Tuesday, 12 September 2017

Quota Bonus

I have had an idea of a tweak to the way we do quotas that should help address some of the concerns people have.

Quotas are always tricky things - having some sort of roll over is more complex, and usually needs some sort of caps. We did this on the old units based system and it resulted in quite complex statements of usage and quota and roll over.

What we have now for Home::1 and SoHo::1 is quite simple - it is a monthly quota. You start each month with that quota. Simples!

Even so, there are complications, such as pre-using some of next month's quota (slowly) if you use all of this month's, and the top-up, which I have now made carry on until used. Even so, the "unused quota" that is "lost" at the end of each month is clearly a concern for some.

Quota Bonus

The proposal is relatively simple. You will start your month with your monthly quota as now, but as a bonus you will also get half of the "unused" quota from the previous month.

So if you started on 300G monthly quota but only used 200G in your first month, you start the next month with a new 300G, plus 50G bonus (half of 100G unused), making 350G.

If you only use 200G that month you will start the following month with your 300G monthly quota plus 75G bonus (half of the 150G unused), making 375G.

And so on. Any top-up remains separate and is not halved.

The nice thing is the system is self limiting in time and amount by the nature of geometric progression. It does not need any caps or time limits. It also makes it simple when you change your monthly quota and no change in caps - the same simple rule applies.

This should reduce some of the perceived "loss" of unused quota, and allow some balancing out of high and low months.

Obviously we need to make it clear on the control pages how your monthly quota was created, i.e. your monthly quota, and any bonus you have (and if you have any top-up carrying on), each month.

Comments

I am interested in comments on this specific idea. Is it easy enough to understand? Does it help address some of the concerns?

Background

Our costs depend on a lot of factors, like many services. We haves some fixed cost, some costs directly related to number of lines and types of lines, some costs related to usage of the service and the overall scale of our operation. Whilst a simple usage metric of "Gigabytes downloaded" does not relate directly to our costs, it is not a bad analogy.

So we could charge simply a monthly fee and a usage fee for what you used. Several people suggested we do this. Indeed, we do this for our mobile services, and get many calls for us to offer "call packages". At the other extreme we could do one "package", even an "unlimited*" one. But we have chosen a middle road, so that light users pay less than heavy users, but people can pick a package which means predictable charges.

This means quotas in tiers, and obviously some people will have some "unused" quota. When we start getting to the terabyte usage levels this will normally be quite a lot as these are meant to reflect a near "unlimited" usage level for most users. People feel they are losing something in such cases, and may even try and "use up" their quota at the end of the month. Others feel their usage being very variable they have some months high and some low, and that we should somehow balance usage. For lower tariffs, we allow change of quota every month.

No system will be 100% fair to everyone, and no system can meet everyone's requirements exactly. But we hope this addresses some of the issues.

This is not launched yet, I am just asking for comments at this stage.


P.S. yes, applicable to the terabyte quotas, and I am increasingly inclined to launch this now.

52 comments:

  1. I'd support this. Not on the grounds of unsure loss, but for the reassurance of a significant reserve. It would just feel safer?

    ReplyDelete
  2. I support this idea. I believe the following wording is clearer and hopefully simple to understand:

    "You pay a set fee per month for a set quota. At the end of the month any unused quota is halved and rolled over, and added to the next month's quota for free. This halving and rolling over unused quota continues indefinitely"

    ReplyDelete
  3. I really like this idea. When can we have it 😁

    ReplyDelete
  4. This would certainly help the "school holiday" problem, allowing me to chose an allowance based on average rather than peak.

    ReplyDelete
  5. I like this idea - offers a level of predictability, and copes with the peaks and troughs of usage quite nicely.

    ReplyDelete
  6. This seems like an excellent idea. The mathematician in me likes the fact that this is a textbook implementation of an Infinite Impulse Response filter, too.

    ReplyDelete
  7. This would be really helpful for our households viewing pattern, which tends to be a binge watch on Netflix now and again. Thus offsetting peaks against a proportion of troughs makes a great value offer.

    ReplyDelete
  8. I like the idea, but I didn't have any problem with the recently changes.

    I wonder how well it will address the concerns about quota loss. When you use words like "quota", "top-up" etc, you set peoples mental model to think of it as a resources they are buying and then not able to use.

    It is probably too late to change, but I wonder if you'd get the same complaints (and the same potential for 'abuse') if it was instead framed as a capability, e.g., 'usage limits' and 'temporary increases'?

    ReplyDelete
  9. Brilliant idea. It is simple to understand and (presumably) implement, and it gives people a motivation not to deliberately waste their unused quota just to "get their money's worth", without making carried-over quota so valuable that nobody wants to download anything and you end up with people stockpiling dozens of terabytes just in case.

    ReplyDelete
  10. Well I have no issues with the current system so I am perhaps not your target audience.

    But it sounds like a clean and elegant solution.

    It will reduce your revenue per customer through reduced topup sales and possibly even a few downgrades (though I expect it's a fairly small effect) but if you also attract new customers because of it you could easily come out ahead.

    ReplyDelete
  11. Seems fair to me. My usage has been quite lumpy due to varying torrent traffic and this would have absorbed some of it due to halved roll over from the previous month.

    ReplyDelete
  12. Along with erveryone else who has replied I think it's a good idea; simple and elegant.

    ReplyDelete
  13. It wont affect me as im on the TB plan and dont use half of the allowance even on a heavy month, but I think its a great idea.

    ReplyDelete
  14. I think it is an excellent idea, it should also help to reduce the incentive to waste quota

    ReplyDelete
    Replies
    1. Apart from the fact people will have more quota to waste as time goes on - after all. If they are only going to store it "incase it's needed" they can go unlimited for 50% less and still be quids in.

      AND allowed to waste what they like!

      Delete
    2. Not sure I quite follow. As I say, it is self capping - most you can get is twice your quota, if you use nothing for many months.

      Delete
    3. Which no one is going to pay £60 a month - and use nothing.

      Delete
    4. Well, we start at £25/month plus you need a phone line... But yes, it would be odd to use none of it. Some people have them for backup though, so it does happen, albeit rarely!

      Delete
    5. Given that in (fairly) recent months the 'entry level' offering has grown from 100GB to 200GB, is there room for a new entry level for a couple of quid less? Don't get me wrong, I think even at £25 it's excellent value, but I'm also aware that even before this (possible) change, I'm rarely half-way through my quota...

      Delete
    6. Sadly the changes to the way we pay for several services mean that is not very likely, sorry. It is moving to more of a higher price for every line and lower costs for usage... Sorry.

      Delete
    7. No worries; I thought it might be something like that, and as I said it's worth every penny to me as is.

      Clearly I just need to download more so as not to waste my quota :)

      Delete
  15. Think this is a very good idea, and seems perfectly clear to me. The recent changes and particularly the way you have been consulting your customers are to be applauded. Thank you.

    ReplyDelete
  16. Thanks for considering this, yes it's very easy to understand and yes it addresses those situations where people always purchase quota which more than covers their typical usage but now and again they have a busier month. Combined with non-expiring topups it's much fairer and simpler to manage, less second-guessing oneself. Thankyou, and thanks also for taking the topups feedback and improving them so quickly. Greatly appreciated.

    ReplyDelete
  17. I like this. I'm sometimes not around the whole month, and sometimes I have heavy Netflix users staying. So my usage fluctuates. I occasionally top up too. This solution would smooth out the peaks and troughs.

    ReplyDelete
  18. So, if I start the month with a 1 TB allowance and don't use any then the following month I will have 1.5 TB. Again, I used none, and the next month I will have 1.75 TB, then 1.875 TB etc.

    This looks suspiciously like it's tending asymptotically to 2 TB. Somehow it would be mathematically more satisfying if it tended to e (2.7182818284590452353602874) TB.

    Any chance?

    ReplyDelete
    Replies
    1. But the 'bonus' doesn't count for the following month, so if you don't use any data the maximum you could have is an allowance of 1.5TB (500GB bonus as 50% of the unused 1TB).

      Delete
    2. My example shows clearly that the bonus counts the following month which would tend to 2 x quota of no quota was used each month.

      Delete
  19. This would be a superb change, and I think it's simple to understand. It's self limiting, but avoids the fear of "wasting" quota.

    ReplyDelete
  20. Somewhat perversely - and this was almost certainly not your intention - this may make me review each of my lines and my clients' lines and look at whether any/some/all can be downgraded to a lower monthly quota.

    ReplyDelete
  21. Super, helps smooth out peaks in usage (Steam updates, perhaps), easy to understand. Like it lots.

    ReplyDelete
  22. This sounds like a good proposal. I - like a lot of people - have peaks and troughs in usage depending on whether my son is home from uni!

    ReplyDelete
  23. When I was an A&A ADSL customer (I've had to stop through no fault of A&A and ideally would still be a customer) I occasionally got a bit annoyed because I'd be well under my quota most months. Like out of 20 months I'd have 15 at 30%-50% and 3 at 50-75%. But then I'd go over one month and have to fork out more money for wanting 125% just one month.

    I understood why so didn't really get too upset. But still felt a bit wrong.

    I didn't then download lots of "extra" stuff at the end of the month to make sure I used my quota, *however* after being charged extra once or twice I DID start to think at the end of each month, "how much quota have I got left and is there anything big I MIGHT want next month that I can grab now". Thinking ahead, rather than revenge, even though half the time the downloads went unused.

    So I ended up using much more of my quota than I might otherwise have done so.

    Being able to build up a bit of a buffer in advance this way would have suited me :)

    ReplyDelete
  24. Seems un necessary to me, but if is not costing you to do then I suppose it might be useful to others. Is you bandwidth cost truly a 'variable' cost or do you have a commit level which is just enough for a average month. For example does this open you to extra costs in a month where usage is unusually high (e.g January say) where you have to pay 95%ile overage to your backhaul suppliers but aren't getting paid extra by your customers because they have rolled over usage?

    ReplyDelete
    Replies
    1. The actual costs relating to bandwidth are ridiculously complex, sorry. And they are changing, partly because of changes (increases) in usage and partly down to periodic negotiations with carriers. The usage in "gigabytes downloaded" has always been something of an analogue for the costs, but not an exact match. It is the closest we have to reflect the fact heavy users cost us more. I hope that makes some sense. This change won't help people that regularly buy popup or run they quota to the limit, but for those using the service more moderately they will build top a reserve to help with peaks in usage. Occasional peaks in usage are exactly the sort of thing that balances out and does not cost us so much.

      Delete
    2. It does not let me edit the typos after posting - I hope that makes sense - ask if not.

      Delete
  25. Probably the hardest part is explaining this to the user, and working out how to display it clearly.
    Users have a fixed quota every month, and in addition a "Brucie Bonus" which is an accumulation of half the unused quota from every previous month. These figures are added together to give an allowance for the month - because calling too many things the "quota" for the month would get confusing.

    So I think you have to display the current month's fixed quota, plus the accumulated bonus from the previous months. And at the start of each month send each user a (complicated?) email explaining how this month's bonus was calculated.

    Presumably in a given month you start off eating through your fixed quota for that month *before* eating through your accumulated Brucie Bonus ? Otherwise the bonus could grow quite quickly.

    Mind you, as a light user I'd probably prefer a PAYG
    model - what am I going to do with a bonus pot of ~1TB after 12 months ?

    ReplyDelete
    Replies
    1. The bonus quota is no different to normal quota in the month, any "unused" at the end of the month is halved and added to next month. Only the top-up is separate. being half each time it is self limiting.

      Delete
  26. Aha, just written a little simulation, and I see how it self-limits :-)

    ReplyDelete
    Replies
    1. I'm glad I wasn't the only one to have tried this... :)

      Delete
  27. In accordance with ASA advertising rules will you now be advertising the 200GB option as "up to 400GB"? ;P

    ReplyDelete
    Replies
    1. LOL! Why not stretch to 200+200 bonus, used on day one and then 200 done at "slow" speed from next month's. i.e. "Up to 600"? :-)

      Delete
    2. By their rules I think it's all 'up to 2Tb', after all that's the level you can't exceed if you just keep on sucking at top speed all the time. Sure, it gets slow, and it's going to cost a lot for all the topups... :)

      Delete
  28. Just had an idea. When someone runs out of quota they have the option of going slow, using from next month's quota. How about another option of going at normal speed, using from next month's quota at a rate of 1GB now uses 2GB from next month? Kind of the same balancing idea in reverse. Someone can choose to 'pay' for a bit extra this month by forfeiting double that from next month.

    ReplyDelete
  29. This is great, I moved to Zen a while ago because I needed more data now and then (without paying £10+ more a month), but I'm more likely to move back now.

    ReplyDelete
  30. As with range anxiety in cars, people don't like the uncertainty of a quota system.

    That's really hard information to work with, because I know you can't offer Unlimited because of the high risk of abuse from a service like that from a really good but small ISP. Still, it should inform your thinking, maybe try imagining a hypothetical customer who is anxious about this in figuring out new products or marketing. What does she think of a new service? Can it be explained or designed in a way she'll be reassured by?

    ReplyDelete
  31. I do like the idea. Bank a bit of unused quota from Oct and Nov to see us through Dec and Jan when the Man-Child is home from Uni. But, it will be very hard to explain as you need infinite history to show how the current quota was determined.

    Really think the end-game is for the quota to be used up more slowly off-peak. This is the only way you can satisfy both the daytime 'professional' use and the night time 'entertainment' use with a single product.

    Personally I feel that without some sort of off-peak concession I will end up moving to Zen so that I can forget all about quota anxiety.

    The only thing I'd potentially lose would be 3G failover but your tech support have so far been unable to make that work properly with my Draytek so at this point actually nothing to lose...

    ReplyDelete
  32. Great to see that you have now implemented this proposal in time for the roll-over to 1 October - Thank you.

    ReplyDelete
  33. Just checked my quota and noticed it was above 1tb - so checked in the control pages and noticed the Quota Bonus added. I havent read your blog for a little while so just found this post.

    I think this is a very good idea and very fair! Thank you.

    ReplyDelete