of Thumb: Pricing Should Be Simple
#12So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
Well, the iPad's pricing is relatively simple to figure out: $499, plus $100 for every storage increase after that. If you want 3G, that's $130 extra. The New York Times, on the other hand, seems less logical. The website+smartphone app is $15/4 weeks, the website+tablet app is $20, all three is $35, so the website is worth... nothing? Or, you could go with the home delivery option, which would cost you $455 (all dig…
More importantly the iPad's pricing is normal. The Nook, the Kindle, and the Xoom all come in different versions. People expect to pay different amounts for different hardware.
Nobody's doing what the NYT is doing. Netflix and Hulu are given as examples of content producers that have a simple pricing scheme over multiple devices. Lots of people use those services. The NYT pricing not only violates expectations for online content, it doesn't even seem typical for newspapers. Paying per 4 weeks instead of per month? Who has ever done that?
Re: A Rule of Thumb: Pricing Should Be Simple
#13Earlier quoted context omitted.
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 any…
I have a simple cell phone plan. It's called Ben ( 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!
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.)
Re: A Rule of Thumb: Pricing Should Be Simple
#14I 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 p…
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 any…
> 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. :)
Re: A Rule of Thumb: Pricing Should Be Simple
#15So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
There are 6 prices for iPads. 16/32/64 Wifi. 16/32/64 3g. I would say people would care about the other NY Times plans. I would personally much rather use a NY times App on my iPad (Which would mean the $20.00 plan) versus using it on my iPhone. But if I wanted to use both apps, it would cost $35.00. It's cheaper just to get the physical paper delivered to your house.
But for 3g you also have to price in Verizon vs ATT as they have different pricing structures.
Re: A Rule of Thumb: Pricing Should Be Simple
#16Earlier quoted context omitted.
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 any…
> 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. :)
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.
Re: A Rule of Thumb: Pricing Should Be Simple
#17I absolutely agree with this-
I've been in negotiations with a CDN for the last week. They refused to send me real numbers, or give me a test file.. It was "Let's set this up, and a third party source will verify".
What's the price?
It depends on you, and what your needs will be in 9 months, and the phase of the moon, and my mood and and and.
They ended up quoting me three different prices, each going UP because they forgot they gave me the more basic price earlier.
Eventually, I decided to go with a competitor- Went to their website, click, click, done. CDN is up, I'm rocking in 20 minutes.
Would I have been happier at CDN A? Maybe. But I'm not going to dick around in sales meetings for 2 weeks to find out.
Re: A Rule of Thumb: Pricing Should Be Simple
#18So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
And what's with the gratuitous snark about a car being something people "think they need"? Presumably these are the unenlightened few who don't realize that if they aren't banging out apps from their homes they can damn well walk the three blocks to the WiFi cafe.
Re: A Rule of Thumb: Pricing Should Be Simple
#19So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
Your confusing # of prices with the simplicity of the pricing scheme. With Apple, I can justify to myself why I'm paying more for a product (eg. size increase, 3G). With the NYTimes, its hard to justify why I should pay more for (1) a digital copy and (2) the same content on different platforms.
Re: A Rule of Thumb: Pricing Should Be Simple
#20My old economics professor likes to use Scott Adams' term: a confusopoly. ( http://blogs.hbr.org/cs/2011/03/is_paul_krugman_click-worth.... ) The pricing is supposed to be complicated, so you don't pay much attention to it.
Dilbert Link:
http://search.dilbert.com/search?w=confusopoly&x=0&y...