Friday, June 26, 2009

A Little Bit of Business

While speaking at the FISPA meeting this week, I kind of focused on sales and marketing. One point that is important is that ISP's are NOT selling Internet Access. ISP's are selling reliable, dependable high-speed access to Facebook, YouTube and the rest of the websites and Web Apps that people desire to use. SAAS and VoIP means that ISP's need to be cognizant of the fact that if you keep selling Internet Access you will relegated to a dumb pipe. Instead, you should be offering not just the access but also some of those Apps. (That's what the RBOC's want to do).

ITSP are NOT selling replacement phone service. They are selling business productivity and efficiency through a new, reliable and redundant platform for voice service. It's NOT about saving someone 10% -- it is about understanding how the business uses the phone (and other communications services) to interact with prospects, customers, and employees.

The last piece of the puzzle is Scale. It's not about how many - it's about Who. (Ask Seth about Scalejacking). As a service provider, you want the highest margin clients that you can get. It is easier and more cost effective to have 100 clients you make a $100 each than to have 1000 that you make $10 on. You can stay connected to a couple of hundred, but most SP's don't stay in front of clients. At the FISPA meeting during the marketing session, I asked how many had a newsletter. Maybe 3. Why? I have no idea. RAD-INFO offers a service that makes it easy to send out a Newsletter. We give you the content monthly, you slap it into ConstantContact or iContact, and send it out. That's one way to stay relevant to your clients as more than a dumb pipe line item on their monthly bill. It's also a way to upsell and to prove you are the Expert. The deeper you get into a customer, the higher margin they are - and the higher the Lifetime Value of the client is. (Important numbers).

Michael Tague did a session on SWOT that included how to calculate churn. If your churn value is higher than 3%, you are in trouble. You can calculate how much trouble here. But at 4% churn, you will turn over your entire base in 2 years.

A little scattered of a posting but I wanted to write down some important points that were delivered at the meeting.

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