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A bit of news about our pricing

newcomer

Hi I’m Kylie, the Marketing Chief and wanted to give you our thinking on pricing so far, but more importantly understand what you think.

As the gaffer said last week, we’re making lots of progress towards our launch.

When we announced giffgaff to the trade a couple of weeks ago, we were pleased that people seemed to be interested in our idea. Lots of people were really positive, while some were more sceptical (but we’re determined we’ll convince the Really Mobile Project guys one day!). And we enjoyed all the great chats we had with some really cool people, and it’s all helping as we get everything into shape to go live later in the year.

The big question most people naturally had had was about our pricing. So we wanted to tell you more about our thinking, and ask you about a couple of things.

So here’s what we’ve told you already: Being people powered means we can keep our costs low, and pass the savings on to you. And we want to keep things simple and transparent.

To that end, we were going to launch with one simple per minute / per text rate. We thought it was the most simple and transparent way of doing things. And we’d make sure it was among the lowest in the market.

But we’re not sure anymore. Our research tells us that around 64% of people don’t know what they pay for individual calls and texts. Because the other networks sell everything in bundles, that’s what people know - they get 300 texts for £10 or whatever. The problem is that if we price per minute / per text, people won’t be able to compare and see what great value we are. And yet we don’t want to do bundles, because we think they’re complicated and not clear.

So we need your help. How do you think we should charge? Per minute / per text? Or bundles? Or something else?

What we *do* definitely know is that data is really important to people who are interested in giffgaff. So we’re going to have a really great data price.

In fact, when we launch, data will be free. Honestly, that’s because we won’t have had time to build the bit of our backend system to charge for it, and yet we don’t want to launch without data - so we thought we’d just let you have it. All we ask is that you don’t take the mickey, and that you do give something back by topping up, making calls, answering some questions, doing some marketing etc.

Data won’t be free forever. It can’t. We won’t stay in business very long if we just give stuff away! We will have to charge for it, once we can. So again, we’d like your views on what’s a fair and simple way of charging. Price per Mb? Price per day? Unlimited with a certain level of monthly top-up? Or something else?

We’ll introduce our forum later in the week that will make these kind of discussions easier. But for now go wild in the comments below, or on Twitter (@giffgaff if that’s your thing).

39 Comments
Hi Kylie

Whatever you do, you should have one single tariff.

I hate how every other mobile phone company has literally 1000s of tariff combinations under the guise of offering you better "value" when all it really does is over-complicate and lead to people paying more than they should.

I don't have to tell my water company in advance how many litres of water I will use in a month and pay a certain amount for x litres, and they don't charge me an extortionate amount per litre if I go over that quota, so why should it be any different with my mobile phone service provider and my minutes?

One other thing - when you talk about data pricing a lot of people can easily get confused between bits, bytes, megabytes etc. So please make it easy for them and don't confuse Mb with MB and Kb with KB, as you may have done with this post ;-)
newcomer
Could you possibly have a system of "credits" instead of numbers of minutes/texts and amounts of data usage? This would mean that a call to a UK landline/mobile would cost x credits, a text would cost y credits, and 1kb of data (see Andrew Woodvine's note about units!) would cost z units. Then you could charge different rates in "credits" for international calls, international texts, roaming, etc. You could make credits cheaper if you buy "bundles" in advance (cf. Virgin Mobile) or you could go pay as you go, where a credit costs a set number of pence.

Just a sketch, but it's something I've wanted for ages!
newcomer
Ideally I'd want you guys to be totally honest with us about the costs involved for you. i.e. How much does it cost for you to deliver an SMS? How much does it cost for you to connect and maintain a voicecall or a 3G data connection?

Correct me if I'm wrong but I assume the costs you incur bear very little resemblance to the prices we are charged. For example an SMS message costs almost nothing for you to deliver but has come to cost us (on average) 5p.

Perhaps once we're in possession of the facts and figures we can begin to build a package that has value for us and is commercially viable for you?
Sam newcomer
newcomer
Hi,

Perhaps you could introduce something similar to T-Mobile's flext tariff? e.g. £80 credit per month, and that includes all texts, calls, internet browsing, mms etc. But like you mentioned, the key thing is simplicity. So why not do something people can remember? e.g;

10p/min call
5p/min text
15p/mms

and introduce a 'bundle' whereas you can get unlimited internet, for example, a fiver off your credit every month, instead of extra on top. this could also open the door for a good marketing campaign, something along the lines of;

'GiffGaff. We like to keep things simple. You get an allowance each month, and you can use it for everything you could possibly do with your mobile. GiffGaff: Unlimited Possibilities, Fixed Cost'
Definitely need an unlimited data plan. People with smartphones (and the phones themselves) expect to be always connected.
How about becoming the first network not to treat 0844/0845/0870/0871 numbers as a massive cash grab, and actually charge them at the rate they should be charged at (5 or 10p above normal) instead of 40p or so /minute. Would generate lots of good press and good will, and differentiate your service.
newcomer
I like the idea of being told "these things cost us £x.xx per whatever, so we're going to charge you that plus 20%, or whatever.

If cost price goes up, so does the end users' cost. If cost price falls, the end user sees a reduction there and then.
In reference to my earlier idea about 08 numbers, how does this sound:

Want to call your bank? T-Mobile, pay 40p a minute, giffgaff 10p a minute... (this is true, most banks have 08 contact numbers)

'Making your everyday calls cost less' etc etc
newcomer

The only way I can see to make it truly uncomplicated is to say It's going to cost you £x per month for everything. Lets be honest, a lot of people don't use their allowances, and then there are those who are heavy users, so as long as the price averages out the useage and still makes a profit, then it works.

 

If you had a threshold such as 500 texts/ minutes and said if you dont use that many in the month, then we give a rebate then that would make it fairer to the lower users too.

 

I agree about the 08 numbers. would be great to get rid of those costs.

beginner

Keep it simple and clear. No other network that I know of does this. The fact there have been Maths degrees around finding the best mobile phone deal!!!!

 

If you keep it simple, clear and honest people will run to you.