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#35244 by hteinlin
Mon Nov 30, 2009 7:47 pm
I know the current program is set to end 12/31/09.
I know that Ooma cannot keep doing it as it cuts into profits.

But since additions to service are done at no cost to Ooma. E.g. what does it really cost Ooma to provide a subscriber Premier service, I'm pretty sure there is no added charge to Ooma itself.

When current promotion end, why not change it to something like unlimited referrals. Every referral earns you 2 months extension of premier service.

What better way to market yourself than letting actual customers do it for you, word of mouth is powerful, especially when there is an incentive to keep getting free services :)
#35245 by allo
Mon Nov 30, 2009 8:27 pm
hteinlin wrote:I know the current program is set to end 12/31/09.
I know that Ooma cannot keep doing it as it cuts into profits.
...


I don't see how it cuts into profit since the Telo is priced at $199 anywhere you look: BB, Newegg, Amazon, Costco...as well as Ooma?
If anything cuts into profit, is selling it through retailers; because they usually get no less than 35%- 40% of the price of the item... which means they pay Ooma around $120 per unit.
If anything, ooma gets more by selling it directly to the consumer... therefore more profit $199-$25(for referral)= $174 Vs $120 from a retailer!
However Ooma can not keep selling it at that price ($199), while asking the retailers to sell it at $249, because most retailers would get pissed off for being undercut by the producer, and may no longer want to sell it!

The funny thing is the Telo is selling nowadays for less than the Hub/Scout ($199 vs $229)
#35265 by hteinlin
Mon Nov 30, 2009 10:37 pm
While it may seem like the company would make more money selling direct it might not always be true.

E.g. if Best buy orders 1,000,000 units from Ooma.
Ooma front manufacturing costs (or Best Buy might even pay for 1000000 units up front)
Manufacture
Distribute to Best Buy's distro center
The transaction is done. Ooma gets say at $120, $120,000,000 quick cash.

If Ooma distributes directly.
They have to maintain product stock to ensure timely shipments.
So they will have to front manufacturing costs.
They will have to maintain storage facilities.
Maintain small order distribution.
Recoup manufacturing costs at order by order basis.
Since most manufacturer/retailers operate on loans, Ooma may be paying interest and the time it takes product to sell will affect overall profit on it.
Also keep in mind the longer a product remains in storage the higher chance for shrink.

So while it may seem direct is more profitable, I would not be surprised if the retail chain is still a much better option for them.

Anyways back to the topic, Ooma may not have to give $50 off the entire time. But they should maintain a referral program indefinitely. Also as for incentive, for a company it would be better to provide an incentive that doesn't cost the company anything (i.e. Premier service). But giving certificate to Amazon is definitely costing Ooma.
I'm sure Amazon cut them a deal but lets face it, they are not going to do it for free.
#35330 by oomg
Tue Dec 01, 2009 12:09 pm
hteinlin wrote:I know the current program is set to end 12/31/09.
I know that Ooma cannot keep doing it as it cuts into profits.

But since additions to service are done at no cost to Ooma. E.g. what does it really cost Ooma to provide a subscriber Premier service, I'm pretty sure there is no added charge to Ooma itself.

When current promotion end, why not change it to something like unlimited referrals. Every referral earns you 2 months extension of premier service.

What better way to market yourself than letting actual customers do it for you, word of mouth is powerful, especially when there is an incentive to keep getting free services :)


I made a similar suggestion earlier this year relating to expanding the use of the Premier service.
See: viewtopic.php?f=6&t=512&p=3259&hilit=+oomg#p3259

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