🚀 go-pugleaf

vanya@super.zippo.com (Raskolnikov) writes:

>Hooking up is like shipping and handling charges. It's a rip off. It
>should be a cost of doing business. Does 7-11 charge you for walking
>in the door before you even buy anything? No, it's incorporated into
>the cost of all products for all people thus lowering the total cost
>to each individual... 

Actually, connection charges have a greater purpose than simply to rip you
off at the onset.  It's to discourage customers from jumping ship or taking
advantage of introductory offers then dropping service.  If you've already
had to put in $35 (or whatever), you're not as likely to just up and leave
because you will feel that you've "lost" that $35.   It's a tool that works
very well in long distance, cable, and other oligopolistic markets.  It cuts
costs for customers in the long run.

Of course, there *are* costs involved in hook-ups and setups that need to
be paid for:  administrative costs, mailing, software licenses, etc.
If you incorporate the cost into the service, the per diem rate goes up.
Psychologically, it is easier to foot a $30/month with a $30 one-time
setup fee than to pay $32.50 a month forever.

And the 7-11 analogy doesn't apply here.  7-11 doesn't give you software
or technical support.  7-11 doesn't require more than 2 people to operate
the establishment.  7-11's customer base doesn't grow that much.  And while
7-11 may not charge an "entry fee," they sure do pass along the cost to
the consumer.  If this behavior was ideal, then membership clubs like Sam's
Club would all be QuikyMarts instead.

- E

--
Eric Sasaki - IBM Co-op |     gt7294b@prism.gatech.edu / esasaki@nyx.net
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  SGA Member at Large   | Georgia Tech -- The 1996 Centennial Olympic Village