Some of our customers are probably wondering what our “new position” is on things since we “passed the baton” so to speak. So let’s look over something that was written by Curtis when he was Managing Director and my views on it:
“The reliance on promotions to generate new leads is not congruent with the type of business that we are attempting to build. Don’t get me wrong – I am not suggesting that the use of giveaways and “90% off if you buy within the next two days!” promotions don’t get bums on seats – admittedly, if we were building a business to sell then we would have spent the predominance of our budget on advertising and ridiculous “prizes” rather than network infrastructure and ongoing operational-expenditure support.”
Curtis had a very strong view on this, and I do too. We need to have a purpose for running any promotion or giveaway, its primary function must be one that is beneficial to the business and not one made simply to “pump up the numbers”. Chombo is in a position that it does not require growth at extreme rates, but recently as most people are aware I made the decision to cut the price of our entry level $9.95 plan to just $3.95, as an ongoing price to the next 500 signups. Immediately, this made our competitors speculate on why we were doing it, and what purpose it served. Well, despite some of the more colourful ideas of why, we did indeed have a valid and reasonable business case for doing so. Chombo’s strength is undoubtedly its customer service and free value-adds in terms of the amount of inclusions. Lately, this has been expanded to include 8.30am to 5.30pm Monday-Friday Telephone Support, at no charge (some providers choose to charge an additional fee for this kind of thing).
The problem with this model is that it’s inevitably going to cause a higher entry price as it has higher running costs. That’s no secret. What I decided to do is show people who aren’t with Chombo what they’re missing out on by not being with us, and offer them a price level that they could sign up without feeling they were paying more than the most budget of providers sells for, despite the additional services we offer. So we did just that, we cut a whopping 60% off our plan price, and launched our free telephone support. This will get people on board so we can prove to them exactly what it is that we do better than the rest, and why it’s not always the best option to sign up just based on price, yet many people still do. Inevitably, our prices will go back up by some amount at some stage (except to the 500 people who take advantage of this promotion, it’s an ongoing price for their accounts), but people should start to realise exactly what they’re getting for that extra few bucks a month – a lot more than a few bucks worth!
“Maybe we’re doing it wrong. I’d like to know your thoughts.”
I’ll echo this, tell us what you think in the comments or email michael@chombo.com.au – I’m very interested in what people think of the way we do business.
Michael