Service pricing in a competitive environment requires both expertise in multiple methodologies and the experience and judgment to select the right method to price a particular service. JSI has expertise in traditional cost study methodologies, economic cost studies, and strategic pricing for competitive products.

For regulated services, JSI will ensure that you develop rates for new services that mesh with historic rate structures, support state PUC rate designs, and design strategies to maximize service penetration. Turning to competitive, or non-regulated, services, with JSI at your side, you can develop cost-based market prices and assess price competitiveness in your targeted markets. JSI will create break-even scenarios that allow cost-based sales forecasting and ensure that prices for competitive services meet applicable rules related to cross-subsidization or new services tests.

Reviewing rate rebalancing, JSI will design plans to adjust local and access rates, coordinating with state PUC mandates and Universal Service Fund actions. In addition, JSI studies potential conversion to usage-sensitive pricing or local measured service (LMS), investigates conversion of flat-rate EAS to usage-sensitive pricing, and performs required regulatory actions, including tariffs, and reviews and develops alternative regulatory mechanisms. Finally, we can assess the economic benefits of becoming a toll provider, assist with implementation, and develop unique pricing approaches, such as: service bundling; pricing plans targeted to individual users, including block plans and pick-a-route; usage-sensitive pricing; mixed flat-rate/usage-sensitive pricing; mileage bands; and, optional calling plans.

Service bundling is one of the most effective tactics independent providers can employ to increase margins and meet competition. Bundles allow you to draw attention to additional services that customers might not be aware of and to reinforce your position as a one-stop-shop. The more services customers purchase from a particular provider, the more dependent they become on that company, and the convenience of a single provider makes them less likely to switch any of those services. Launching a service bundle enables you to take the lead in educating customers about the benefits of your services and to highlight the service quality, customer care, and personal touch you as a local provider offer. While subscribers purchase bundles to save money, it is ironic that providers offering bundles often find that customers spend more than they would otherwise and, just as importantly, are less likely to switch service providers.

To bundle services successfully, companies need to create and continuously refine their packages to ensure they are meeting their business objectives. Branding a new product or bundle boasts significant advantages over simply rolling out just another service. Creating a brand allows you to give customers something tangible with which to associate service attributes and benefits. In addition, branding helps to further strengthen your company image as well. 

There are two distinct activities in creating service bundles: service definition, which includes market and price analysis, and promotion. Service definition specifies what you are trying to sell, whom you are trying to sell to and whom you are selling against, as well as pricing. To manage this process effectively, providers need to be keenly aware of their market opportunity and service-related costs. The market opportunity is described in terms of current market share, total addressable market, and competition. Pricing is predicated on understanding individual service-related costs. Price analysis quantifies margins for each service and shows how margins are driven by the number of customers.

When you have defined the margins, priced the individual services, and put your discount structure in place, you can create service bundles that meet your business objective(s), among which may include: protecting your regulated settlement revenues; encouraging subscribers to purchase video and/or wireless services by bundling and discounting voice and high-speed Internet services; and, increasing your ARPU by encouraging customers to purchase higher speed Internet services or use more toll MOU.

Finally, bundling promotion consists of creating and promoting a service bundle, measuring the success of the promotion, making the necessary adjustments to the service bundle, and promoting it again. Bundle promotion is the necessary alter ego of business analysis and service pricing, and consists of all of the steps required to market and sell telecom services; e.g., identifying target markets, designing and planning effective advertising and promotional strategies; developing marketing materials; training company CSRs, and other personnel, etc.  

To learn more about our service pricing methodologies and bundling strategies, or for additional information, contact Douglas Meredith (dmeredith@jsitel.com) at 801-294-4576, or Chuck Richoz (crichoz@jsitel.com) at 301-459-7590.