Hi all,
As many of you know, on Friday I updated everyone on our
plans in the run up to our first birthday and Christmas - One of the
announcements was regarding the removal from sale of the £30 goodybag, which raised
a number of concerns and questions.
First off I want to thank you all for your feedback. As
always this is very much appreciated and we take what you think very seriously
in all of the decisions that we make.
The are two simple reasons why we’re removing the £30
goodybag from sale. …
a. It wasn’t very
popular - less than 5% of members were buying it. We tried to make it more
popular by reducing the price. This didn’t work.
b. Unexpectedly high
usage by a minority meant it was no longer affordable for giffgaff. Over time,
if left un-checked, this would have made the business significantly more
expensive to run and hence undermined the lower cost model we all want to sustain.
An example of the extremes of usage we’ve seen are the 4% of
members on the goodybag, using an average of over 5000 and in a few cases in
excess of 13000 minutes a month. Some of
these members were losing giffgaff over £500 per month - and you can imagine
what that did for the overall profitability of the £30 goodybag.
We hesitated to reveal details of the profitability of the
product because of the difficulty of then continuing the discussion without
revealing commercially confidential information that would be of use to a
competitor. But I hope you can appreciate from the information we have now
released that we had an urgent need to review the future of the product.
We realise we could have avoided some of the discussion
around this had we shared this information upfront - and this is something that
will inform how we make announcements in future. Please continue to send
feedback and questions so that we can make sure we respond to all of your
queries as soon as possible.
Another topic that was raised was consultation.
First of all I’d like to reiterate the commitment to
consultation and that this remains one of the guiding principles of the business.
We felt we had discussed what “unlimited” meant with the
community many times with the overwhelming opinion being that if it can’t
remain unlimited without a fair usage policy then take it away. Combining this
with the usage profile we were experiencing we felt that there weren’t many
options for us to put to the community in the first place.
Although we have been doing a lot of planning and continue
to plan for growth of involvement from the community, product development is
one of the most difficult areas because of complexity, commercial
confidentiality and the fact that we have to take into account not only the
existing (vocal) community but also those members that remain silent and of
course the prospective members we want to attract in future.
So the upshot of this experience is that we’re going to work
on releasing the framework about how we’ll engage in future earlier than
planned – our community manager, Vincent, will update this blog later in the
week on this.
We had planned to start a consultation in the new year about
a bigger bundle goodybag as we don’t have capacity to deliver anything else
before Christmas – but now we’ve decided to start early.
So to start this off now, if you think a goodybag (with
limited minutes) will be popular at a price point of around £25 why don’t you
let us know?
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