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How to achieve clarity in pricing. Hint: do not emulate Rogers Wireless.

I finally did get my Rogers iPhone upgrade issue resolved, yesterday.  Using the suggestion made by Larry Borsato, and others, I called and asked for “Customer Relations”, which is sometimes also known as “Customer Retention”.  These folks have a certain amount of latitude in what they can charge a customer.  Even so, the Rogers Customer Relations representative on the phone was not able to give me the advertised price of $199 for the iPhone.  It appears that Rogers has taken a cue from the airline industry, implementing some sort of yield management system for pricing the phones.  The result is that if you haven’t been a heavy user of your previous phone, you don’t get the best pricing on an upgrade, and the only way to know what price you will get is to call and ask them to price the phone.

As previously noted, the Rogers Customer Relations department has some latitude in pricing.  However, even the representative that I worked with was unable to discount the iPhone to the advertised price.  She recommended that I port the number to FIDO, and buy a new iPhone there — saving $30 in termination fees in the process.   However, FIDO’s rates are a little higher than Rogers.  In the end, rather than discounting the iPhone, she credited $100 in service to one of my other Rogers mobiles, bringing the total bill to $236 for the iPhone.  It still wasn’t the advertised $199, but it was close enough.

And then we got onto figuring out the service plan.  A half an hour later, with several pages of notes written out in my notebook, I had a headache, mostly all the features we wanted, and was spending a couple of bucks more per month.

The worst part?  I pick on Rogers, but I don’t believe that they’re that different from any other carrier — at least in Canada.

There are two lessons here for marketers.

1. Clarity in pricing actually matters.  Rogers can abuse its position as the monopoly provider of GSM phones in Canada for now, but heaven help them if there’s ever an alternative.  Give a consumer a clear value proposition with a clear and simple price, and you will have more sales, guaranteed.  So far as mobile phones go, that day can’t come soon enough for consumers.

2. Complex option packages, while popular with bean counters and MBA’s, are deeply unpopular with consumers.  I spent close to 1 hour with a service representative sorting through these details.  It was a colossal waste of time for me, and an unnecessary expense for Rogers that could have been avoided by simplification.  Moreover, there were several times that I nearly exploded at the perversity of Rogers pricing models.  It couldn’t have been fun to be the person assigned to serve me.

Bottom line: Buying my son an iPhone should have taken 15 minutes. In the end it was hours of work spread over a three week period, due to the complex pricing model Rogers has chosen for iPhone.  A less persistent individual might have walked.

When we built the pricing model for our Calliflower Conferencing Service we had several discussions about option packages.  In the end we opted for simplicity.  The premium version of Calliflower sells for $50/month, for 2 users, and $25/month for every user after that.  And for that price you get unlimited calls and unlimited document sharing sessions, with as many people as you want.

Options?  Who needs ’em!

{ 4 comments… add one }

  • Jonathan Jensen November 19, 2008, 5:01 am

    The mobile operators also need to take a look at their tariffs – something I wrote about last week. http://bit.ly/16kZ6

  • Elliot Ross November 19, 2008, 8:41 am

    I admire your patience

    I would have packed up & walked ……

  • Dustin Randall November 19, 2008, 12:46 pm

    One must wonder if this has something to do with the amount of money Apple gets for every account. While I applaud them getting the industry to change, it feels like the consumer is taking the hit for it.

  • Me June 15, 2009, 5:34 pm

    Ive been having problems with my other cell phone. I called Rogers they told me the best price for an IPhone was $950.00. Plus the add on of another three year term. All I said was B.S.

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