Today I continue to share the discussion I had recently with Dan Schulman, CEO of Virgin Mobile USA, arguably the most high-profile successful MVNO in the U.S. market. Monday we featured his comments regarding the state of the MVNO market and Virgin Mobile's role in it. Today we share with you his insights about the company's new pricing plans and features, future plans for high-speed data and Sugar Mama, that new program that gives users free airtime in exchange for watching advertising.
On how Virgin Mobile is attacking the youth market: "We have 2,000 insiders that are alpha teams we've selected and talk to every month. We run advertising by them. We have to be strong and get good honest feedback, but it can be painful at times. For our newest pricing plans and features, we talked to 6,000 people that were either prospects or current customers. That's a ridiculously high number, but it's a part of how we hope to differentiate ourselves… We looked at different usage groups to come up with our new offers. We completely revamped our portfolio. One of the things we've done is offer something no one else has in prepaid: text bundles. We're giving text messaging for as little as a penny. More than 60 percent of our base uses text messaging on a regular basis… We do think that for the youth market, text messaging is the new talk out there… We put out five bucket plans, starting as low as $14.99. That's the lowest in the market for buckets of minutes… Unlike everyone else, we're not forcing customers to register a debit card with us, they can pay via Paypal, credit card, cash or via the Top Up cards we sell… There is still a chunk of customers who want to pay by the minute so we've offered a deal for $6.99 month that allows users to get a 10-cents-a-minute rate all the time. Everything in our value proposition is based on customer feedback.
On the company's new social-activism campaign known as RE Generation: "One of the things I wanted to since we are now a profitable company and have reached a certain scale is to figure out how to enable customers to become an activist base to advocate for social change… The youth market is generally concerned about social issues but they struggle with how to get involved… One of the things we decided to do was put our money where our mouth is and help customers get involved in pro-social organizations. We're now teaming with two organizations, Youth Noise, the 'MySpace' of socially active kids, and Stand Up For Kids, which is focused homeless teens and trying to help them get back on their feet… Anytime our customers download a ringtone, wallpaper or game, we give 5 percent of the profits to those charities, and we are also working with a couple of artists who are yet to be announced who have agreed to give 50 to 100 percent of the profits from their ringtones to charity as well, and we'll give 100 percent to charities as well… Customers can also go into their bank account and short code a dollar to Stand Up For Kids or Youth Noise, and we will match up to $500,000… If you are a youth marketer, it's not just a nice thing to do, it's an essential. We're going to carry this on and expand it in the years to come because kids expect brands to do that kind of thing.
On Virgin Mobile's plans for EV-DO: "We try not to think of it in terms of EV-DO or Rev. A, but try to think about what the applications our customers want. Will the customer feel satisfied? And what will the pricing be? When you get all of those aligned, you have a good thing… What we're going to do is continually take advantage of the customer experience element of some of these new applications customer want now but can be enabled as a result of faster connectivity. Primarily, that is really around video at this point. Streaming video works just fine. You don't need EV-DO right now."
On newly launched Sugar Mama: "For our population that really does matter because they are on tight budgets. They have spare time, love brands and love to be entertained… We spent a lot of time thinking about the right way to do this, and we got a huge amount of feedback about what was okay and what absolutely was not okay. A lot of people are talking about advertising on the phone, but not many kids have video capabilities for video advertising (Kids have the ability to watch online ads or answer questions via text messaging.) The majority of our customers are new to the industry so they don't go with the most advanced phone out there. We also felt everyone would have to opt-in… Kids have been marketed to since they were 1-year-olds. They are savvy about it. We wanted to have like-minded brands that appeal to them… Our market research tested off the charts for us in terms of how kids reacted to it." - Lynnette