Why you pay what you pay for Exotel

Imagine this. You enter a footwear shop in your neighbourhood. You try on a bunch of shoes and finally select one. You then ask the shopkeeper how much it costs and he gives you a number. You are unsure if what he says is reasonable for the shoes or if you would be overpaying. You make some comparisons with other shops around, and you go ahead and buy the pair of shoes anyway. But there is still this nagging question in your head – “Did I overpay?”.

You can replace the footwear shop with any other service provider and you probably still have tons of questions around how fair their pricing was.

One of the many things we’d like to focus on this year is transparency. Transparency in every aspect. We believe transparency starts with our customers and so, that’s where we’ll begin.

We get many questions from our potential customers on our pricing and we realise that this bothers them. This is an attempt to provide you with as much information possible on our pricing model and help you understand why we charge what we charge.

Most of our customers (80%) use the “Dabbler plan”. So I’ll use that as the anchor to explain the pricing. Here’s what you would pay Exotel in a Dabbler plan:

The 2 Major components of the pricing plan are:

Exotel Credits:

Rs 5000 worth of credits which can be used for calls and SMSes. 

The Rental:

Rs. 4999 one time charge for 5 months (as per this plan)

What is the rationale behind charging a rental?

To deliver the convenience and complete off-premise cloud telephony experience, we operate:

1. The cloud software – Exotel dashboard, API engine, monitoring services, redundant servers, etc.

2. The telephony servers –The ones that handle calls

3. The tech team which works to keep this infra up and running

4. The telephony infrastructure – PRIs, hardware, Internet connections, Rackspace in top-notch data centers

5. The tools we use – Freshdesk, Pipedrive, Google Apps, Quickbooks, etc

We have essentially bundled most of these fixed costs into the rental that you pay (which amounts to Rs. 1800/month per account)

We do have specific pricing plans for large enterprises which typically use more than 2 lakh minutes of calling a month.  For such customers, we tailor the pricing to meet their needs.

What’s the deal with the call rates?

The price you pay for phone calls covers the variable costs that we incur for fulfilling these services. Also, these prices are tightly coupled with the number of minutes of calling that you do as the telecom operators charge us on that basis.

We do add a markup for the other variable costs that we incur as well. This also partly covers the salaries of all of us folks that serve you – The Sales team, Customer Happiness team, Operations team, Customer Success team and Tech & Product team.

Also, inspired by Buffer, and in our effort to continue to be a trusted brand we’d like to show how we utilise the money that you pay us. For every 100 bucks that you (a typical customer that uses the dabbler plan) pay us, the following is how we spend it:

PS: The above is a representation of our costs as it existed a few months ago. As you can imagine, this is fluid and changes over time.

Why a 5-month plan?

In the past, we have tried various durations like 1 month, 3 months, 1 year, etc. as we wanted to test what duration made sense for both the customer (you) as well as us. We have arrived at the 5-month period for the base plan as:

1. We provide a fully functional 7 day trial for free. So you have a long enough time to test out our product and make a purchase decision

2. We assume 5 months is long enough for a typical customer of ours to evaluate the gains from using Exotel

I hope this post provides you with some clarity on our pricing model and answers some hows and whys of our prices. We are keen to get your thoughts on this and see if this cost structure resonates with you as well!