November 22, 2005
All your profit are belong to us
Spotted on my evening walk around Edinburgh a few days ago:
We’ll be offering them big discounts to join us so we can fleece them later with more discounts.
Actually, it’s quite clever, because it makes it hard to do price comparisons between operators and does genuinely lock-in subscribers as long as the discount is comparable to the new subscriber offers and you keep offering subsidised handsets. On the other hand, billboard ads are probably an expensive way of spreading the message. New customers are unlikely to be swayed by a 10% discount a year or two out, and you’ve already got a database with the name and addresses of post-paid customers, to whom you send a bill evenry month.
Here’s an example of some nice segmentation and price discrimination going on, as spotted in the Vodafone store on Princes Street:
Now despite all the hoo-hah about the death of traditional marketing and how we’re all supposed to be conversational Marketing 2.0 by now, I do find this one rather good, both as an ad and as a business proposition. A clear demographic who are price-sensitive, likely to churn unless given a good reason not to, and will become high-revenue users as soon as they get a real job. Plus they get to self-certify themselves with relatively fraud-resistent student ID. Plus the picture was taken near the start of the academic year, showing some timing sense at Vodafone. Given Sprint’s ARPU success with flat-rate data plans, perhaps Vodafone are onto something good here?
Posted by Martin Geddes at 12:44 PMTrackBack URL for this entry:
http://www.telepocalypse.net/cgi-sys/cgiwrap/mgeddes/MT/mt-tb.cgi/614.
Hi Martin,
The Vodafone service is a great example of how a carrier has really got their service differentiating advertising right.. For me proof that this is a good thing is looking at the impact O2's inception of the 'text bundle' product.
N
Posted by: at November 22, 2005 05:43 PM