How to Make Pooling Fair

Posted on Posted in Articles, Cost Savings, Misc, Telecom Expense Management

I assume everyone is familiar with pooling at this point. Either you’re paying a certain amount for a block of minutes, megabytes or texts, from which each user on the account can draw from, or each user has an individual plan which gets combined to create a pool.

Seems simple enough right? Then why is it unfair?

Inability to Change

Usage changes from month to month, especially if you’re a seasonal company. But even if you’re not, there’s always a peak season or a downswing during the Christmas holidays. Having the ability to adjust the pool on a monthly basis, either by increasing or decreasing capacity is essential. Many of the Canadian carriers don’t seem to care about this, however it’s fairly standard in the United States.

Every user has the same set of contributing minutes/megabytes/texts their contributing and that doesn’t change regardless of the season. This is the first practice that needs to change. We need to have the ability to upgrade or downgrade a user’s plan on a monthly basis. If you’re one of the lucky users and have the ability to increase or decrease your pools capacity, that’s great! But it’s important to actively manage your pool on a monthly basis so you don’t get overages.

Bad Timing

Once a pool is exhausted, all usage afterwards will be charged. That means that if Johnny Talkalot used 10,000 minutes at the beginning of the bill cycle, thus using up the voice pool, and you decide to make one phone call at the end of the bill cycle, you’re going to be charged, not Johnny. Does that seem fair? Overage charges should be split based on usage, not bad timing. If you exceed your voice pool and incur $1000 worth of overages, it should be split among the heaviest users.

A Perfect World

Let’s say everyone in your company pays $30 for 450 pooled minutes. Regardless if you exhaust your pool or not, if you use 300 minutes throughout the month you should only have to pay $30. Makes sense right? If you use 600 minutes and you don’t exhaust your pool, then you would only have to pay $30 also since there is no overage to account for. In a perfect world, that’s how it would work. Now if you use 600 minutes and you exhaust your pool, you should theoretically be paying $30 + 150 minutes (600 – 450 = 150 minutes). So how do you determine the cost per minute?

Cost Per Minute

The cost per minute would be calculated by determining how much overage charge there is, divided by how many people went over. Let’s say we have 100 users, all contributing 450 minutes, totalling up to a 45,000 minute pool. Most users are under the 450 limit, but there’s a bunch that go way over, resulting in 10,000 minutes over your pools capacity and $1000 worth of overage. Currently, that $1000 is going to be charged to anyone who used their phone after the pool was exhausted. Even if it was for only 5 minutes at the end of the month. Since that’s not fair, we’re going to take that $1000 from those users and hold on to it. Now we’re going to look at those 100 users and determine who used more than their 450 minutes. Let’s say a bunch of users used 600 minutes, a few more used 1000 and couple users used 5,000 minutes. You may have only gone over your pool by 10,000 minutes, but there could easily be 25,000 minutes associated with all of the users that went over the 450 limit. So we take $1000 divide by 25,000 and get our cost per minute, in this example it’s $0.04. Going back to the previous example of 600 minutes, that user would pay $30 + $6 (150 x $0.04) = $36. A fair price for the minutes used.

Conclusion

While the best option is to simply avoid overages, we know that’s not always possible, and do you really want to pay extra for a pool you’re barely using? It would be great if the carriers could implement something like this but I’m not going to hold my breath. It can be done fairly easily using excel if you know which reports to download and you have some spare time each month. At Avema, this functionality is built into our system by default with many other options. We know how important it is to have fair billing and pooling is a big part of that. Contact us for more information.

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