£5 for 5GB

[#1]

@Zap, I do get it (I've spent a long time in customer support), but I can see we're never going to agree here. I am sorry if you think that we'd do this on a whim, or to deliberately upset customers 'cos nothing could be further from the truth.

[#2]

Quote from: Be3G

I suppose, but I think the operative word in my previous post is ‘dubious’. For example, when Plusnet put up the price of the home phone service last year, it was perfectly understandable because it was well known that BTW had put up their prices too – so I had no qualms with that. But I'm just not sure there's a similarly sound justification for the price increases being discussed here… I strongly suspect they're as a result of three things: Plusnet forking out for more capacity than expected during past few months owing to network difficulties; A need for subsidisation for Extra; A loss of subsidisation funds from the Pro customers on market 3 who'll now pay £3.50 less a month.

Regarding these points:
1) Our capacity has been added slightly ahead of forecasting, but not so much that we'd need to change our entire model because of this.
2) Why would we release a product that needs subsidising from the start?
3) Pro doesn't subsidise other products, so not applicable.

Quote from: Be3G

Both of which could have been avoided with better planning, and by making each individual product self-sufficient in terms of revenue. Of course I could be completely wrong, and I know you're not at liberty to say… although if you can point me to the supposed supplier cost increases mentioned in the Community FAQ, I'll gladly eat my proverbial hat. But either way, I hope you can see where I'm coming from nonetheless.

In the last year changes have been made to bandwidth pricing on 21CN, access charges on 21CN, activation, ceases and various ancillary charges on 20CN.
There are upcoming changes too (in April and June), which we have to take into account.

[#3]

Mand,
In simple terms please could you explain why it is necessary to charge (based on new prices on Market 3 exchanges):

77% of monthly subscription for a 50% increase in allowance on Value

30% of monthly subscription for a 25% increase in allowance on Pro

43% of monthly subscription for a 8% increase in allowance on Extra
The traffic priorities are part of the calculation of the base cost and the extra usage is still prioritised in the same way, so why don't the costs for extra usage reflect those differences?
If extra 5GB extra usage on Extra was given the same priority as 5GB extra usage on Pro you would be justified in charging the same amount.

[#4]

'Cos that's what the bean counters say.
These products and changes have been extensively modelled by our products, marketing and finance teams, I'm not party to those financial discussions. I have asked the question, but to be frank, I can't see them allowing me to publish the finer details of our financial modelling for the whole of the internet to see.

[#5]

Quote from: Mand

2) Why would we release a product that needs subsidising from the start?

Not sure if you intended that to be rhetorical, but I'll answer anyway: simply because I would have thought it would be appealing to the ‘bean counters’ as you call them, in order to be able to advertise particularly cheap prices. E.g. given the choice between charging £7 for Value + £19 for Pro, or £6 for Value + £20 for Pro, I would imagine Plusnet would opt for the latter in order to drive down the headline price that's plastered all over London from £7 to £6. (Obviously those figures wouldn't work in real life for many reasons, I'm just using them as a demonstration of the concept.)

[#6]

I can see why you'd think that, but that would be counter-productive.
All of our products need to make a profit individually. Obviously we wouldn't want all customers on the same product (if absolutely everyone was on Value we wouldn't make enough money, if everyone was on Pro we'd need a lot more bandwidth so wouldn't make enough money).
I think the balance of the product is very good, and you guys have agreed in this thread.
They've been modelled, and they cost in.
The headline prices are very attractive as they are. We don't need to drive up the price of other products to drive down the base price.

[#7]

Ok Ok you win.

[#8]

Quote from: Mand

....These products and changes have been extensively modelled by our products, marketing and finance teams, I'm not party to those financial discussions. ....

As already stated the majority of customers use extra GB per month use lots extra. Fine, if say 80% use multiples of  5GB etc, that still leaves 20% that don't. To keep the maths simple, all the 20% use less than 2GB extra. Based on 100 customers that would be 20 customers generating £40 income. On the new model those same 20 customers would generate £100 income! A £60 increase in revenue based on the customer not doing anything different than normal.
Drop that percentage down to 10% it still generates an extra £30 per month. Now scale that up to the number of customers and this slight change can generate lots additional revenue for no extra cost to Plusnet. Yes the Bean Counters have done their maths and seen a good way to maximise profits at the expense of those people that only go a small amount over their paid for limit.

[#9]

Quote from: Be3G

Ok Ok you win.

I do like to win.

[#10]

Quote from: Mand

@Zap, I do get it (I've spent a long time in customer support), but I can see we're never going to agree here. I am sorry if you think that we'd do this on a whim, or to deliberately upset customers 'cos nothing could be further from the truth.

Let's be clear here Mand, you have single handedly saved the day on more occasions that I can mention, you ARE a superhero, I know that, that is why I have such high expectations of you and why it saddens me to see Plusnet make such daft mistakes.
When you have been a customer for so many years you feel a sense of ownership, Plusnet is more than a supplier and we don't want you to force us to move on or treat us in such a way that we feel we have no option.
I am sure it is not a whim, I suspect it comes from upon high, by that I mean BT.
Should I assume that as I have not had a price increase email, that my prices are not going up on my legacy product?

Quote from: Mand

These products and changes have been extensively modelled by our products, marketing and finance teams, I'm not party to those financial discussions. I have asked the question, but to be frank, I can't see them allowing me to publish the finer details of our financial modelling for the whole of the internet to see.

You forgot to include one party in that modelling exercise - the customer!  Even if you can involve us you can say "what does this mean to each customer type".  You (Plusnet) either did not do this or did it and ignored it.
It is very easy to model "what If" on spreadsheet models but the factor often not included or under estimated is how much business it will lose you.
I think if you have to do this then do it at 5% of the bandwidth as detailed in my earlier post.
Can some customers on different plans please post what the price rises are going to be please.

[#11]

Well i am completely bamboozled 
I am still on 'Unlimited' paying £19.99 and have thought about downgrading recently, the Plusnet 'Extra' package looks ok for me.
How much is Plusnet 'Extra' on a market 1 exchange?

[#12]

Quote from: Spider

As already stated the majority of customers use extra GB per month use lots extra. Fine, if say 80% use multiples of  5GB etc, that still leaves 20% that don't. To keep the maths simple, all the 20% use less than 2GB extra. Based on 100 customers that would be 20 customers generating £40 income. On the new model those same 20 customers would generate £100 income! A £60 increase in revenue based on the customer not doing anything different than normal. Drop that percentage down to 10% it still generates an extra £30 per month. Now scale that up to the number of customers and this slight change can generate lots additional revenue for no extra cost to Plusnet. Yes the Bean Counters have done their maths and seen a good way to maximise profits at the expense of those people that only go a small amount over their paid for limit.

So, the customers who go over by lots either have no impact and carry on as they were, or upgrade to a product which is better for them and costs less money (and so less profit for us). The customers who get close to their limit can either use DTW to control their costs, or can pay the extra, or can choose a different product (only one of these options gives us more profit).
You can use a hundred different scenarios, some of which will make us more money, some of which will make us less, some will even out.
Or we could wait and see.
*is considering starting some less controversial topics in chit-chat, like religion, or politics, or football*

[#13]

Mike posted a reply back in reply 145 with what he thought all the prices are/will be, and Mand said it looked correct.
Phil

[#14]

Quote from: Zap

Let's be clear here Mand, you have single handedly saved the day on more occasions that I can mention, you ARE a superhero, I know that, that is why I have such high expectations of you and why it saddens me to see Plusnet make such daft mistakes. When you have been a customer for so many years you feel a sense of ownership, Plusnet is more than a supplier and we don't want you to force us to move on or treat us in such a way that we feel we have no option. I am sure it is not a whim, I suspect it comes from upon high, by that I mean BT.

Thanks, I for one am glad you have high expectations of us. I understand the sense of ownership, we've actively encouraged this in the past, and will continue to do so by having discussions such as this and taking feedback (for instance the Extra product has features which you guys have been requesting for a while). I can assure you we're not trying to force anyone on, again, that would be counter-productive.
With every product refresh there are things that some of you like, and that some of you don't, 'tis the nature of these things. I am passing your feedback on, and will continue to do so, but at the moment the decision has been made.

Quote from: Zap

Should I assume that as I have not had a price increase email, that my prices are not going up on my legacy product?

Yep, the price changes apply to Value, Premium and Pro.

Quote from: Zap

You forgot to include one party in that modelling exercise - the customer!  Even if you can involve us you can say "what does this mean to each customer type".  You (Plusnet) either did not do this or did it and ignored it.

It was modelled on the existing customer base, and what we expect new customers to be like. Every major decision has customer impact as a massive part of it.

[#15]

Quote from: mrmarkus1981

Well i am completely bamboozled  I am still on 'Unlimited' paying £19.99 and have thought about downgrading recently, the Plusnet 'Extra' package looks ok for me. How much is Plusnet 'Extra' on a market 1 exchange?

It'll be £11.49 for 3 months, and then £17.99.