[8750] in Commercialization & Privatization of the Internet
ANS Diamond Mine Pricing strategy
daemon@ATHENA.MIT.EDU (Gordon Cook)
Fri Dec 3 00:05:06 1993
From: cook@path.net (Gordon Cook)
Date: Fri, 3 Dec 1993 05:04:31 GMT
To: com-priv@psi.com
I am looking to better understand sales strategies by the commercial internet
service providers. While they may run "specials" from time to time most seem to
at least have a price list where if you are shopping you can get a rough idea
what the asking price is for a connection of a given size.
ANS appears to be an exception to this rule. They operate something known as a
diamond mine strategy. I asked one ANS customer if he would explain how diamond
mine worked. He suggested I ask ANS directly stating that he believed his
diamond mine agreement was restricted by non disclosure.
I did. I got back an answer which left me with the following impression.
Diamond mine was especially useful for a customer just starting out who lacked
money up front to pay for a connection. That ANS and such a customer would
agree on an annual price. That ANS would hook up the customer and begin
service. That the customer would have x number of months (3, 4, or 5?) of free
service and that at the end of the free period the customer would be obligated
to pay ANS every month (presumably out of customer revenues) 1/12th of the
agreed upon fee (presumably plus an additional percentage representing interest
on the period of free installment).
I asked ANS if this was an adequate explanation of how diamond mine worked and
was told that it wasn't clear and besides *every diamond mine customer was
different* so there could be no one overall explanation of how it worked.
Needless to say I am not satisfied with that level of explanation.
Consequently I would like to appeal for some help by anyone familiar with
diamond mine in understanding how it works and how happy people are with it.
I'd prefer on record comments but will be happy to have off record information
as well.
