Consultants are an ISP's Friend

ISPs are beginning to realize that business customers are more loyal and provide more revenue, and are upgrading their service. There's plenty an ISP can do to earn more lucrative accounts. One key suggestion: work with those who already have business customers.

by Brock Henderson Principal, Henderson & Associates [August 25, 2006]

Many ISPs focus on individual residential consumer sales for their base of business rather than even attempting to sell to business accounts, but it is getting tougher each year to make money from residential accounts. . The most significant problem is churn. Since residential customers often tend to look at internet connectivity as a commodity, there is little to keep them loyal to the ISP unless you have done an excellent job of educating and taking care of your base. Even then, you will still get calls from customers asking if you can match a current competitor's price. (Of course, the competition is usually only discounting for a few months and then will hit them with the "normal" rate; all too often, the customer still views the offer as "a deal".)

Residential customers cost money to support. Generally, they are not technically savvy, and support calls add to costs.

The ILECs are competing for residential customers with products priced below cost, especially broadband. These residential services are subsidized by regulated and protected business lines—and by the ILECs' own business customers.

We're not saying that every business account is easy. Business customers can certainly be demanding and picky as all get out, but over the long haul, they have some very strong advantages as customers:

1. Businesses are willing to pay more, (even for DSL you can charge a business more than the residential customer). And a single business T-1, which can cost hundreds, if not thousands of dollars a month, generates more revenue for the ISP than a large number of DSL residential accounts.
   
   
2. Businesses are willing to sign long-term contracts for service. In this area, a three-year contract for a T-1 is pretty much the norm, but some businesses will sign a five-year contract. That's three to five years of guaranteed revenue, unlike the residential customer who could leave you on a whim.
   
   
3. Businesses are predisposed to renew the contract with you at the end of the term. This assumes, of course, that you have provided the quality service and support they expected at the beginning. (NOTE: It is best to start the contract renewal process six months before the end of the current contract. You might even consider giving them some sort of "renewal bonus" to help insure that they don't go price shopping or get led astray by a competitor.)
   
   
4. Businesses generally have a technologically savvy individual on staff to deal with most of the computer and internet questions and problems, which means the ISP has fewer tech support calls; and the ones they do get come from people who speak and understand the technology.

So how do you go after the business customer? There are two basic options:

1. Hire someone to call on businesses, or
2. Use people such as network consultants to sell your services.

If you hire a salesperson to call on businesses, your new employee will be faced with a daunting task. Not only do they have to build a relationship with the prospects, but because businesses typically sign multi-year contracts for service, the time needed to close a sale can be lengthy. It could be months before someone comes to the end of their existing contract and is ready to talk with your salesperson. This can be exceptionally frustrating if your salesperson works on a commission basis, and could cause them to quit.

The best option is to hire someone to ""get to know all the network consultants that they can. The network consultant already has an established trust relationship with their customers, so whomever they recommend as an internet provider will probably be easily accepted. Obviously, the network consultants need to be "sold" on your service, so you might want to consider giving them a T-1 just so they can see how dependable your service is. But that is just the beginning of the battle.

Let's say that, in general, they like you and are willing to consider recommending you. Remember at all times that you need to do everything possible to make them (the consultant) look good to their customers. The more you can do to improve their customers' opinion of the consultant them, the more they are going to help you.

In other words, you need to support them and their efforts in every imaginable way. This is basic principle of Relationship Marketing: helping the other guy succeed so he can help you succeed.

Create brochures about your business class services and put their logo on it. Yes, their logo. You can add yours, but their logo must be the dominant one. Perhaps at the end of the brochure you can put the line: "(Consultants name) proudly recommends internet connectivity through (your company)", followed by your logo.

This way, the brochure advertises your services but looks like it was created by the network consultant. It is a tool they can use to reinforce their relationship while at the same time selling your services.

Offer to send senior engineering staff out on difficult calls to help the consultant present the internet connectivity, and help address any technical issues the customer might have.

Give the consultant's entire staff matching knit shirts with their logo on it. (Be sure to get everyone's proper size before placing the order.) Not just the techies … every single individual in the company should get a shirt.

Some companies have favorite charities that they like to support. If that's the case for your network consultant, then support the charity, but do it in the consultant's name. Let's say the consultant is going to sponsor a booth at a church picnic, then send some of your people to help man the booth. Note: go as if you are friends of the consultant, and not as employees of an ISP. You are doing it to help him help the charity, don't advertise yourself to the general public in attendance, your consultant will know you were there for him and that's what you want.

Perhaps they are sponsors of a Little League team, then provide bottled water -- again with his logo on it -- for the team and to be sold in the concession. The water doesn't cost much and, believe me, it will go a L-O-N-G way in solidifying a lasting relationship between the two of you.

If you do everything you can to help your consultant present a positive image, not just with customers but with the community in general, your consultant will recommend your service more and more. Help your consultant obtain business and your consultant will sell your service.

These are just a few suggestions concerning how an ISP can work with local consultants. Nobody is suggesting that an ISP spend all its resources on consultants, neglecting other key market efforts such as advertising, public relations, and working with your own causes. But if you're getting started, you need an quick path to obtaining business customers. Network consultants can do this for you.

Don't give all this support to just one or two network consultants, but to every one you want to do business with. You will have to prove your support with some, so it may take a while before they realize you are really sincere, but when they trust you, the new business will come. If you do this for all the network consultants you deal with, your business will flourish.

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