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Experts Recommend: Top Value-Added Services for Residential Customers

ISPs need to offer more than just connectivity in order to retain residential customers—and in order to be profitable.

by Alex Goldman ISP-Planet Managing Editor [October 31, 2005]

In their ISPCON session, Top 10 Managed/Value-Added Services of Today and Tomorrow, Doug McDonald of Branch Run Communications and Mike Cassidy of ISP-Market said what ISP-Planet and they have said so often over the years: ISPs need to offer value-added services.

"While consumer accounts dominate the revenue side of cash flow," McDonald said, "ISPs see that the real growth in the future will come from sales of services to the existing customer base (WISPs aside)."

The precondition
In order for an ISP to offer value-added services to its customers, the company must be trusted by potential buyers. It is important, therefore, to talk to customers about what they're happy with and what they're unhappy about.

One audience member recommended using polls on the ISP's custom start page.

Another pointed out that some services are offered for free to retain customers.

McDonald also said that ISPs should think very carefully about building their own value added services:

"If you cannot build it better, faster, and cheaper than you can buy it, do not build it."

He then repeated the recommendation.

The top five value-added services
The top five services, according to Cassidy and McDonald (Cassidy will be releasing research on this subject later this year):

• PC check up and anti-phishing
• Switching tools
• Custom content
• Accelerator
• Data backup and recovery

If you offer PC check up services, McDonald said, you might want to have a service station. Allow customers to bring in their computers. You can fix their problems and upsell your latest value-added services.

Cassidy said that any ISP interested in acquiring ex-AOL customers should have switching tools, such as Esaya's TrueSwitch or Return Path's eponymous offering.

New value-added services
The top five value-added services have been around for some time. ISPs should also take a look at new value-added services, including:

• Content for children
• Hispanic content
• Home security and surveillance

Cassidy noted that the Hispanic population is the fastest growing in the United States.

McDonald pointed out that several ISPs already offer home security, such as RCN, with its WebWatch product.

RCN also has a game package called interACTION with a special offering for kids.

Conclusion
Don't offer a service unless it will have a measurable ROI. If you are giving away the service, the ROI is the number of customers you have retained because of the service.

It order to learn what services will be profitable, you need to know what your customers want. In order to learn what your customers want, survey them. One attendee said they regularly survey customers, with different surveys depending on the plan purchased and the customer type.

It all sounds so easy: know your customers, offer profitable services, stay within you skill set, and outsource what you don't know.

But that's deceptive. As every reader of this site knows, while the theory is deceptively simple, putting it all to work requires hard work.

— End

Also see: Experts Recommend: Top Value-Added Services for SME Customers