On Thu, 23 Feb 1995 12:41:50 -0600 David Chapin <[log in to unmask]>
said:
>That's a very pessimistic attitude. I view it as a positive,
>image-building period.
Now you sound like a salesman :-)
>Eric, you are discussing something totally different here.
No, I was discussing exactly the same thing: human nature. If there were
a dozen providers offering free trial periods of SIX MONTHS, noone would
actually be paying for the service. People would just hop around from
trial to trial. Why pay when you can get it for free? :-)
>True. But by offering a trial period for use of your mailing list
>services you are doing two things: 1) building customer loyalty to your
>product; and 2) deferring a payment, which at the beginning the
>discussion group is generally unable to pay anyway.
You're mixing two issues here. There are people who have a list and need
a new home, and then people who are wondering whether to start a list.
They have very different profiles.
People who have a list and suddenly find themselves looking for a new
home don't need an incentive to try LISTSERV. They already know exactly
what it can and cannot do. Their only problem is to get organized to
collect funding. They may need a break, a deferred payment plan. They
don't need a trial, because they know exactly how useful the list is and
what LISTSERV can do for them.
People who're wondering whether to start a new list do indeed wonder
what's the difference between LISTSERV and Eudora. But they're not unable
to pay. If they call a commercial provider they know there's going to be
something to pay and they'll have thought about this in advance. They may
not have much money and in particular they may not have a commitment for
more than say 3 months. But they'll know what they're getting into,
otherwise they wouldn't be calling a commercial provider. The fees for a
personal list are on the same order as the cost of an Internet account so
it's not something that ordinary people can't pay for a couple months.
As far as I see it, this is a non-issue for new lists. People may need a
short trial run in order to see what this mailing list business is really
about, because they've just read about it in a magazine and don't really
understand it. But it doesn't take 6 months to figure out what a mailing
list is. As a matter of corporate policy, our sales folks generally give
trials to customers who genuinely need them, so I don't see any problem
here. If people aren't sure what they're getting into, we'll help them.
The people who have lost their list now are naturally looking for a free
solution. There's nothing wrong with that. Ordinarily, it works out just
fine, too. Just now it doesn't work too well, because there are over a
hundred lists that are all in need of a new home at the exact same time.
System administrators usually have some freedom in deciding what lists to
host, but it's not like they can add a dozen each and every month, it's
more like 1-2 per month. So, it's going to take a while for the lists to
find a new home. Naturally it would be very convenient to get a free ride
for six months to have time to find a more permanent and free home. But I
don't see what the service provider has to gain in this bargain. People
will want a free home not just because of the money but because of the
hassle of having to organize the collection of some $40/month from say
200 list members. I'd look for a free home if I were in this position,
too. I'd pay in the interim, but I'd want to get rid of this hassle as
soon as possible. It's already enough work to process the delivery
errors. Whether I as a shareholder of L-Soft like it or not, this is the
situation. For the kind of list we've been talking about (hobbies, pets,
etc), where each subscriber would pay a few cents a month, the hard
reality is that you pay for the privilege of having to do some tax
collection work on top of your current list owner duties. It's enough
money that you don't want to pay everything from your pocket, and yet
it's small enough that we're talking about collecting a few dollars a
year from each subscriber, presumably banknotes in the mail, and then
what do you do for international subscribers? This is no fun at all and I
don't expect anyone to put up with that kind of arrangement in the long
run. I just don't see any kind of future profit coming down this line. It
doesn't matter that you get better service if you have to spend hours and
hours collecting pennies from hundreds of people.
The kind of setup that does work is when you have a local club of say XYZ
race dog owners. The club can probably pay $10/month and find another 3
clubs to pay the rest. One club pays the provider and the others exchange
checks once a year, and it's no hassle at all. Another option is to find
a sponsor. We're talking about sums on the order of $500/year, maybe a
brand of dog food would be willing to pay that in exchange for being able
to put an ad in the welcome message. This would only work for the larger
lists, though; the first question they'll ask is how many people read the
list :-) In such cases there is an initial setup effort in organizing
everything, but very little work to actually collect the money. This is
where I see possible long term profits.
>And, I can assure you, it is a pain in the %$# to leave. Obviously, the
>group will have no intention of using the free trial and then moving on
>-- this is very hard to implement unless it is a tiny list in the first
>place
Quite to the contrary, it is extremely easy. It can be done in 10 minutes
and the old address can even be made to work. Unless of course you have
hundreds of documents you need to migrate together with the list. In the
worst case it will take an hour. L-Soft charges $10 for a transfer from
an existing LISTSERV list, and that's mostly for the time it takes to
talk to the customer and get the files we need. If it really took several
hours of work we'd charge a lot more than $10.
>Think of this issue the same way that the cellular phone companies do by
>giving away free cell-phones for a service connection contract. In the
>end they make up the cost of the phones in service charges over time and
>the customer ends up feeling the service is indispensable and is
>reluctant to give up the convenience, thus providing profit for the
>company.
This makes sense for a cellular phone company whose business is to
collect small amounts of money from millions of people. These
organizations have a structure that makes it easy and profitable to talk
lots of people into using a cellular phone regularly. L-Soft has a
radically different structure. We're the company that sell routers and
radio equipment with which you can build a cellular phone network. If you
sent us 100,000 people who wanted a cellular phone on a silver plate, we
wouldn't know what to do with them. We'd have to start a new company with
a radically different structure just to be able to process their orders.
Both are perfectly valid business opportunities, but they require a very
different kind of structure. With the EASE service we're not looking into
running 100,000 personal lists over the next couple years. This is mostly
a service for businesses who want to use the Internet for announcements,
technical support, newsletters, etc. Personal lists are welcome of
course, but this isn't the business plan, and it can't become the
business plan without a major restructuration, because we're just not
organized as a service provider for the masses.
Eric
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