Why are we giving away this stuff for free? It’s un-natural March 14th, 2007  

I’ve been in and around marketing now for about fifteen years. I’ve cut it with the best of them; the early days of Orange, launching Peroni Nastro Azzurro round the world, re-branding O2, even trying to get Michael Howard elected against Tony Blair. But nothing makes as little sense a giving ten free international calls each month to a group of people we barely know.

Let me explain why. It’s un-natural and against the rules of business. These things have a value for heavens sake, and we’re just offering them for free unashamedly to a waiting world. What kind of a marketing strategy is that, not to mention a business strategy?

Let me give you some idea of the value.

In the month of February I made 84 international calls from my mobile, lasting a total of 9 hours, 22 minutes. For that, Rebtel charged me $11.68. (You’d think we’d get them for free working here, but no such luck.)

I worked out how much those calls would have cost me if I had just used the international rates my mobile network charges and, wait for it, the answer would have been £193.51. Yes, that’s correct.

They were pretty much all business calls, and I suppose working in the UK for a Swedish company means that many of my calls are international, but those are hardly one-off circumstances.

On an annualised basis, that’s more than £2300, which brings me back to my first point; that’s massive amount of money to be giving away.

It’s all Hjalmar’s idea. He’s the mad Swedish founder who’s driven to correct the wrongs of the mobile industry. I don’t know what happened to him before I met him, but somewhere along the way, a mobile operator really pissed him off. And he’s out to get revenge.

The good news is that he’s away on holiday this week, so if we charged £100 for those £200 of calls, we could still advertise ourselves as 50% off your operator. The bad news is that our customers are signing up hand-over-fist for the free service and if I take it down there will be a huge fuss.

The reality of course is that I, along with everyone else, have become conditioned to think that distance costs, and mobile distance costs more. If you are routing the calls over the internet, and running an organisation of 40 people rather than 40,000 it can be free. And the truth is, it will be free, whether it’s us that makes it free or the industry that capitulates. All we need is for Hjalmar to come back from his holiday.

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