Skyrove Pricing Recommendations

I’d like to share with you ways in which you can maximise your Hotspot earnings, while at the same time offering a highly competitive service to Skyrovers.

One of the things we’ve learnt in the last few months is that the most expensive hotspots do not make the most money.

For example, we have 2 hotspots that both cater exclusively for American Exchange students.

Here’s a brief comparison:
Hotspot A Hotspot B
12 users 18 users
~$1005 per month $734 per month
Average user time online: 46 minutes Average user time online: 23 minutes

Although Hotspot A is 4 times cheaper, its earnings are almost 50% higher! Hotspot A is also much more likely to retain customers in the face of ever-growing competition.

The reason for this is simple: Once Internet users perceive the service to be expensive, they start closely monitoring their own usage. If internet access is affordable, users don’t hesitate to download a song from iTunes or having a lengthy chat using Skype. Although they now spend more, they are definitely getting more value for money! They’re also less likley to look for alternatives.

Based on our current experience with hotspots at cafes, hotels and MDUs (Multiple Dwelling Units), we’d like to make the following pricing recommendations:

Cafes/restaurants: 10 - 20 credits per MB
Hotels: 15 - 30 credits per MB
MDUs & Student Accommodation: 5 - 10 credits per MB
(Note that these are recommended prices for South Africa & other countries with similarly high bandwidth costs)

Please experiment with your pricing, perhaps by offering time-limited discounts. Be sure to distribute pamphlets informing users of a price drop. It’s important to find a ’sweet spot’, a price that is low enough to encourage the maximum amount of usage and customer retention while at the same time retaining sufficient profit margins to fund your next Skyrove hotspot!