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Is it possible to get a rational pricing plan for data?
mgilberg
Member

Apply the Verizon data pricing plan to gasoline.

You must decide in advance how much gasoline you need next month.  Gasoline is available for $3/gallon, but you must pre-order in 10 gallon increments.  If you think you might need 26 gallons, you must pre-order 30.  If you use only 22 gallons, you still must pay for the 30 you ordered.  The additional 8 gallons you purchased are lost.  If you find out that you needed 31 gallons, the extra gallon you did not pre-order costs $4 instead of $3.  But you can't buy just the one extra gallon at $4, you have to buy the 10 gallon increment at $4.  You therefore paid $40 for the last one gallon of gas.

Can you think of any other product or service you would purchase using this completely irrational pricing plan?

How about something that lets the consumer manage the data cost by managing the usage?  For example...

Basic service includes 2GB.  After the first 2GB, there is a charge of $5/GB.  If you use an additional 0.2GB, you get billed an additional $1 on a pro-rated per GB price.  You may want to offer a quantity discount.  $5/GB up to 10GB, then $4/GB after that.  Or, you may want to charge a premium for super-users to limit data hogs.  $4/GB from 10GB to 20GB, then $8/GB above 20GB.  But the key feature of this plan is:  SET A PRICE AND CHARGE FOR USAGE!

Do not create some sort of mysterious guessing game that always results in Verizon charging the most surprising highest possible cost while giving the customer the least amount of control over the bill.

Yes, I understand Verizon needs to make a profit, but please do it in an honest and straightforward way rather than bamboozling the customers.  Why not?

Re: Is it possible to get a rational pricing plan for data?
flutterfly8497
Sr. Member

If you switch to prepaid service, you pay only for what you use.  I don't think there is any way around the plan structure, as most carriers use the same model with the exception of prepaid service.  To apply your analogy, it's like if you go to the gas station, and must pay before pumping.  You pay for 10 gallons, and when you have gotten that amount, the pump shuts off.  You can get more if you need it, but you pay for it as you go then.

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Re: Is it possible to get a rational pricing plan for data?
mgilberg
Member

flutterfly...

I *wish* your gas station analogy were correct.  You say that you prepay for 10 gallons, then you get 10 gallons.  That's not how it works.  In Verizon land, you prepay for 10 gallons and then you get UP TO 10 gallons.  It is considerably different.  However, I think I will investigate the pay-as-you go plans.

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Re: Is it possible to get a rational pricing plan for data?
flutterfly8497
Sr. Member

mgilberg wrote:

flutterfly...

I *wish* your gas station analogy were correct.  You say that you prepay for 10 gallons, then you get 10 gallons.  That's not how it works.  In Verizon land, you prepay for 10 gallons and then you get UP TO 10 gallons.  It is considerably different.  However, I think I will investigate the pay-as-you go plans.

My analogy is correct within the context of my point.  I was applying it to the prepaid structure.  You pay, then you use it.  You buy 10 minutes, you can use 10 minutes. Using the same analogy in reference to paying for gas isn't "correct" either.  No, the "post pay" is not custom tailored to every customer, but then buying cell service is not the same as buying gas, is it? You can't buy 10 minutes with Verizon, then buy 10 minutes with AT&T because you are visiting family and AT&T has the best coverage there, then stop on the way home and grab 10 minutes from T-Mobile.

Analogies about completely different products cannot, by their very nature, be 100% correct.  I have unlimited texting and minutes for my three lines, but exactly when will I use that?  I won't.  It is impossible to use "unlimited" anything.  However, I pay for it because I prefer the peace of mind knowing if my 13 year old blows up his friends' phones with 20,000 messages or some ridiculous number like that, it doesn't matter.  If the service is not worth it to you, and you want to set your own structure based on your use, go prepaid.

Re: Is it possible to get a rational pricing plan for data?
mgilberg
Member

flutterfly...

I checked out the prepaid plans.  The pricing structure was considerably more rational, but the data speed is limited to 3G.

So, Verizon, how about this:  Keep the onerous 2GB jumps (which require you to buy a whole new 2GB block even if you can only use 1MB by the end of your billing cycle), but automatically bill at the best rate.  If your customer uses 5.3 GB, charge the 6GB rate.  Do not make her guess 10GB in advance and then lose it, or guess 4GB in advance and pay an overage.

What would be so difficult about that?

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Re: Is it possible to get a rational pricing plan for data?
rcschnoor
Sr. Leader
Sr. Leader

I see a few inconsistencies in your statement. It seems that you are not against having to pay for an incremental amount of data, just that the increments are too high. And of course the price per increment is too high.

mgilberg wrote:

Can you think of any other product or service you would purchase using this completely irrational pricing plan?

Yes, water. I pay a set amount for water to my home for the 1st 30,000 gallons. It doesn't matter how much I use less than 30,000 gallons, I pay the same amount. For the next 10,000 gallons, I pay another set amount. So there is an example.

Verizon HAS set a price and they DO charge for usage. You are simply not happy with the price or the increments. Since first instituting Share Everything, Verizon HAS modified the pricing structure according to public demand/industry patterns. I am sure if the pricing Verizon currently has does not go over well with its customers and they instead start leaving, the pricing structure will change yet again.

mgilberg wrote:

So, Verizon, how about this:  Keep the onerous 2GB jumps (which require you to buy a whole new 2GB block even if you can only use 1MB by the end of your billing cycle), but automatically bill at the best rate.  If your customer uses 5.3 GB, charge the 6GB rate.  Do not make her guess 10GB in advance and then lose it, or guess 4GB in advance and pay an overage.

Verizon DOES NOT "make her guess 10 GB in advance". A user can choose the 4 GB rate. If they notice their usage getting close to or exceeding 4 GB during the billing cycle, they can increase their allowance up to 6 GB for another $10. They DO NOT have to choose 6 GB in advance, they can choose it at any point during their billing cycle. I have done it before, I am sure there is a possibility I will do it in the future.

Re: Is it possible to get a rational pricing plan for data?
flutterfly8497
Sr. Member

mgilberg wrote:

flutterfly...

I checked out the prepaid plans.  The pricing structure was considerably more rational, but the data speed is limited to 3G.

So, Verizon, how about this:  Keep the onerous 2GB jumps (which require you to buy a whole new 2GB block even if you can only use 1MB by the end of your billing cycle), but automatically bill at the best rate.  If your customer uses 5.3 GB, charge the 6GB rate.  Do not make her guess 10GB in advance and then lose it, or guess 4GB in advance and pay an overage.

What would be so difficult about that?

Yes, prepaid is limited to 3G.  If you want the cheaper pricing with no contractual obligation, you sacrifice data speed.  If you want the best quality, from any company with any product, you are going to pay more to get it.   Also, the More Everything plans do offer data in smaller increments, if you are not using 2 GB of data.  Do the research and then make a decision.  Verizon is not likely to change their pricing structure to what you are suggesting, and if they did I would imagine a lot of angry customers.  Personally I like having the terms of my service and the pricing structure set so I know exactly what to expect.

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Re: Is it possible to get a rational pricing plan for data?
mgilberg
Member

Flutterfly...

I really appreciate that you are taking time to discuss this with me, but after your last reply I wonder if we are talking about the same thing at all.  You said "Personally I like having the terms of my service and the pricing structure set so I know exactly what to expect."  That is exactly what is NOT happening.  The pricing structure is set so that you have no idea what to expect.

Indulge me as I go through a scenario.

You sign up for 4GB of data, Verizon pre-bills you $70.  As you go through the month, you realize you are using 14GB.  Under ideal circumstances, you can up your data plan to 14GB before the billing cycle ends.  (I'll discuss less-than-ideal a little later.)  The 14GB rate is $120, so your next data bill is $170.  That is $50 in arrears plus $120 for the next month at the 14GB rate.  As you approach the end of the billing cycle, you find that your usage is under 2GB, so before the end of the cycle you drop your plan to the 2GB rate, which should be $50.  But you have already prepaid $120.  That makes your next bill zero, with a $70 credit balance.  The bill fluctuates with usage, but the swings are wildly volatile compared to the usage.  The quoted pricing for usage would expect the bills to range from $50 to $120, but the actual billing varies from $0 to $170.

Now, let's talk about less-than-ideal.  The data usage information available to you is an estimate.  Suppose your actual usage in the first month is 14.2GB, but the estimated value provided by Verizon was only 13.8GB.  Then you underestimate your plan and pay a premium penalty for the last 0.2GB when the bill comes for 16GB of usage.  Or suppose you forget to up your plan at the last minute.  Or, in the following month, suppose you forget to reduce your plan.

All I'm asking is for Verizon to bill AS IF you have made the best data plan decision when the actual usage is known.  In the first case, AUTOMATICALLY bill as if your plan called for 14GB instead of billing as if your plan called for 4GB.  Or in the 14.2GB case, automatically bill as if your plan called for 16GB.  If you're lucky, and you always guess right, and you're always on top of your usage, then you can get the best available rate.  But if you make a mistake in guessing, Verizon penalizes you.  This is NOT a fee for service, it's a scam.

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Re: Is it possible to get a rational pricing plan for data?
rcschnoor
Sr. Leader
Sr. Leader

Yes, it places the responsibility of determining your data allowance on the person actually using the data.

It does not take much to monitor your data usage.

Obviously for someone who has such wild data usage swings, it would be more beneficial to monitor data usage more closely. That being said, you can check on your data usage simply by clicking on the widget provided by Verizon which takes ~2-3 seconds. Doing that 10 times a day takes a total of about 15 minutes in a month. Do you need to check it that much. NO. But you can.

For those months which you underestimate by those 0.2 GB, it is going to cost you a whopping $5.

There is no need to have to be pre-billed that charge for a higher data allowance. Simply log into your MyVerizon a day or two before you billing cycle closes and reset your allowance to a more reasonable amount to take effect on your billing date.

This IS a fee for service, it IS NOT a scam, but Verizon is NOT going to spoon feed you. You obviously have to take the responsibility on yourself.

Personally, I check my data usage about a week or so before my billing date. ONCE in the past 18 months, I had to make an adjustment. Takes about a minute and a half to do so. I agree with flutterfly8497, I know exactly what to expect.

Re: Is it possible to get a rational pricing plan for data?
mgilberg
Member

rcschnoor...

You've missed my point.  I didn't say that it takes a long time to check your data usage.  I said that the pricing scheme is a scam.  The best you can do is come out even compared to the quoted rates.  One false step and you lose, paying far above the quoted rates.

According to industry statistics, Verizon has 122 million subscribers.  If only 10% of subscribers pay the "whopping" $5 each month, Verizon has scammed their customers out of over $730 million a year.  I suspect that the number of people who DON'T watch their accounts that closely and/or do not understand how the billing works exceeds 10% (although I admit that is unsubstantiated conjecture).

You say "You obviously have to take the responsibility on yourself," which is true.  But the reason that is necessary is because Verizon's pricing scheme is a scam.  If they priced honestly then there would be no need to play games.

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