Best of the ISP-Lists

Beating the Branded ISPs

Several ISP professionals discuss methods of gaining the long term loyalty of customers who have become accustomed to bad service from the big ISPs.

[April 16, 2004]

On the ISP-Marketing list in April, PR posted a link to a story about how wireless carriers must market well to skeptical users.

"In this article replace "wireless carriers" with another term, say, "ISP." This is great article describing target marketing and differentiation."

Many agreed.

[RS noted] "Interesting that you bring this up. I've been doing a lot of research on Branding and one of the single-most important branding strategy is to narrow your focus. The "all-things-to-all-people" approach broadens your market but weakens your brand in the long run."

[GD wrote] "That's precisely what Porter (in Competitive Strategy) calls 'Stuck-In-The-Middle.' This is the try-all to do-all strategies and really not being perceived as anything."

JG disagreed:

"Are you saying that AOL has not distinguished itself from other ISPs? If any ISP epitomizes the 'all things to all people' approach, it is AOL. AOL also seems to do a fairly good job of getting a high price too. Maybe there is something else involved here."

PR replied:

"I think the AOL factors are: that they are easy to get (CDs everywhere); easy to use; family friendly more or less; and were an early leader."

[GR mused] "Everyone knows who AOL is. AOL has spent millions seeding the market for years. They have a simple name 'AOL' , and they offer free service as well as simple installation disk that can be found in everyone's mail box or post office. But they have done a terrible job at customer retention. Could it be that they have 1 existing customer for every 10 that have signed up in the past?

Not so sure if it is something AOL has done wrong or if this is just the customer exercising their 'choice' of providers, where they cannot easily do that with telephone or cable companies. I think that the woes of AOL as far as customer retention is concerned is something that every ISP faces, and that most ISP's can not escape from with dialup customers for a good percentage of the market. Remember that commercial that had a fiftyish guy who said, 'I change ISP's daily'? I really hated that commercial."

[GD asked] "A thought—would users 'change ISPs daily' if ISPs had a one-time setup or 'installation charge' like the telcos. It's just that it is very easy to change ISPs and that you could probably change at least five times a day if you really wanted to."

[LP said] "I would have to disagree with this one. Satisfaction and Loyalty go hand and hand. Have you ever seen a dissatisfied loyal wife or customer?"

[EL replied] "Sure there are a lot of bad marriages out there that take years even a lifetime before they end in divorce!"

TC argued that customers think that no ISP offers good service, with disastrous effects on the market:

"If the customers aren't being taken care of, they will shop around and jump ship—often on price. If they truly feel no one has great, or even good service, but they must have access; then price rules. In other words, if everyone provides crummy service then you might as well pay the least for it."

[EL noted] "Aside from the obvious answers, you first must know your customer and what they like or don't like about your service or product. Without a survey we would all be just guessing."

GD returned with some data to suggest that charging an exit fee could be useful:

"Let me share some feedback from an ISP (1,500 users) that we support. I called them between this and our last e-mail and learned why they charge a $20 startup fee, which I learned is accepted by more than 98 or 99 percent of all new prospects. The ISP does not necessarily feel that the fee is an exit deterrent. They strongly affirmed that this small fee offsets costs and enhances their profitability picture. The fee covers a variety of costs associated with service provisioning."

RY returned to an earlier thread, arguing that AOL does not do all it can for its customers, but argued that this gives local ISPs a potential advantage:

"AOL is not an all things to all people. I could go on for hour listing hundreds, if not thousands, of items that many of us provide for our customers that AOL will not do nor even tries to do.

Some of these include:

• firewalls
• computer repair
• wireless access
• computer consulting
• network consulting
• computer sales
• network installation
• etc."

PN riposted:

"Would it be more helpful to list items what AOL provides and you don't?"

JL stabbed right back:

"Here's the short list of what AOL provides that most ISPs don't provide:

• proprietary non-standard e-mail blocking
• company sponsored spam direct to mailbox
• popup advertising
• busy signals
• high prices
• long waits on hold
• lots of proprietary software added to your machine
• long waits for tech support
• impossible waits to cancel service
• extra charges if you pay by check"

—End