Saturday, April 18, 2009

Savings minutes saves nothing

AT&T, like many companies has jumped on the saving bandwagon. After all, saving is cool now, as is prudent spending. Opulence and excess will have to wait until the Dow gets back above 10,000 or more.

On first listen, AT&T's spot, one of a series that uses little orange ticking clocks to symbolize phone-plan minutes, seems to make great sense as a penny pinching mother admonishes her blazee son for trying to sell their unused minutes.

"You know, saving minutes saves money and we can't afford to be wasteful," she snipes, "Not every one gets to keep their unused minutes."

It makes sense until you start doing the math, anyway. In reality, you pay the same amount for your allotted minutes each month, so you can't save by using less of them. If you have unused minutes, it means that you essentially have unused goods that you've paid for. And since the cost of your minutes is fixed, the less you use of them, the more you're paying per minute. So, saving minutes doesn't save money. Saving minutes actually wastes money, and from a theoretical perspective makes every minute you do use more expensive. And if you're wondering, the bulk of Americans ends each month with plenty of minutes they neither used, nor needed.

So, kudos AT&T. You pulled a fast one that I'm sure that a great multitude of people will miss and get to pad your bottom line with their misunderstanding. Let's just hope education reform doesn't help out America's math skills and start skimming away your profits.


Anonymous said...

Hey Hal,

These ads are for AT&T's Rollover feature, where each month's unused minutes roll over into the next month, so unused minutes from previously months can actually save you from overage charges when you exceed your monthly allotment. Yes, AT&T could just charge overages at the same rate as other minutes on your account, so an overage would result in an extra $10 instead of an extra $300, but I thought the folks behind these ads did a good job making nebulous rollover minutes into something tangible.

Spork in the Road said...

Mitzi, your point is well taken. The rollover minutes feature is not a bad one and can be handy for some folks. I also think the folks who did they ads did a pretty slick job of turning a nebulous feature, as you put it, into a tangible benefit.

My only qualm was with their math claim. While it's true that actually using the rollover feature when you go over your minutes does save you money vs typical overage costs, the average person doesn't use all of his or her minutes every month. And if you've got excess minutes sitting around, it's tantamount to excess stock- something you've paid for but aren't using, making the price of the things you have used greater per unit.

So my argument is more about the semantics of their math in reference to the greater portion of the population, not the usefulness of the feature, which I agree could be a lifesaver.