Rural broadband providers operate in a complicated landscape where they navigate competition, regulation, environmental factors, and other fluctuating circumstances. When setting prices for broadband, video, voice, and security products, decision-makers need to be able to sell at a profit without losing customers or tarnishing their reputation.
The 2024 Innovative Systems Rural Broadband and Video Study confirmed that for rural consumers who gave high ratings for their internet service, most agreed that the price they are paying is a fair one. The report also revealed that 32% of the respondents are not satisfied with their internet speed, and 29% would be willing to pay on average $83 a month for better service.
The average amount spent on internet alone in 2024 is $69 a month, so the potential for an extra $14 a month could be a real difference-maker in bottom-line company revenue. This is a good benchmark for rural service providers, but it is important to consider other demographic factors within your service area.
Rural broadband customers overall are satisfied with their internet providers, rating their satisfaction as a 7.7 on a ten-point scale. For customers with high satisfaction with their provider, a fair price is one of the top influences on the score. At the other end of the spectrum, subscribers with low internet satisfaction cite broadband pricing that is too high as a negative factor. This underscores the impact that price setting has on customer satisfaction.
Broadband Service Providers are finding additional avenues to profit and raise customer satisfaction by adding managed services, bundled voice and video products, security offerings, and other add-ons. Of the rural broadband subscribers surveyed, 33% subscribe to a managed service on top of their Wi-Fi, paying on average an additional $17 per month. A product or company’s stickiness can be measured by evaluating the percentage of engaged customers, and having customers who pay for additional services improves that score.
Quality and speed of the internet connection and customer service also rank as important influences for consumer groups, and providers need to consider those as well as price. For price-sensitive co-op directors, these drivers of customer satisfaction can be cited as justification for pricing decisions or technology investments.
When you look at the data collected from rural consumers, price sensitivity is not necessarily the driving factor in their decision-making. Service providers deliver broadband, video, and voice services to rural customers with limited entertainment options. A family of four attending just one NFL game or concert in a metropolitan market hundreds of miles away can expect to pay at least $1000 or more — equal to about six months of service for a bundled broadband and video package from their local provider.
For more insights into pricing your products for profit, Innovative Systems and JSI will be hosting a webinar on May 21st at 10 AM CT. For registration information and other upcoming events, visit https://www.innovsys.com/innovsys/events-and-training/.
Scott Meyer, Director of Marketing
Innovative Systems
Scott has been involved in marketing for over 35 years, for the past 16 years as Marketing Director for Innovative Systems, where he has been helping service providers promote and sell Innovative Systems solutions to their end users.
