Forecasting & Pricing: Typical Engagements
Pricing Structure and Demand Estimation: Wireless Telephone Service
A wireless telephone service provider was interested in repositioning one of its plans by developing a new pricing structure with broader market appeal. The client needed to evaluate several proposed pricing structures in terms of churn and switch rates. The study also took into account potential cannibalization of its existing plans in order to identify the plan, which would maximize overall revenue.
ConStat conducted online interviews with both current and potential customers in order to evaluate differences between customer groups. Percentages were weighted to reflect the actual proportions of client customer groups as well as the actual proportion of customers vs. non-customers in the marketplace.
Results were used to help the client identify the plan with the highest market appeal and purchase intent, while minimizing cannibalization of its existing pricing plans.
Pricing Structure and Demand Forecasting: DSL for Remote LAN Access and High Speed Internet Access
A major telecommunications company intended to launch DSL technology and make it available to its business customers. Prior to the launch, however, our client wished to refine the configuration of the product in terms of its speed and pricing for two applications it saw as most appropriate for DSL: remote LAN access applications among its larger business customers and high-speed Internet access applications among its smaller business customers.
In order to address the issues posed by our client, ConStat employed a full-profile conjoint analysis that enabled us to replicate the assumed purchasing scenario among larger Fortune 1000 companies as well as small businesses. Respondents were presented with specific product offerings in terms of speed (both upstream and downstream), price and voice availability (with or without). The study design also took into consideration the products companies were currently using for their remote LAN and high speed Internet access applications, and determined which products businesses would drop and retain when selecting a particular configuration of DSL. This provided key insights into cannibalization of other products and services.
Research results identified the optimal configuration of the client's DSL product that would maximize revenue among small and enterprise-level businesses by maximizing sales of the DSL product and minimizing cannibalization of our client's other products and services. Based on the results of the research, our client was able to configure their offerings in a manner that enabled them to target each of these important business customer segments most effectively.
Pricing Structure and Demand Forecasting: Long-Distance Service Pricing
A leading provider of voice, data, and Internet services was to begin offering long-distance service to its residential wireline customers in select regions of the U.S. Prior to introducing the service, our client needed to estimate residential customer take-rates and sensitivities to a variety of possible long-distance pricing plans they were considering. The information was to be used to help our client develop a pricing strategy to optimize revenues and penetration when they introduced the long-distance service.
ConStat proposed and conducted a two-phased research program. The first phase consisted of qualitative research to better understand customers' attitudes towards and understanding of long-distance services and the terminology used to describe it. Six focus groups were conducted with residential customers with a mix of local toll, in-state long-distance and state-to-state long-distance calling patterns and spending levels. This was followed by a quantitative phase involving a choice model exercise designed to identify the optimum pricing structure for long-distance services. This phase entailed a total of 1,500 interviews that were conducted using a phone-mail-phone methodology in which respondents were recruited by telephone, sent a package via mail containing the test stimulus materials, and interviewed via a follow up telephone call.
The initial phase of research was used to inform the quantitative phase including the appropriate attributes and variations to evaluate in the choice model exercise. Results from the quantitative phase provided the client with data necessary to establish an optimum pricing structure for its long-distance services to be introduced to select customers in the U.S.