Selling VoIP: Features or Price? - Americas Network
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Selling VoIP: Features or Price?
America's Network Enews

Think of it as a positive form of bait and switch. Based on the evidence of a couple of surveys, it looks like the best way to sell VoIP telephony to consumers will be to attract them with cheap pricing, and then keep them by giving them more great features than they ever expected.

A study by Forrester Research found that 38% of consumers surveyed would be very or extremely willing to switch to VoIP service if it saved them a total of at least $15 per month on their local and long-distance service. If the savings reached $25, some 52% became willing to switch.

A study commissioned by VoIP infrastructure and services provider Level 3 Communications found something even more interesting: that while potential VoIP telephony users found a price discount of 25% most attractive, any discount over 25% turned them off. The most likely explanation, according to Cynthia Carpenter, marketing VP for voice services, is that prices that are too low raise concerns about quality.

Mixing that fact with some of the other survey results produces a variety of strategies for VoIP marketing success. For example, because customers are clearly concerned with reliability, they're more likely to buy from a name they know and trust than from someone they've never heard of. That's good news for cable providers, who could do well by offering both Internet access and VoIP telephony to customers who presumably already believe in them. And in fact, the Level 3 survey found that 73% of respondents would prefer to buy VoIP as part of a bundle, with broadband Internet and telephony the bundle they'd most like to see.

But even though saving money is the biggest current attraction of VoIP, interest in features is substantial. While nearly three-fourths of those who told Forrester they were interested in the service named price as the main reason, 39% also said they were interested in the additional capabilities. In the Level 3 survey, potential users found most attractive features those that allowed control and personalization, according to marketing VP Carpenter. These included things like call screening and alerts, and the ability to manage call lists via a computer interface.

The fact that consumers who have never had a chance to use such functions find them attractive once they know about them, illustrates that while VoIP telephony is currently a price game, in the end it's going to be things like convenience and flexibility that will keep users hooked. But it's also clear that the initial price discount is absolutely crucial. According to the Forrester survey, more than 60% of consumers are satisfied with their current phone service, and 50% feel it is reasonably priced.

With some of the most compelling consumer products in fields ranging from automobiles to electronics to fashion, buyers often don't realize how much they need something until they see it. But because the communications industry doesn't have showrooms and boutiques, VoIP customers won't be able to see the product's cool capabilities until after they've bought it. That means price will continue to be the best selling point until word of mouth and clever marketing combine to make VoIP the iPod of the phone business.

Source: America's Network Enews

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