The challenge: Moving customers from all you can eat plans to tiered pricing

By Guy Hilton, Director Product Marketing

As data services become more common and are being used by a growing number of subscribers we see an increasing number of service providers moving away from all you can eat (unlimited) plans to offer tiered pricing plans. So essentially instead of having a $30 all you can eat data plan, subscribers will need to choose the right amount of data they want to use and that will come with a price tag. If they’re using a lot of wireless data they will pay accordingly.

The idea does have merit as it would make sense for heavy data users to pay more than the average data consumer. The notion of one price for all creates a situation where most of the network resources are being consumed by a small percentage of users and yet everyone pays the same although the resources are not shared equally.

But moving from an unlimited all you can eat plan to tiered pricing plans is not a simple process. Other than the technical aspects which involve a tight integration between charging and policy control, there’s a somewhat disregarded aspect of a customer experience.

When seeking to introduce a new business monetization models, service providers must not forget to take their subscribers along for the journey. It’s not just about convincing subscribers to let go of their simple-to-understand, all-inclusive data plans. Instead, it’s about making sure they don’t drop out in the process of migrating, and that they have a consistently satisfying customer experience throughout.

For subscribers used to unlimited plans, the perceived value is less about what they do or don’t do with the bandwidth they receive at a fixed price, and more about not having to worry about crossing invisible quota lines – and then being charged extra.

To get them off the unlimited mindset, service providers must devise easy-to-understand pricing schemes and implement better visibility and control mechanisms to enable those subscribers to be aware of their data usage, how much they’re spending and advise them in real-time when they are about to reach the boundaries of the  data plan they have opted for.

Implementing these mechanisms will facilitate a smoother transition from unlimited to tiered pricing plans and improve customer experience aspects when offering these plans. It could also be harnessed for some creating marketing promotions as it enables service providers to communicate in real-time with their postpaid customers.

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