Monday, November 02, 2009

Get Beyond Price

Over and over I hear from ISP's (and VoIP Providers) that they need the cheapest rate, so that they can keep their prices low. In some cases, that low price is actually costing you more than you think.

If your service provider for Hosted PBX or SIP termination or LNP or Internet Backbone or MPLS has issues, they affect you and your customers. It affects your Brand.

Do you value your time? If so, that means that perhaps the cheapest wasn't the cheapest after you spend hours dealing with billing, provisioning and repair issues.

Do you value your customer? Do they need outages? Or crappy service?

Do you even know what your real costs are?

What is your Customer Acquisition cost?

What is the Lifetime Value of your Customer?

Do you understand your true costs for providing the service?

AT&T did a study: it costs $30 to handle a customer service call. Remember when Sprint fired the 1000+ customers in 2007? Because they were losing money. If a $100 customer calls in 3 times in a month, you made $10.

I know why many of you want low price: It's easier to sell. Especially without a sales team. But the fact is that if you aren't actively selling your service (and people are just finding you) price probably wasn't their main factor, so you actually gave money away.

I get there is price pressure, but you have to be realistic about your market. You aren't looking for thousands and thousands. Most of you are only invoicing about 2000 customers. That's it. You only need 2000.

When you were winning customers in the days of dial-up, you did it with a yellow page ad - because you offered something unique. Think about that. Something unique. Are you doing that today?

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