Hi All
As promised I would like to address some issues bought up by last Monday's pricing release from Web Africa. Firstly context: the point of this is to address legitimate concerns and to counter some misconceptions that have cropped up in the past week and a half. I will attempt to be as fair, accurate and honest as possible. It may not be what some people want to hear, or care about; that is fine, but I think for some, there is interest. So I would ask you to be respectful of others, myself included.
I will start with generic background information and then get on to the specifics and details further down.
“Your pricing backfired completely you are out of touch”
That is not accurate. The response was heated and massive, and in many cases bitter and angry, because of the pent up demand and expectations. The reality is, no matter what pricing we came out with, people were going to be disappointed, but we certainly know exactly what users want.
Our biggest fault was twofold though:
1) Not downplaying the hype that had built up and allowing it to continue to build.
Because of the aggressive pricing we've been releasing, e.g. in hosting and innovations like our freezone, people's expectations of us ran high. However in our defence, we never said we were going to release pricing to beat everything in the market, across all the adsl product ranges, at the lowest cost per GB. But this is what people were hoping for, we would even goes as far as saying ‘expecting’.
2) Releasing mainstream pricing to the power users (mybb) and not making this clear
On the charge that we are out of touch, this is not true at all. We are very, very aware that the main needs of this community, is bandwidth. “I want lots of it, and give it to me CHEAP” This is the mantra. We have always known that.
Now here is where things diverge. WA is becoming mainstream, this is where we are going. This is not a BAD thing. It is good for you, and for us, in the long term. While the markets adjust to the bandwidth explosion (and behind the scenes it really is happening, we are laying fibre as we speak, working on better deals etc). What is attractive to the mainstream, is never going to work for the power users.
Does Telkom or Mweb care at about myBB? No. People will carry on buying from them, and the opinions on this board, have little effect in terms of market share. Most people enjoy stability and go with a known provider. The point of this is to merely reinforce the reality that there is a mainstream.
On the stability issue the landscape is littered with those maverick ISP's that come and go. AYCE (all you can eat) - remember them? Look at how they were being touted as "liberators" on myBB in 2005 before closing their doors 2 or 3 years later. Just dig up the forum posts from around then. Or the Non Profit ISP who decided to put an end to the "big evil ISP's profiteering" etc. Many got caught up in the hype, but the reality turned out to be more sobering.
You can deny that such market segmentation exists between mainstream users and mybb, but you would be denying the reality and facts. If necessary, I will go into more detail if I have to.
Q: Why is there such a huge response?
People were expecting something revolutionary. Instead, we provided a platform for evolution. Quite simply, we are innovating, its just not all in one go and you can have things cheap, on time, or good quality. Pick two of those. We learned our lesson last year when we rushed out our billing and suspension upgrades (in around mid 2009 to stop us hemorrhaging costs from bad payers,fraudsters and abusers who had taken advantage of our informal and relaxed collections process) and many good and loyal customers got caught in the crossfire unfortunately. We eventually got it right and the systems are working much better now, people pay on time and have gotten used to it, and we get to stay in business, but we not going to rush anything anymore at the expense of customer operations. Stability and reliability cannot be sacrificed to in order innovate faster.
Afrihost can do R29/gb, why can't you match them?
For mainstream: The question is can they match us? Where are the complete offerings? This is what is going to count in future.
For power users: Afrihost have stated themselves it is a limited offer (according to Giaan the CEO, in numerous posts and on their own website). It is not sustainable. Even if they get it for cost, less 10%, you can't run an ISP on that GP. It doesn't exist anywhere in the world. These are the facts. Forum members are welcome to say "we dont care - blah blah". Fine and we hope you pick up some of our future specials at better rates.
Thus, let’s compare specials. We are doing 30GB for R199; so that's R6.66 per GB, which is more competitive by far. Now a fair criticism is that it’s far too exclusive (100 people). Look, it’s a significant amount of revenue we are simply giving away. But overall I agree with the assesment that we need to do more, we will. We are going to announce something "imminently" in that regard. Which will be in line with the expectations of the myBB community.
"But they took the marketing budget to make it work. Its ingenious"
Those in the industry know that that statement is a nice story, but one would have to be very naive to believe it. Simply not true when one does the calculations
Q: Why haven't you dropped pricing?
The fact is we are dropping prices and leading the way with the larger ISP's. We have across all our products seen an average decrease of 20% price drop. Our Complete range is now the most competitive around overall.
Look at the annual costs one might pay for a broadband connection. Even though the its apples vs oranges I still included a Telkom + 29gb combo for comparison sake though don't let that distract as anyone on 29GB packages generally are not the market for a Complete solution anyway.
R1 drop in prepaid. It's insulting!
The R69 price change was merely cosmetic and its not a price drop at all. The focus has moved. Prepaid is a model that only works in a data scarce environment. ISP's that cling to that, will not be around for long. The trouble with prepaid is the overselling potential is zero. We want to deprecate "prepaid only" accounts altogether down the line. Thus we focused on making our Complete range attractive. We envisioning 10GB to be the entry level not 1GB and then 20gb 30gb 50gb 100gb etc down the line for the Complete series.
You are buying support with specials
Absolutely. We are supporting you. Is this somehow meant to be a bad thing? We could have made a choice saying, forget myBB, they not worth it. But we didn't and we won't. We've spent weeks deliberating of some way to make it work so that we could continue to grow and still support myBB. And yes, goodwill is generated, just like with other R29/gb specials at the moment. Ours is better, but just more exclusive. However as I mentioned above, we need to do more and we something in the works already which will be in line with expectations of myBB.
Objective metrics
Let’s look at the numbers now. Customer signups are at biggest month in 5 months. Cancellation levels are within normal range. If we track support and promotion metrics; and overall our customers love us. Our most recent survey has 90% positive approval across our base. Obviously pricing is still the biggest gripe and we think our complete range addresses this very nicely for the mainstream market. Why do we do this? To make sure we kept sane.
Customers are really happy and thankful for upgrades. This is the feedback from sales. We are being proactive; and upgrading them to higher packages, at no additional cost, or cheaper. Who else is doing this?
As promised I would like to address some issues bought up by last Monday's pricing release from Web Africa. Firstly context: the point of this is to address legitimate concerns and to counter some misconceptions that have cropped up in the past week and a half. I will attempt to be as fair, accurate and honest as possible. It may not be what some people want to hear, or care about; that is fine, but I think for some, there is interest. So I would ask you to be respectful of others, myself included.
I will start with generic background information and then get on to the specifics and details further down.
“Your pricing backfired completely you are out of touch”
That is not accurate. The response was heated and massive, and in many cases bitter and angry, because of the pent up demand and expectations. The reality is, no matter what pricing we came out with, people were going to be disappointed, but we certainly know exactly what users want.
Our biggest fault was twofold though:
1) Not downplaying the hype that had built up and allowing it to continue to build.
Because of the aggressive pricing we've been releasing, e.g. in hosting and innovations like our freezone, people's expectations of us ran high. However in our defence, we never said we were going to release pricing to beat everything in the market, across all the adsl product ranges, at the lowest cost per GB. But this is what people were hoping for, we would even goes as far as saying ‘expecting’.
2) Releasing mainstream pricing to the power users (mybb) and not making this clear
On the charge that we are out of touch, this is not true at all. We are very, very aware that the main needs of this community, is bandwidth. “I want lots of it, and give it to me CHEAP” This is the mantra. We have always known that.
Now here is where things diverge. WA is becoming mainstream, this is where we are going. This is not a BAD thing. It is good for you, and for us, in the long term. While the markets adjust to the bandwidth explosion (and behind the scenes it really is happening, we are laying fibre as we speak, working on better deals etc). What is attractive to the mainstream, is never going to work for the power users.
Does Telkom or Mweb care at about myBB? No. People will carry on buying from them, and the opinions on this board, have little effect in terms of market share. Most people enjoy stability and go with a known provider. The point of this is to merely reinforce the reality that there is a mainstream.
On the stability issue the landscape is littered with those maverick ISP's that come and go. AYCE (all you can eat) - remember them? Look at how they were being touted as "liberators" on myBB in 2005 before closing their doors 2 or 3 years later. Just dig up the forum posts from around then. Or the Non Profit ISP who decided to put an end to the "big evil ISP's profiteering" etc. Many got caught up in the hype, but the reality turned out to be more sobering.
You can deny that such market segmentation exists between mainstream users and mybb, but you would be denying the reality and facts. If necessary, I will go into more detail if I have to.
Q: Why is there such a huge response?
People were expecting something revolutionary. Instead, we provided a platform for evolution. Quite simply, we are innovating, its just not all in one go and you can have things cheap, on time, or good quality. Pick two of those. We learned our lesson last year when we rushed out our billing and suspension upgrades (in around mid 2009 to stop us hemorrhaging costs from bad payers,fraudsters and abusers who had taken advantage of our informal and relaxed collections process) and many good and loyal customers got caught in the crossfire unfortunately. We eventually got it right and the systems are working much better now, people pay on time and have gotten used to it, and we get to stay in business, but we not going to rush anything anymore at the expense of customer operations. Stability and reliability cannot be sacrificed to in order innovate faster.
Afrihost can do R29/gb, why can't you match them?
For mainstream: The question is can they match us? Where are the complete offerings? This is what is going to count in future.
For power users: Afrihost have stated themselves it is a limited offer (according to Giaan the CEO, in numerous posts and on their own website). It is not sustainable. Even if they get it for cost, less 10%, you can't run an ISP on that GP. It doesn't exist anywhere in the world. These are the facts. Forum members are welcome to say "we dont care - blah blah". Fine and we hope you pick up some of our future specials at better rates.
Thus, let’s compare specials. We are doing 30GB for R199; so that's R6.66 per GB, which is more competitive by far. Now a fair criticism is that it’s far too exclusive (100 people). Look, it’s a significant amount of revenue we are simply giving away. But overall I agree with the assesment that we need to do more, we will. We are going to announce something "imminently" in that regard. Which will be in line with the expectations of the myBB community.
"But they took the marketing budget to make it work. Its ingenious"
Those in the industry know that that statement is a nice story, but one would have to be very naive to believe it. Simply not true when one does the calculations
Q: Why haven't you dropped pricing?
The fact is we are dropping prices and leading the way with the larger ISP's. We have across all our products seen an average decrease of 20% price drop. Our Complete range is now the most competitive around overall.
Look at the annual costs one might pay for a broadband connection. Even though the its apples vs oranges I still included a Telkom + 29gb combo for comparison sake though don't let that distract as anyone on 29GB packages generally are not the market for a Complete solution anyway.
R1 drop in prepaid. It's insulting!
The R69 price change was merely cosmetic and its not a price drop at all. The focus has moved. Prepaid is a model that only works in a data scarce environment. ISP's that cling to that, will not be around for long. The trouble with prepaid is the overselling potential is zero. We want to deprecate "prepaid only" accounts altogether down the line. Thus we focused on making our Complete range attractive. We envisioning 10GB to be the entry level not 1GB and then 20gb 30gb 50gb 100gb etc down the line for the Complete series.
You are buying support with specials
Absolutely. We are supporting you. Is this somehow meant to be a bad thing? We could have made a choice saying, forget myBB, they not worth it. But we didn't and we won't. We've spent weeks deliberating of some way to make it work so that we could continue to grow and still support myBB. And yes, goodwill is generated, just like with other R29/gb specials at the moment. Ours is better, but just more exclusive. However as I mentioned above, we need to do more and we something in the works already which will be in line with expectations of myBB.
Objective metrics
Let’s look at the numbers now. Customer signups are at biggest month in 5 months. Cancellation levels are within normal range. If we track support and promotion metrics; and overall our customers love us. Our most recent survey has 90% positive approval across our base. Obviously pricing is still the biggest gripe and we think our complete range addresses this very nicely for the mainstream market. Why do we do this? To make sure we kept sane.
Customers are really happy and thankful for upgrades. This is the feedback from sales. We are being proactive; and upgrading them to higher packages, at no additional cost, or cheaper. Who else is doing this?
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is this because they dislike the prepaid model as he hinted on? To me that sounds a bit like an excuse? Almost like they dont need the prepaid market? I donno i just get that feeling?
