A lesson in how not to float a new business model to consumers (brought to you by the broadband industry)
- Posted by Ephraim Cohen on March 2nd, 2006 filed in Corporate Communications, General, Messaging, PR Strategy, Public Relations, Research
An article in the Wall Street Journal today reports on how consumer broadband providers may introduce a tiered pricing system for consumer broadband connection is a good lesson in how not to introduce a new business and pricing model. The article, and several like it before, make it sounds like providers are penalizing consumers instead of showing how the model can actually benefit consuemrs. Essentially, the providers want to bill consumers for bandwidth they use - use a little, pay a little; use a lot, pay a lot. It’s not much different than electricity, water, groceries, gas and other resources where use varies from household to household.
Tom Evslin, who introduced flat rate dial-up pricing while heading up AT&T Worldnet, would compare bandwidth to electricity and say it should simply be a utility everyone has access to, where people pay for what they use. He had a simple, attractive message that people listened to. Too bad he left.Â
That said, here are some thoughts on messaging for this billing model that can apply to other industries as well.
Make it about protecting the consumer, not the profit - the message should focus on how if the industry has a flat fee it must charge a high flat fee to the many to compensate for the heavy usage by the few. The only way to lower it is to lower the bandwidth for everyone (which is why those $20/month DSL deals are far slower than my $45/month multi-megabyte cable connection).Â
Show it as democratic - This way people pay for what they use and are not penalized for what others use. So instead of dictatorial bills (you will pay this no matter what) you get representative bills (your only paying for what you used).
Show consumer friendly examples - Why not give an example of a consumer that, with today’s model, pays $45 a month mainly for superfast Web surfing and would see their bill drop to under $20 with the new model.
When the model is presented incorrectly, make it clear the presentation was wrong - Too often articles like the Wall Street Journal make companies act defensively instead of simply saying it was wrong.Â
Repeat. Repeat. Repeat. Repeat. Repeat. Repeat. And don’t change the message along the way. You want people to remember something? Say it a thousand times. Why do you think political campaigns can be so effective? They rely on simple, consumer friendly messaging repeated ad nauseum.Â
Of course, the service providers may well already have a similar messaging strategy. Quite often I see a solid message platform destroyed by executives who refuse to listen and learn how to improve their delivery - i.e., participate in *regular* media training. To them I say the usual: “Presidents of the United States undergo regular training. Are you that much better than they are?” Â
March 2nd, 2006 at 6:52 pm
Thanks for the article. A lot of good information and advice. I look forward to your future work.
March 2nd, 2006 at 7:53 pm
When you say, “Make it about protecting the consumer, not the profit,” it sounds a lot like what Richard Edelman said in his 2/17/06 post: “Why not change the face of those demanding change, from the real estate developers to the recently graduated nurse?” (True Power Lies in Being Flat as a Pancake)
He’s talking about opening up preservation property to developers in San Francisco. You’re talking about opening up broadband pricing. Different context but still a great strategy. An Edelman alumnus no less.
March 2nd, 2006 at 8:47 pm
Great catch, Randy. I had read Richard’s post so obviously that (and 7 years of working at Edelman and with Richard on a few accounts) was rolling around in my subconscious.
One thing I did learn there was that the best public relations came from a company doing well both for itself and for it’s audiences (customers, investors, other publics affected by it’s actions). This was not easy to implement as many companies saw PR as mascara for a half-baked product, flawed business model, or anti-customer policy.
In the case of broadband providers, the face can easily be that of the consumer. Perhaps my folks demanding a lower fee since they just Web surf and e-mail, while suggesting the companies jack up my bill as they know I’m alwas downloading and uploading big family video files.