Best of the ISP-Lists

The Importance of Selling VoIP

ISPs are learning that technology is not necessarily the most important piece of the business. Increasingly, it's sales and marketing that makes the difference between success and failure.

[August 23, 2005]

On the ISP-Marketing list in August, SM, wise enough to seek advice, asked:

"Seeking: wisdom from anyone with experience marketing VoIP services. I am just beginning to develop my marketing plan for our new VOIP services and have always made it a practice to defer to my colleagues' experiences."

[BH asked] "Are you going to market it: 1) directly yourself, 2) through resellers, or 3) a combination of the two? That decision could impact the way you market VoIP."

[DM added] "Are you planning to launch this product for sale to: 1) existing customers, 2) new customers?, or 3) both?

Are you going to provide the service over your own connectivity and network or to the connectivity customers of other (perhaps resold) partners or companies? (If you're selling off your own network, make darn certain that you know that it will work. Not all network providers allow VoIP traffic on their networks consistently or reliably.)

Is this a homegrown product or a reseller arrangement? If reseller, then your provider should be there to help you with both ideas and creative. The best resellers, regardless of product, offer marketing assistance, so you should expect it.

With the answers to these questions in hand, it's a lot easier to get started. The only experience that I can share is do not try to compete on price because you'll lose. If you're running your own network, look for existing VoIP traffic and target those folks first for a beta group.

Also, this is not telco dial-tone with its reliability. You will need to ensure that your customers understand this. I mean you should not slip it into the AUP/TOS on line 84 of subsection 64 paragraph 7, I mean you must ensure that they understand that if their Internet connection goes down, the phone doesn't work. If the power goes out, and there's no UPS on the router, the phone doesn't work. Better to not get 30 customers because they're concerned with it up front than to lose one loudmouth because he doesn't get it, blames you for everything, and then tells all his friends and customers that your service sucks.

I have very limited experience with marketing VoIP but the fundamentals are the same as other complex services. Information is king. The more you know before you start the less you'll need to learn later."

[GS suggested] "I would recommend deciding on your selling points: are you selling low price, premium service, top-notch support? Is the offering local, regional, nationwide? Who are your competitors? What do you offer that they don't? These may be ideas to start with. As stated above, it is also important to look at your sales channel. Are you selling direct only? Do you set-up a master agent --> sub agent --> customer model? Ultimately, who are your target customers?

There are a ton of VoIP providers out there. You need to find your differentiator. If you can sell and market that, then you will be way ahead of most of the present VoIP companies."

PR pointed out that the discussion applied to marketing all ISP services, not just VoIP:

"It's my opinion that we have reached the next phase for the ISP, and that phase is where you need to be a marketing machine. The days of selling connectivity are disappearing faster than a plate of homemade cookies. Bundling packages with connectivity stuck in the middle is the key. Also, becoming an expert in a niche is more important than ever.

For example, dentists use office software that the software company will not install or maintain. By combining the installation and maintenance of said software with broadband, backup (for HIPAA compliance), credit card authentication/tele-check via the web, LAN security (for HIPAA compliance), PC support, hosting, as well as a copier/printer maintenance/rental will be the road to take. That gives you high ARPU, with any services in a package price (so no price comparison).

As banks say, get the customer to take three services and the churn is less than 1 percent. (Did you know that bill pay services reduced bank churn to less than 2 percent?)

Get creative.

Mine your customer data.

Market your services as packages."

[SM concluded] "Well. Honestly, I think we are more interested in being able to reduce attrition due to not having these services. I don't necessarily expect that rolling out these services will be our next big revenue producer. But a strong and consistant marketing plan is called for, regardless. I'll keep plugging away. Thanks!"

—End