Vonage Races to the Bottom

Tom Keating finds out that Vonage is pursuing a very cheap monthly pricing strategy to retain users. This is called "churn prevention" and is much like running a charge twice on a credit card knowing that it will be 30-60 days before the error is caught and credited. It makes the numbers appear better, but really is a salve on a wound that needs sutures to close the gash. Given the stock price and performance and now the service price has dropped too, one thing buyers of either have to ask is, how good of a buy is it really?

Comments

[JayKolbe]

Wanted to provide a little background on the $3.99 plan to stay with Vonage...This promotion is not new and has actually been around for several years now (at least 3 years or so), and it's usually used, when/where necessary, as a short-term retention promotion. That said, this is by no means something Vonage uses broadly. Less than 1% of Vonage’s total customers are currently in the $3.99 program. Since this is such a small number of Vonage’s overall customers, the plan's low price point does not significantly impact the company’s financials.

Full disclosure: I work for Weber Shandwick and provide third party PR support for Vonage.

[ReadMeToo]

I am a Vonage affiliate and none of this info has been passed down to us,

Please document factual source.

I want 10 phone lines at that price in different cities listing to promote my Domain and Web Hosting business

[JimCanuck]

I think it sounds more like a case of suffering from an aortic aneurysm where the bleeding can only be stopped by emergency surgery.