Insights from ISPCON's 5th Annual ISP-CEO Roundtable

CEOs get together and share their insights on the issues facing ISPs today, from the basics of acquiring subscribers, to technical questions about wireless service, to business issues such as reselling DSL and co-location.

by Christopher Knight [June 5, 2000]

While in Orlando for ISPCON, I moderated the two-hour 5th annual ISP-CEO roundtable that originally spawned from the private ISP-CEO email discussion list. This year we invited the public to join us, so it wasn't as private as the past four sessions, but it was still a great value for all who attended.

For those who could not attend, fear not as here are my notes from the event. The format was free flowing, which means that some sections we had more discussion and others did not.

Acquiring More Subscribers
The experts had some basic advice on acquiring new subscribers.

They suggested advertising in computer magazines to "get the techie people first."

They suggested that companies track every lead via their own database, becuase it is vital to learn how new subscribers and clients are learning of your company.

The CEOs noted that it's always a good idea to ask your customers for referrals. Several were giving subscribers free service, cash, or small prizes for the referrals.

Finally, if you have the cash and see an opportunity, you can always buy subscribers by acquiring or merging with another ISP.

ISP Billing Problems and Solutions
The first tenet is this: You should always bill in advance instead of arrears. Doing so will increase your chances of achieving a positive cash flow.

Since paper invoices cost you more than electronic billing or payment by credit card, the CEOs suggested billing between $1 and $5 to all customers insisting on paper invoices.

Most said that you're also better off if you charge annual instead of monthly fees. Many said the average discount given to consumers who pre-pay for a year of service is 10 percent, but some comapnies give more hours or extended service instead of a discount. Other CEOs disagreed, saying that if you charge less for an annual account than for a monthly account, the monthly account is worth more to you.

Payment books can cost as low as 12 cents per year per customer and can reduce internal billing costs.

Late fees can be a great income booster. Consider charging them for those who don't pay their bills on time. Remember, a late payment is like an interest-free loan and is not good for business.

98 percent of the ISP CEO's in our audience had in-house billing systems Of that 98 percent, 60 percent bought an outsourced system and 40 percent rolled their own software.

Outsourcing billing to your telco adds only about 25 cents per customer, and there are many downsides (such as having to wait 45 days to get the money and relying on your telco, who may also be competing against you). Nevertheless, using your telco will decrease your in-house billing costs.

HR Issues
85 percent say that they let have no dress code.

15 percent pay their inside sales team a commission.

80 percent had an inside sales staff.

We asked the audience how many subscribers a single tech could handle. The average response was that one tech could handle 1,000 subscribers for technical support.

Page 2: Miscellaneous issues and ISP Wireless issues