7 Ways to Raise the Profitability of Your ISP
Simple Things You Can Do Today to Grow your Bottom Line
by Christopher M. Knight [May 18, 1999]
Create an add-on product that you can offer at the point of sale:
Many studies have demonstrated that at the moment the customer makes the "buy" decision, he or she has decided to trust you. At this moment, you can offer them additional services or products that may add value or benefit to their life or business.
Make your staff leaner by automating:
Some processes to think about automating: follow up/contact management reminders, sales autoresponders, easier automatic signup process, mail/merge for custom sales letters, database cleanup, etc. This does not always mean losing or firing folks, it means eliminating human labor on activities that can be automated.
Investigate the difference between being non-facilities based vs. facilities based for your ISP.
What would this mean to your profits this year? (Look for the beginning of a two-part article on the relative advantages and disadvantages of facilities-based versus non-facilities-based operations beginnig tomorrow on ISP Planet.)
Closely track the return on your marketing program.
Eliminate marketing activities that aren't producing a return; concentrate your investment in activities that are producing a better return. If you don't know which marketing activities are making your best return, the time to find out is now.
Follow up 30 to 60 days after each new member sign-up and invite the newcomer to buy additional or extended services.
You'll probably get a 70 to 80 percent turn-down rate, but looking on the positive side, this means that 20 to 30 percent will say yes to some additional business. The revenue improvement should be significant.
If you keep doing what you have always done over the next six months, where will you end your 1999 year, revenue wise?
What's the difference between this number and the target you've had for your ISP? What actions do you need to change today to create a different reality before 1999 is over? ISP-Insanity is doing the same thing over and over again, and expecting a different result. To get a different result in any business, you have to take different actions.
Try this mostly overlooked revenue opportunity:
If you're still sending invoices via snail mail, why not send out envelope-stuffers ads with your bills? Contact your business customers, and offer them the opportunity to add a 1/3 sheet coupon or stuffer in your monthly customer invoices for a fee. Some ISPs are making $ thousands a year off this hidden asset; so should you.
Adapt, Diversify, and Grow
The Internet is creating a huge new universe of commercial opportunity. ISPs with the imagination to step outside the accepted definition of Net access can grow forever.
by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [December 17, 1999]
Throughout my first three articles here, I have talked consistently about the need to think outside of the box, and to explore the coming wave of revenue opportunities and the supplemental revenue streams available to you through Value Added services. I now find myself thinking about comments I heard in New Orleans at ISPF [in November 1999]. Immediately following a presentation I gave on the importance of these opportunities, I found myself being asked if I thought it was really necessary to be diversifying outside of the dialup and leased line business. My answer was "only if you want to be earning a better living." I realize the importance of guarding your core business. I am not suggesting you abandon it, just to augment by adding new services a part of your core business.
Untapped potential
It amazes me how few people in this industry really see the potential and embrace the future with its myriad opportunities and challenges. When it comes right down to it, the Internet is almost everywhere now, and will be absolutely everywhere very soon. The implication of this for the ISP is that you will soon be people's link to the world. Some of us may joke about spending so much time online that we don't have a life, but very shortly, folks who aren't online will have lives decidedly less full of opportunity than those who are. Your ability to entrench yourself in their minds as the font from which their improved life flows can pay big dividends in the coming years.
There are a growing number of opportunities for ISPs to partner with "non-traditional" organizations to assist you in these endeavors. Let's look at a few.
Cash in on banking
Internet banking is a good example. Internet banking has exploded in recent months as the banking community realizes the dramatic savings they can realize by keeping their customers out of their branches and getting as many of them as possible to bank online. Partnering with local financial institutions to bundle a trial access package for all their new customers setting up an online banking or trading account is a sure-fire method for adding customers.
Dish up new revenue
Another example would be cooperative ventures with local restaurants. Virtually all shops have fax machines now. With recent improvements in Internet fax technology, there's a real opportunity for virtually all restaurants, regardless of size, to be taking lunch and supper orders via their website. This website?which you host, of course, and which you arranged for the design of for a small referral fee?interfaces with the email-to-fax software that you operate on behalf of multiple clients.
With this type of implementation, restaurants and fast-food establishments could take orders via the Internet with out needing to check their email every three minutes?and doing it all with a familiar technology they're already comfortable with.
As more and more offices bring access to every desktop, the convenience of ordering lunch for delivery, or supper for pick up on the way home, is sure to increase in popularity. With specials for your customers only?which most owners or managers will do in exchange for appropriate promotional consideration?the additional "value" that you can bring to your client base is obvious. Promotional packaging and/or discounted or trial offers for your services could all be included with the food leaving the restaurant, thereby increasing your new customer acquisition rate as well.
Something for nothing
The best way to increase your perceived value is to offer something that others value highly but which in fact costs you nothing. Many of you send out a regular message to your subscribers. (If you don't, here is yet another reason to do so.) You could easily add a small special-offer advertisement to the top, bottom, or middle of the message, offering them a special with select local merchants. The offers increase the value of the message while earning you a small but welcomed additional revenue. To take this a step farther, why not have the ad link to the advertising company's website?which, naturally, you host as a part of the package.
Tie the threads together
These are three relatively simple ways to integrate your service into the regular "offline" lives of your subscribers. Acclimating your subscribers to conducting as much of their affairs and shopping online as you can will go a long way to increasing their dependence on you and your services. As their spending online increases and your affiliate revenue streams grow, your subscriber base will not only increase in its immediate cash flow value to your company, but in the eyes of investors or acquisition suitors, your per-subscriber value will increase as well.
I sincerely hope that these four messages have been of as much value to you as they were to me to compose. I thank those of you who took the time to contact me, good, bad, and indifferent in your opinions and suggestions. They are all of value and welcomed. I look forward to hearing from you all, and will be sitting down soon to think on what to pen next. Any suggestions or requests you might have are always appreciated.
Ambush Strategies for Deploying New POPs
You're in expansion mode, planning to roll out POPs in areas where you've had no previous presence. Here's a POP-deployment marketing guide that will help you ambush your competitors and give you the greatest leverage in your new markets.
by Christopher M. Knight ISP-Planet Managing Editor [July 26, 1999]
Let's start with a question: When is a good time to begin planning the marketing campaign for your new POP deployment?
Well, the wrong time to be planning your marketing strategy is the week before?or worse, the week or month after?you launch. Some ISPs believe it's better to get into a market, get your server bugs worked out, and then introduce yourself, so you don't stumble. My philosophy, however, is that it's much more profitable to charge forward first and figure out the back end second. So, in my view, the right answer is months?probably at least a quarter?before you actually enter the market.
In warfare, "ambush"?hiding, waiting to attack an unsuspecting enemy?has a slightly dishonorable connotation. But in business (as in war) the element of surprise is a powerful advantage If you can keep your plans secret up until the day you introduce your new POP to the public, you can win as much as a 30 day cushion before your new local competitors can react and mount a counteroffensive to your marketing blitz.
And a marketing blitz is what you'll need to jump-start a market where customers may not have heard of your ISP before. A 'blitz' is when you pour it on hard and strong for a brief period of time, and then wrap back around for future blitzes or maintenance marketing.
Your goal is to impact target prospects 29 times during your blitz. This is a lot, but the guerilla marketing books tell us that, typically, a prospect must hear, see, feel, think about you?or be impacted in some way?at least 29 times before taking action and signing up with your ISP. Obviously this isn't an end-all rule: The point is you need a lot more marketing push than you think. If you can close your sales before 29 impressions, more power to your strategy and persuasiveness.
Here is a creative idea list for your marketing department. Try as many of these as you can:
Join the local chamber of commerce in the communities you'll be entering.
Get a list of the local media?newspapers, radio, tv, etc.?and make sure they are notified of your arrival via a press release.
Give something away to charity through a contest, or build a web site for two or three local nonprofit organizations that don't have one yet, then talk this up in your press release.
Send a promo postcard to every business in the new POP area just before launch, either offering the business a free trial (if you focus on the Business market) or offering their employees a discount program (if you focus on the Consumer market).
Enter a float in the local parade and distribute free signup disks and candy. (Don't laugh, as I've seen this unconventional strategy clean house in small communities.)
Contact local computer and PC service shops and offer them comp accounts for the first six months to introduce yourself, and engage them to see if they are happy with their current ISP relationship or if they are interested in earning $$$ for referrals.
Offer free 1-3 hour Internet seminars in the local libraries and promote them in the schools, colleges, and local newspapers. Give a month's free access to the first 60 that show up.
Buy a snail-mail list of everyone in your new POP area that has bought a PC in the last 6 months and send them something special in the mail, along with calling them if you can.
Are there any local talk radio shows that you could get yourself booked on? Call around and find out. Becoming the town expert on the radio is a great way to gain publicity?even if you do the show via telephone from another state.
Contact local media outlets and look for organizations that either don't have an ISP yet, or aren't satisfied with their current one. The object here is to barter access service for billboards, air time, or other valuable exposure, thus lowering your cash cost.
Make sure your website speaks to any new community in which you're opening a POP.
Notify your existing customers via an email, so that they can refer their friends who might live in the new POP coverage area to signup with you.
If you are a more aggressive ISP marketing guerilla, consider these ideas:
Tip: Send out a probe (code word for VP of business development) to your new POP area 45 to 60 days in advance, and seek to buy the smaller ISPs who are out of cash or ready for a clean exit. It's great fun to start up in a new POP community with hundreds or thousands of ready-made customers instead of having to grow it all organically.
Tip: Consider buying new subscribers. Hey, if your new subscribers are worth $100-$500, what is wrong with paying them up to $100 to join your service. The telcos do this all the time with the $5-$50 check they send out that converts your long distance if you negotiate it. $100 might be a bit extreme, but it sure would get my attention, and there's little question that it would cause a lot of people to switch to you. Not a bad investment whenyou're going to get at least $200+ from them annually.
Tip: Consider not putting your capital into POP costs; lease the POP instead. This allows you to pour more available capital into buying market share instead of infrastructure.
I'll leave you with a final rule of thumb: If you're a facilities-based ISP, and your POP costs you $25K to implement, make sure you can spend $25K in marketing also, or don't open the POP. I've seen a lot of ISPs get a POP opened up, with zero cash left to market their service, and you can guess which way the spiral runs . . . down. Another way to figure it: Budget $20 to $50 per new subscriber you want to attract. If it ends up costing you less than that, consider the difference a bonus.
Bagging Bigger Dialup Deals
Dialup subscriptions normally come in one at a time, but with proper preparation?and some salesmanship?you can make them happen in batches.
by Christopher M. Knight [September 7, 1999]
Today, let's take a step or two outside of "the box." and talk about strategies that will help your ISP attract multiple dialup sale orders?as opposed to the single orders that come in during the course of a typical day. Being able to sell dozens of accounts to one customer?or through one type of customer?not only reduces your cost of new-customer acquisition but can also increase your overall profits and return on investment as you scale up faster than before.
The first step is realizing that such orders are out there and that you don't necessarily have to wait for the phone to ring in order to acquire a pile of multiple dialup account orders. To win this kind of business, you have to be proactive and pursue it with a specialized focus and plan.
Action item
Many of the firms you are already selling to have dozens to hundreds or even thousands of employees. Design a multiple package deal for the employees of these businesses. Many of these folks also need Internet access and are a great semi-captive market for you to mine. This strategy will be even more powerful if you can get the CEO of the businesses to endorse your ISP, but this is only a kicker and not a requirement for a successful program. But don't get caught up in the details, put the program together?today.
Here are the 7 steps to get this type of sale going:
Design the package deals you're going to offer. Aim to make the perceived value of these packages in the neighborhood of 10 to 15 percent greater than what anyone off the street can buy from you.
List these deals on your website, and consider sending an email to your client base telling them about this new program or include a blurb about this in your next ISP newsletter to your members.
Do a snail mail direct marketing/direct response letter to all of your business clients, offering their employees this new special benefit because of their relationship with you as their Internet service vendor.
Have your ISP sales team follow up each of your business dialup clients, one by one, asking them if they received the direct offer and if they were interested?or at least what they thought of the idea.
Have your marketing chief develop a one page flyer on the top 12 benefits of participating in your new employee Internet access discount program and the to them. Send this via fax to your business clients. (At the bottom list a convenient way for people to contact you if they wish to be removed from your fax blast list. And be sure, of course, to honor any removal requests.)
Next month, while you are continuing to follow up with your business clients to convert their employees to this program, include the above 12 reasons flyer with your invoices to the businesses.
Offer to visit these businesses at their convenience (such as the next staff meeting, or after work) and conduct a brief, free Internet basics training course, full of tips that can make their life on the Internet more productive for their job. At the end, you can once again share with them the new program, pointing out that they can obtain Internet access (or your other services) at a discount.
Tip: If you are getting resistance?businesses not wanting to participate-you might try buying a list of their employees, which you can get from companies such as RL Polk, and sending a generic snail mail direct response offer which states that "if your employer uses [insert your ISP name], you may be entitled to a discount and some bonuses" if they signup for Internet access with you by a certain date.
Yes, this is aggressive marketing, but sometimes you have to be aggressive to win. And as long as you respect their privacy in the process, you will win.
Caution: Notice that no email spamming is mentioned in this suggested campaign. Make sure you convince any overzealous sales rep on your staff who finds a company email list directory and wants to approach them via email, that this is a very bad idea.
Expand the concept
After you have run this campaign with every one of your business clients, take it into new territory. Approach new organizations with dozens or hundreds of employees that haven't necessarily been your customers. Good candidates include local nonprofit and educational institutions?including all of the local schools. Teachers and faculty may appreciate the discounts or specialness of the offer.
Another variation is to package this kind of program with every dedicated Internet access account, so that you're actually offering it at the time of sale to a new business or educational client. They may not ask for it, but the worst they can say is no thanks or they'll think about it.
You may also wish to contact the local chambers of commerce in the local calling regions that you sell in, and offer to setup an "Association plan" whereby any chamber member gets a discount that is slightly better than you offer the public or comes with free training or something special that they can't get anywhere else or for the same price.
Final thought
Internal ISP promotion is just as important as external ISP promotion, which means that you should create an incentive plan internally with your people, to reward them with some value perceived token (cash or prizes or paid time off) along with public recognition as to who wins the award of selling the most dialup accounts this month, the most dialup accounts to any single account, and/or converts the most leads into paying subscribers.
Does Advertising Your ISP Really Work?
by Rachel Luxemburg [May 18, 1999]
Since this is my first column for ISP-Planet, I thought I'd start off with a challenge: taking on a topic that is far too broad to cover completely in just one column.
Many ISPs dismiss the notion of using traditional advertising methods to promote their company's services. "We tried [radio/TV/newspaper] and it didn't work for us" is a frequently heard response. Others, however, have been thrilled with the results they have gotten. What makes the difference?
There are clear, consistent reasons why these methods don't work for some ISPs. In a nutshell, they all boil down to three problems:
Insufficient budget
Bad targeting?wrong demographics, timing, or message
Bad tracking of results
If you can get these three things right, your chances of a successful advertising program will shoot up dramatically. Let's look at them one by one.
Problem 1: Insufficient Budget
Traditional advertising is expensive, especially TV. When I was starting up my ISP, even placing one ad in a free weekly newspaper would have run me several hundred dollars each week. (This was in high-priced New York City; it would probably be less expensive most other places.) Blowing an entire month's ad budget on running four prime-time TV commercials is not an effective use of your dollars either. Repetition and visibility are the keys.
Some ISPs have had success controlling costs by bartering bandwidth, web hosting, and e-mail for ads, especially with local radio stations. If you can negotiate a similar deal, by all means go for it. If you can't, then look carefully at what's available and what will give you the best bang for your bucks. Just like bandwidth, advertising space costs are a negotiable commodity.
Problem 2: Misguided ad campaign
No matter what the budget, any campaign can be a dud if it's not properly targeted. Know what type of customer you are trying to reach, and then find what will most effectively reach those customers. Every newspaper, magazine, TV and radio station will give you a media kit listing what kinds of people they reach and when. These kits are a tremendously valuable tool. After all, if you want to sell ISDN to business customers, you don't want to put the ad somewhere that targets families at home.
Be aware of differences between regions and even from town to town."I am convinced there is no 'standard' ad method that will work the same in all areas," reports Kevin Ingram of Access Online, Inc. "One place we were in, the local radio station was very popular and the local 'shopper' paper was not, so radio worked well. In others, radio was a total waste of money and print did well. The area we are in currently has an outstanding local free shopper publication that absolutely everyone reads, yet up the road ten miles, another small community has a paper that has proven totally useless."
Problem 3: Bad Tracking
So you spent the money to get a good number of ads out there and you picked the right vehicles for your target market. How do you know if the ads worked? Unless your ad contained a specific offer and/or your salespeople are very rigorous about asking 'How did you hear about us?' it is difficult to accurately track how many people see or hear any given ad.
It's certainly an achievable goal, however. "We do tracking to see where our leads are coming from, and every employee is trained to ask where a customer came from. Then we run reports every day, week, and month off our accounting program," says Rik Thomas, CTO of EZ Online Inc. in Delaware. "Radio is about 40 percent of our leads. It's our best source."
What's the Bottom Line?
In just about any kind of advertising you can think of, the bottom line is the same: If it works, keep doing it until it stops working, then try something new. If you don't know if it's working for you, find out. If you haven't tried it yet, do your homework and give it a shot. And if you can't afford the time or the money to run a good test, then rather than waste your money, do other forms of advertising until you can afford it.
ISP-Advertising: Pleasure or Pain?
Most human beings will do more to avoid pain than to gain pleasure. When creating advertising plans, programs, and campaigns, most ISPs ignore this principle.
by Christopher M. Knight [August 16, 1999]
It's true; most ISP advertising follows the conventional path?stressing the benefits of why someone should buy their service. This textbook approach is all very well, but it passes up a whole audience of willing buyers who just haven't had the right buttons of theirs touched yet.
Want proof? Ask yourself this question: What would you do more: try and protect, preserve, and defend $100,000 you already own, or try to earn an extra $100,000?
Most folks would say that they would work harder to protect their $100,000, because there is significantly more pain associated with the idea of losing $100,000 than the pleasure of the idea of having an extra $100,000 in the bank.
Most of your customers fit this profile. So what am I saying here? I'm not suggesting that you dump all of your positive, benefit-oriented ISP advertising campaigns, but merely that you add into your mix some headlines or programs that are fear-driven, that show how your ISP alleviates the pain of the Internet experience.
To get a feel for this principle in action, look at the following examples. Here are five nice, positive ad headlines, followed by five that are altered to weave a dark side into the message. How do you think the differences will affect ability to convert interested prospects into paying customers?
Pleasure-Benefit-Positioned Headlines
Our ISP Guarantees 100% Uptime for You & Your Business.
We have enough capacity to guarantee high availability for your Internet access needs.
Expert Internet access technical support available 24 hours a day.
Easy-to-use installation kit makes installation a breeze.
National coverage means you can dial us up locally in every major city.
Fear/Pain-Benefit-Positioned Headlines
When your business is down, you're losing money, which is why our ISP guarantees 100% uptime.
Tired of getting busy signals at your current ISP? Switch to our ISP, where we guarantee no busies or it's free.
Embarrassed when you're not able to understand what your ISP tech is telling you? Our friendly, courteous technicians will help you 24 hours a day, to resolve any issues you may have.
Computers are hard. Software rarely installs easily. Many times programs even mess up your computer, or worse, can lead to a systems failure, which will cause costly downtime. Our ISP software kit has been tested on 5 of the most popular platforms with an average installation time of under 2 minutes.
Tired of paying outrageous long distance phone bills to use your ISP when traveling? Our ISP offers local calling in every major city in the nation?which can save you a bundle!
Still skeptical? Take any of these and test them both ways. See which headlines or benefit propositions leads to a higher prospect-to-customer conversion ratio. Some experiences ad-folk hold that as much as 95 percent of an ad's effectiveness is in the headline, even when the body copy is the same.
ISP Drip Marketing
This is the marketing equivalent of the Tortoise and the Hare. High-powered bursts of media promotion can succeed in some circumstances, but slow and steady more often wins the race.
by Christopher M. Knight [September 13, 1999]
ISP Drip Marketing is the opposite of a marketing blitz: It's a slow, steady flow of marketing materials or advertising directed towards a specific market. The objective is to create a steady dynamic growth in your ISP sales revenue, rather than big bursts of growth separated by lengthy non-growth periods.
Many ISPs have dedicated marketing departments with significant resources, but still inconsistently deliver their sales message to the marketplace. When they gear up, it's always for a blitz, which produces a flood of incoming leads. Very often, the sales and customer service teams are swamped by this flood and can't service all the leads in a timely fashion. And because the marketing budget is drained, there are big gaps between ad campaigns?which slows growth, and gives churn a chance to overtake growth. This approach is not effective in capturing the highest return from your marketing investment.
The two primary premises of ISP Drip Marketing
Most of your target clients will buy Internet service eventually. The question then becomes how you can be the one to sell to them when they are ready to buy?
The "Law of 29," which states that a typical target client must hear?see, be told, think about, embrace?your marketing message a total of 29 times before they will make the transition from prospect to paying subscriber or customer.
Your goal then is to take actions which put messages of your benefits and service offerings in front of your total target client profile as many times as possible, in order to fish out the highest possible sales return.
Think in terms of releasing a progressive series of marketing impacts on your very narrowly defined market?which will allow your ISP sales force to respond quickly to nearly every new lead, without losing sight of your existing subscribers.
Tip: Drip marketing isn't just for acquiring new customers. Rather, you can also use this approach to help up-sell or cross-sell existing subscribers on your ISP's enhanced services.
ISP Drip Marketing, Step By Step
Here's a hypothetical drip marketing campaign, to give you a clearer sense of how this marketing approach might be implemented.
Scenario: You've entered a new market in a new city and have just launched an aggressive dialup marketing campaign to get your new POP off the ground. The objective of your drip campaign is to sell dedicated T1 or fractional T1 access to business clients in this new city. You don't have an existing base to up-sell, so you'll have to be more creative.
Quantify your goals
Based on your research, this market has a population of 25,000, with 1,200 qualified businesses that could benefit from your services. Selling to 12 of them (1 percent) over the next six months will provide you an annualized revenue of approximately $100,000. So, your goal is acquiring 12 new dedicated clients.
Set a realistic marketing budget
You decided that you'd like to acquire these 12 clients for no more than $1,000 apiece, which means the most you can spend to convert 1 percent of the 1,200 possible qualified clients, is $12,000.
Make an initial contact
Send a personalized letter to each of the 1,200 businesses, introducing yourself to them, and offering your services/solutions, in a direct response fashion, which invites them to call you for a free network or Internet access evaluation.
Follow up (the first of many)
Two weeks later, send a postcard that outlines the top 7 reasons why they should buy from you. Be positive and benefit oriented.
Follow up
Two weeks later, send a postcard that outlines one important reason they can't afford to wait any longer to check out your services. (This pokes at their pain, such as lost downtime, slow surfing, low employee productivity, network security, etc. For more on this, read ISP-Advertising: Pleasure or Pain?).
Identify highly qualified leads
By surfing every directory you can get your hands on, identify which of the 1,200 businesses already have Internet access, a website, a domain name, or anything that identifies them as potentially Internet savvy. For this example, let's say that you find 100 out of the 1,200 that meet this criterion.
Follow up
Send each of these 100 a $3+ United States Postal Service Priority Mail envelope, with a personalized letter inviting them to do business with you, 12 more reasons why they should buy from you, and a call to action.
Follow up
A week or two later, have your sales team call or stop in at each of the 100 highly qualified possibilities, to find out how your ISP can be of service to them or if they have any immediate needs or problems with their current provider.
Follow up
Every couple of months, send a fresh flyer to the entire list of 1,200 target potential clients stressing the most important benefits of your services.
Leverage new customers
As your ISP begins to grow in this new city, utilize your new dialup subscribers to refer their business friends to you, in exchange for a free month of service.
Follow up
Have one of your sales assistants call all 1,200 of these folks, identifying your ISP and offering to send them a free Internet Access Management report via fax, on how they can save money on Internet access costs or increase their Internet ROI.
Follow up
Do a fax blast to everyone who gave you permission to fax them more information, and repeat this every three weeks with a new fax of valuable information. (Be sure to respect their privacy: make it easy for them to opt out of your fax-based marketing campaign at any time.)
Follow up
Send a barrage of postcards to the 100 most qualified candidates?one every other day for 8 days in a row, with each one selling another key benefit or reason why they should choose you.
Continue this until you've either reached your goal?or you've set a higher goal. Every campaign will vary, along with the media vehicles that you use to reach your target market. Remember, the idea here is a consistent marketing approach spread over time. Persistence should be rewarded with an even flow of new customers.
Tip: The more media vehicles you "plant" and use simultaneously, the higher your chances to harvest a faster or greater sales reward. Don't be afraid to experiment with three or four different media vehicles simultaneously, such as personal letters, telemarketing, fax, email follow up, direct response post cards, overnight letters, or any form of direct response marketing piece.
Drip marketing applied to your existing subscriber base can also be extremely effective, because you'll be targeting people who already trust you.
You could, for example, aim to sell web design to every client who already owns a domain name that you host already?or up-sell semi-dedicated accounts to full dedicated accounts. In either case, do it by sending a series of letters, faxes, emails, calls, direct response pieces designed to educate, and lead the customer into calling you when they're ready to buy.
Keep going until
The kiss of death for ISP drip marketing campaigns is to interrupt them for a long period of time. When your target customers stop hearing from you regularly, they may conclude you are no longer in business or available. So, once you start, don't stop until you've achieved total market niche domination.
ISP Drip Marketing
This is the marketing equivalent of the Tortoise and the Hare. High-powered bursts of media promotion can succeed in some circumstances, but slow and steady more often wins the race.
by Christopher M. Knight [September 13, 1999]
ISP Drip Marketing is the opposite of a marketing blitz: It's a slow, steady flow of marketing materials or advertising directed towards a specific market. The objective is to create a steady dynamic growth in your ISP sales revenue, rather than big bursts of growth separated by lengthy non-growth periods.
Many ISPs have dedicated marketing departments with significant resources, but still inconsistently deliver their sales message to the marketplace. When they gear up, it's always for a blitz, which produces a flood of incoming leads. Very often, the sales and customer service teams are swamped by this flood and can't service all the leads in a timely fashion. And because the marketing budget is drained, there are big gaps between ad campaigns?which slows growth, and gives churn a chance to overtake growth. This approach is not effective in capturing the highest return from your marketing investment.
The two primary premises of ISP Drip Marketing
Most of your target clients will buy Internet service eventually. The question then becomes how you can be the one to sell to them when they are ready to buy?
The "Law of 29," which states that a typical target client must hear?see, be told, think about, embrace?your marketing message a total of 29 times before they will make the transition from prospect to paying subscriber or customer.
Your goal then is to take actions which put messages of your benefits and service offerings in front of your total target client profile as many times as possible, in order to fish out the highest possible sales return.
Think in terms of releasing a progressive series of marketing impacts on your very narrowly defined market?which will allow your ISP sales force to respond quickly to nearly every new lead, without losing sight of your existing subscribers.
Tip: Drip marketing isn't just for acquiring new customers. Rather, you can also use this approach to help up-sell or cross-sell existing subscribers on your ISP's enhanced services.
ISP Drip Marketing, Step By Step
Here's a hypothetical drip marketing campaign, to give you a clearer sense of how this marketing approach might be implemented.
Scenario: You've entered a new market in a new city and have just launched an aggressive dialup marketing campaign to get your new POP off the ground. The objective of your drip campaign is to sell dedicated T1 or fractional T1 access to business clients in this new city. You don't have an existing base to up-sell, so you'll have to be more creative.
Quantify your goals
Based on your research, this market has a population of 25,000, with 1,200 qualified businesses that could benefit from your services. Selling to 12 of them (1 percent) over the next six months will provide you an annualized revenue of approximately $100,000. So, your goal is acquiring 12 new dedicated clients.
Set a realistic marketing budget
You decided that you'd like to acquire these 12 clients for no more than $1,000 apiece, which means the most you can spend to convert 1 percent of the 1,200 possible qualified clients, is $12,000.
Make an initial contact
Send a personalized letter to each of the 1,200 businesses, introducing yourself to them, and offering your services/solutions, in a direct response fashion, which invites them to call you for a free network or Internet access evaluation.
Follow up (the first of many)
Two weeks later, send a postcard that outlines the top 7 reasons why they should buy from you. Be positive and benefit oriented.
Follow up
Two weeks later, send a postcard that outlines one important reason they can't afford to wait any longer to check out your services. (This pokes at their pain, such as lost downtime, slow surfing, low employee productivity, network security, etc. For more on this, read ISP-Advertising: Pleasure or Pain?).
Identify highly qualified leads
By surfing every directory you can get your hands on, identify which of the 1,200 businesses already have Internet access, a website, a domain name, or anything that identifies them as potentially Internet savvy. For this example, let's say that you find 100 out of the 1,200 that meet this criterion.
Follow up
Send each of these 100 a $3+ United States Postal Service Priority Mail envelope, with a personalized letter inviting them to do business with you, 12 more reasons why they should buy from you, and a call to action.
Follow up
A week or two later, have your sales team call or stop in at each of the 100 highly qualified possibilities, to find out how your ISP can be of service to them or if they have any immediate needs or problems with their current provider.
Follow up
Every couple of months, send a fresh flyer to the entire list of 1,200 target potential clients stressing the most important benefits of your services.
Leverage new customers
As your ISP begins to grow in this new city, utilize your new dialup subscribers to refer their business friends to you, in exchange for a free month of service.
Follow up
Have one of your sales assistants call all 1,200 of these folks, identifying your ISP and offering to send them a free Internet Access Management report via fax, on how they can save money on Internet access costs or increase their Internet ROI.
Follow up
Do a fax blast to everyone who gave you permission to fax them more information, and repeat this every three weeks with a new fax of valuable information. (Be sure to respect their privacy: make it easy for them to opt out of your fax-based marketing campaign at any time.)
Follow up
Send a barrage of postcards to the 100 most qualified candidates?one every other day for 8 days in a row, with each one selling another key benefit or reason why they should choose you.
Continue this until you've either reached your goal?or you've set a higher goal. Every campaign will vary, along with the media vehicles that you use to reach your target market. Remember, the idea here is a consistent marketing approach spread over time. Persistence should be rewarded with an even flow of new customers.
Tip: The more media vehicles you "plant" and use simultaneously, the higher your chances to harvest a faster or greater sales reward. Don't be afraid to experiment with three or four different media vehicles simultaneously, such as personal letters, telemarketing, fax, email follow up, direct response post cards, overnight letters, or any form of direct response marketing piece.
Drip marketing applied to your existing subscriber base can also be extremely effective, because you'll be targeting people who already trust you.
You could, for example, aim to sell web design to every client who already owns a domain name that you host already?or up-sell semi-dedicated accounts to full dedicated accounts. In either case, do it by sending a series of letters, faxes, emails, calls, direct response pieces designed to educate, and lead the customer into calling you when they're ready to buy.
Keep going until
The kiss of death for ISP drip marketing campaigns is to interrupt them for a long period of time. When your target customers stop hearing from you regularly, they may conclude you are no longer in business or available. So, once you start, don't stop until you've achieved total market niche domination.
Making Banner Ads Work for You
As an ISP, you probably own some prime advertising real estate. Are you putting it to full use?
by Jason Zigmont HowToSell.net [October 11, 1999]
For an ISP, there are two sides to banner advertising. Buying and selling. This week we will take a brief look at banner ads, how you can make money off of them, and how you can get new users through them.
Packaging codes
While many methods of packaging banner ads have been designed, the two most popular are CPM (Cost Per Thousand impressions) and CPC (Cost Per Click-through). If you are selling advertising, most often you want to sell CPMs, whereas if you're buying ads you're best off paying CPCs.
As an ISP, you have multiple places you can display banner ads. If you set up your users with your homepage as the default start-up page, you will inevitably end up with a decent number of impressions. Within your homepage, you can put multiple web banners such as 468 x 60 banners at the top and bottom and 125 x125 banners on the side. If you offer web-based mail, you can place banners on each message to defray the cost of providing that service.
The goal is simple: to provide occupation for eyeballs that would otherwise be idle?without being obtrusive or obnoxious. NetZero has gone the next mile and is using banner ads to completely cover the cost of Internet access.
Inside or outside?
So now that you have placed the banner ads on your web site and web mail, what can you do with them? You can use them for your own internal promotion, you can sell them direct to an advertiser, or you can sell the space to an ad network (or multiple networks) and let them sell and serve the ads.
If you decide to handle ads in house, you will have to take on the task of ad management and sales. A benefit of this route, however, is that you can target ads towards your users and sell the banners to local companies that may receive a higher click-through ratio. Also, you can use any unsold inventory for affiliate programs and to promote your own services.
If you go with an outside agency, in most cases they will sell your banner ads in a run of the network rotation at a rate of $3 to $7 CPM. The agencies will also take a portion of the ad revenue ranging from 15 to 40 percent. In most cases, agencies also require a certain minimum number of impressions, but in return they do all the work.
Online ad agencies include:
Adsmart Network
DoubleClick
Flycast Network
Regardless of which method you use to sell the ads, the more demographic information and targeting you have, the better rate you will get. For example, NetZero gets $10 additional CPM for each demographic. While you may not get an additional $10, if your viewership represents a specific demographic?such as filtered access or affinity programs?you can expect a significantly higher CPM.
Tips for buying advertising
Buy CPC wherever possible.
Target ads towards your demographic
Ask for full audited reporting
Track your results
In the end, the key to both buying and selling banner advertising is the numbers never lie.
Making Banner Ads Work for You
As an ISP, you probably own some prime advertising real estate. Are you putting it to full use?
by Jason Zigmont HowToSell.net [October 11, 1999]
For an ISP, there are two sides to banner advertising. Buying and selling. This week we will take a brief look at banner ads, how you can make money off of them, and how you can get new users through them.
Packaging codes
While many methods of packaging banner ads have been designed, the two most popular are CPM (Cost Per Thousand impressions) and CPC (Cost Per Click-through). If you are selling advertising, most often you want to sell CPMs, whereas if you're buying ads you're best off paying CPCs.
As an ISP, you have multiple places you can display banner ads. If you set up your users with your homepage as the default start-up page, you will inevitably end up with a decent number of impressions. Within your homepage, you can put multiple web banners such as 468 x 60 banners at the top and bottom and 125 x125 banners on the side. If you offer web-based mail, you can place banners on each message to defray the cost of providing that service.
The goal is simple: to provide occupation for eyeballs that would otherwise be idle?without being obtrusive or obnoxious. NetZero has gone the next mile and is using banner ads to completely cover the cost of Internet access.
Inside or outside?
So now that you have placed the banner ads on your web site and web mail, what can you do with them? You can use them for your own internal promotion, you can sell them direct to an advertiser, or you can sell the space to an ad network (or multiple networks) and let them sell and serve the ads.
If you decide to handle ads in house, you will have to take on the task of ad management and sales. A benefit of this route, however, is that you can target ads towards your users and sell the banners to local companies that may receive a higher click-through ratio. Also, you can use any unsold inventory for affiliate programs and to promote your own services.
If you go with an outside agency, in most cases they will sell your banner ads in a run of the network rotation at a rate of $3 to $7 CPM. The agencies will also take a portion of the ad revenue ranging from 15 to 40 percent. In most cases, agencies also require a certain minimum number of impressions, but in return they do all the work.
Online ad agencies include:
Adsmart Network
DoubleClick
Flycast Network
Regardless of which method you use to sell the ads, the more demographic information and targeting you have, the better rate you will get. For example, NetZero gets $10 additional CPM for each demographic. While you may not get an additional $10, if your viewership represents a specific demographic?such as filtered access or affinity programs?you can expect a significantly higher CPM.
Tips for buying advertising
Buy CPC wherever possible.
Target ads towards your demographic
Ask for full audited reporting
Track your results
In the end, the key to both buying and selling banner advertising is the numbers never lie.
Multi-Level Marketing
A direct sales organization is a viable way to sell Internet service?under the right circumstances?but it's not a path to be undertaken lightly.
by Jason Zigmont HowToSell.net [November 19, 1999]
Last January, AOL took the plunge into direct marketing?or multi-level marketing (MLM) as it is also known. [Click here to read all about it.]
In adding a MLM side, AOL gained access to thousands of sales people whose job will be to interact directly with the mass of potential end users who currently do not have Internet access. However, adding a direct marketing arm also carries along the negative connotations many people have with MLMs.
Location is everything
Although I'm not particularly an MLM advocate, I did have the opportunity of receiving an in-depth look into direct marketing while training the technical and sales staff of what would have been the Internet's first MLM, in Idaho Falls, Idaho. The first thing I learned was that direct marketing's acceptance varies widely depending on your location: For example, the mid-western U.S. is much more accepting then the East Coast.
In Idaho, most residents participate in a MLM company at some time in their life, and therefore they understand both the pleasure and the pain of being a direct marketer. When Idahoans are approached by direct marketers, then, they are likely to listen. In contrast, residents of the eastern U.S. have been burnt by 'pyramid schemes', and therefore consider all MLM companies to be underhanded, and crooked.
Regardless of your personal feelings about direct marketing, it's an undeniable fact many millionaires have been created by direct marketing organizations? Amway, for example. Amway states that the average direct marketer makes $56,500 per year. MLMs have made people money. Unfortunately, MLM's evil brother, the pyramid scheme, has tarnished the image of legitimate direct marketing by bilking ordinary people out of a lot of money.
Sales org with a difference
The structure of a true MLM company is really not very different from that of a a corporate sales department. With a VP of sales, several sales managers, and large contingent of salespeople, you basically have the same resources as an MLM's downline. The salespeople are the ones dialing for dollars and making the sales; they are paid a commission on each sale. The sales manager is responsible for a group of sales people, and typically receives a salary and a percentage of total sales of that group. The VP then manages the sales managers and receives compensation (be it salary, commission, bonus, stock, etc.) for the production of the sales managers and the salespeople.
In an MLM setup, the structure is the same but thet titles differ. As with a standard company, the people at the top three levels are the ones who make the most money. People below them make money, but have to work just as hard for it as a 'normal' salesperson. Perhaps the key difference is that in an MLM organization, there are ways for the bottom-rung salesperson to 'move up the ladder,' building a sales team below them and essentially graduating into what could be considered a sales manager position.
For better or worse, it is practically impossible for an ISP to add a MLM division without outside help. The business and billing systems have to be huge to be effective; just dealing with the tax laws is a major undertaking. If you are interested in investigating direct marketing, proceed with caution?and enlist the help of an established MLM organization.
The dark side
Unfortunately for the MLM industry, many direct marketing companies are positioned as 'get rich quick' schemes, crossing the thin line between a true MLM company and a pyramid scheme. When you cross that line, you loose everything you have worked for?your reputation, and even the trust of your employees and customers.
Get rich quick schemes are seductive, it's true. The allure of not having to work as hard as we do on a daily basis is hard to resist. To keep these issues in perspective, I look at a poster sent to me by Harvey Mackay that hangs on my office wall as a daily reminder. Its message is simple, yet one so many people forget:
Press on.
Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education alone will not; The world is full of educated derelicts. Persistence and determination alone are omnipotent.
New Revenue from Old Customers
After tapping the Internet newbie market and diverting a stream of your competitors' subscribers into your pond, your next road to growth is upping your average ticket price.
by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [November 12, 1999]
With your subscriber-acquisition rate soaring due to your flawless execution of marketing and sales programs to capture both the new user market and to drive your competitors' churn through the roof, it's time to address the issue of how to grow your revenues from within. It's easier to make a new customer out of an old customer than it is to go find yourself a new one. This adage has held true through generations and across innumerable industries and operations. The Internet is no different.
One of the dangers you must always be aware of is wandering so far from your core business (and revenues) that you lose sight of them. Relying on your business plan to guide your core activities will help keep you on track, but a close eye on the books will keep you keenly focussed on it as well. With this in mind, lets look at my favorite sources for additional and incremental revenues.
Affiliate programs
Given my day job, I'd be remiss if I didn't start with affiliate programs. I believe that if your customers are going to spend their money on the Internet, you should earn a commission or referral fee for some part of that transaction, if you can. If they're going to buy it anyway, they might as well buy it from or through you.
Ranging from the Amazon-like affiliate programs, where the revenue stream is easily identified, tracked, or otherwise monitored, to some of the less straightforward programs, where earnings or savings are somewhat less predictable or quantified, all affiliate programs have merit.
Since you are supposed to know everything about the Internet, your customers will attach a higher value to the services and retailers that you endorse. Consequently, you must be sure to do proper research on any companies that you wish to partner with. There's nothing wrong with having multiple affiliate programs. Even having some that are overlapping is not a bad thing. But blindly adding a page full of links and images for every affiliate program you can find is not the answer.
A link to every online toy store just in time for the holidays is not a good thing if half of them can't handle their traffic and don't fill your customers' orders. These problems would of course be your fault in your customers' eyes. This was a problem with some of the online stores last holiday season. I suspect that history is unlikely to repeat itself with the larger retail operations this year, but be mindful of the prospective risks and perceived liabilities.
Stretching existing services
Perhaps the easiest and most natural first deployment of additional revenue generating services is to focus on expanding your current core business. Additional service offerings might include multiple email accounts, a Web mail option, or national and international roaming accounts. All are sources of incremental revenue increases?in addition to being valued services.
Marketing additional Web space for those customers who just want to put together a large and image-intensive site is pretty easily done, and I suspect that most of you are already doing something along these lines. But how many of you are offering multiple smaller hosting spaces instead of the traditional single x-Mbyte Web space allotment? Combined with multiple email accounts?for a small additional fee of course?each member of the family could not only have their own email address but could also have there own Web site. That is an excellent additional service to offer your "family" accounts.
On top of these generic Web-space options and upgrades you can add and promote your domain-name registration and Web-design services. Keep in mind that almost all your consumer subscribers also have a day job. Following the statistics for North America at least, 80 percent of them work for a small business. Given that information, it's not unreasonable to assume that a good proportion of them will have at least the opportunity to make recommendations for providers and hosting solutions. If you don't handle your own Web design-don't have the infrastructure to handle these requests or the desire to expand to include it?outsource it for a referral fee or commission. This gets back to the simple philosophy that if your customers are going to spend money on it anyway, you might as well try to get some of it to stick to you.
Seminars
Seminars are perhaps the least utilized revenue boosting technique, but it works both for attracting new customers and for keeping your existing customers happy. Even less utilized is the opportunity to transition your more adept and technologically inclined clientele through a series of paid seminars to teach them advanced HTML and Web design?or even networking technologies.
Taught in the same facilities as your introductory seminars, these classes can range from a couple hour introductory html lessons on a Tuesday night, to full-day and multi-day in depth advanced Web design and authoring tutorials. I have seen some ISPs put these seminars on themselves; others have partnered with local technology training or teaching companies. Either way, the value both to your organization and to your customers is the same. They get the information and education they want and you get the revenue?plus the added benefit of having better educated customers that are less likely to cause problems that you will ultimately be called on to fix.
Auctions
It has become pretty apparent that online auctions are here to stay. I know this for certain because even my girlfriend has discovered eBay?despite my best efforts to divert her attention from it. (To be fair, she has bought me some pretty nice stuff that way.) So far we've had no problems with deliveries, but others have. My preference would be to deal in a more closed system-ideally, one hosted and monitored by my provider. With a closed system the threat of fraud is greatly reduced because my provider has all of the relevant contact information for all of its customers and can quickly intervene in the event that someone tries to defraud me. Though this would place an added burden of responsibility on my provider, it would be minimal at best if properly explained up front in a complete and detailed Acceptable Use Policy (AUP) or Terms Of Service (TOS).
I have spoken about this to a number of providers and have met with different responses. At ISPF II in San Diego earlier this year I mentioned this during a presentation I did, and after a number of "dissenting opinions" we heard from the owner of an ISP who had actually implemented it five days earlier. He had chosen to restrict the access to only his customers (as I happen to have recommended) and his auction site already had 800 visitors. Not bad for a 1,000 subscriber ISP! At a $1 per item-listing fee, the income might not be enough to retire on, but it could certainly make a quick and positive contribution to your bottom line. That after all is what we are after.
New Revenue from Old Customers
After tapping the Internet newbie market and diverting a stream of your competitors' subscribers into your pond, your next road to growth is upping your average ticket price.
by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [November 12, 1999]
With your subscriber-acquisition rate soaring due to your flawless execution of marketing and sales programs to capture both the new user market and to drive your competitors' churn through the roof, it's time to address the issue of how to grow your revenues from within. It's easier to make a new customer out of an old customer than it is to go find yourself a new one. This adage has held true through generations and across innumerable industries and operations. The Internet is no different.
One of the dangers you must always be aware of is wandering so far from your core business (and revenues) that you lose sight of them. Relying on your business plan to guide your core activities will help keep you on track, but a close eye on the books will keep you keenly focussed on it as well. With this in mind, lets look at my favorite sources for additional and incremental revenues.
Affiliate programs
Given my day job, I'd be remiss if I didn't start with affiliate programs. I believe that if your customers are going to spend their money on the Internet, you should earn a commission or referral fee for some part of that transaction, if you can. If they're going to buy it anyway, they might as well buy it from or through you.
Ranging from the Amazon-like affiliate programs, where the revenue stream is easily identified, tracked, or otherwise monitored, to some of the less straightforward programs, where earnings or savings are somewhat less predictable or quantified, all affiliate programs have merit.
Since you are supposed to know everything about the Internet, your customers will attach a higher value to the services and retailers that you endorse. Consequently, you must be sure to do proper research on any companies that you wish to partner with. There's nothing wrong with having multiple affiliate programs. Even having some that are overlapping is not a bad thing. But blindly adding a page full of links and images for every affiliate program you can find is not the answer.
A link to every online toy store just in time for the holidays is not a good thing if half of them can't handle their traffic and don't fill your customers' orders. These problems would of course be your fault in your customers' eyes. This was a problem with some of the online stores last holiday season. I suspect that history is unlikely to repeat itself with the larger retail operations this year, but be mindful of the prospective risks and perceived liabilities.
Stretching existing services
Perhaps the easiest and most natural first deployment of additional revenue generating services is to focus on expanding your current core business. Additional service offerings might include multiple email accounts, a Web mail option, or national and international roaming accounts. All are sources of incremental revenue increases?in addition to being valued services.
Marketing additional Web space for those customers who just want to put together a large and image-intensive site is pretty easily done, and I suspect that most of you are already doing something along these lines. But how many of you are offering multiple smaller hosting spaces instead of the traditional single x-Mbyte Web space allotment? Combined with multiple email accounts?for a small additional fee of course?each member of the family could not only have their own email address but could also have there own Web site. That is an excellent additional service to offer your "family" accounts.
On top of these generic Web-space options and upgrades you can add and promote your domain-name registration and Web-design services. Keep in mind that almost all your consumer subscribers also have a day job. Following the statistics for North America at least, 80 percent of them work for a small business. Given that information, it's not unreasonable to assume that a good proportion of them will have at least the opportunity to make recommendations for providers and hosting solutions. If you don't handle your own Web design-don't have the infrastructure to handle these requests or the desire to expand to include it?outsource it for a referral fee or commission. This gets back to the simple philosophy that if your customers are going to spend money on it anyway, you might as well try to get some of it to stick to you.
Seminars
Seminars are perhaps the least utilized revenue boosting technique, but it works both for attracting new customers and for keeping your existing customers happy. Even less utilized is the opportunity to transition your more adept and technologically inclined clientele through a series of paid seminars to teach them advanced HTML and Web design?or even networking technologies.
Taught in the same facilities as your introductory seminars, these classes can range from a couple hour introductory html lessons on a Tuesday night, to full-day and multi-day in depth advanced Web design and authoring tutorials. I have seen some ISPs put these seminars on themselves; others have partnered with local technology training or teaching companies. Either way, the value both to your organization and to your customers is the same. They get the information and education they want and you get the revenue?plus the added benefit of having better educated customers that are less likely to cause problems that you will ultimately be called on to fix.
Auctions
It has become pretty apparent that online auctions are here to stay. I know this for certain because even my girlfriend has discovered eBay?despite my best efforts to divert her attention from it. (To be fair, she has bought me some pretty nice stuff that way.) So far we've had no problems with deliveries, but others have. My preference would be to deal in a more closed system-ideally, one hosted and monitored by my provider. With a closed system the threat of fraud is greatly reduced because my provider has all of the relevant contact information for all of its customers and can quickly intervene in the event that someone tries to defraud me. Though this would place an added burden of responsibility on my provider, it would be minimal at best if properly explained up front in a complete and detailed Acceptable Use Policy (AUP) or Terms Of Service (TOS).
I have spoken about this to a number of providers and have met with different responses. At ISPF II in San Diego earlier this year I mentioned this during a presentation I did, and after a number of "dissenting opinions" we heard from the owner of an ISP who had actually implemented it five days earlier. He had chosen to restrict the access to only his customers (as I happen to have recommended) and his auction site already had 800 visitors. Not bad for a 1,000 subscriber ISP! At a $1 per item-listing fee, the income might not be enough to retire on, but it could certainly make a quick and positive contribution to your bottom line. That after all is what we are after.
Special Offers: Tracking Results
'Specials' can be a powerful marketing tool, but in the ISP business, unless you manage them carefully, they can get you into trouble.
by Jason Zigmont HowToSell.net [June 11, 1999]
'Ray . . . Kmart Sucks.'
?Tom Cruise to Dustin Hoffman in Rain Man
Specials are a time-honored tool for building businesses and are often used by ISPs. The idea is simple: Make it easy for people to try your service, find out how great it is, and become permanent customers.
There are three essential components to a successful special offer:
The hook: special pricing or other offer to entice the prospective customer to your service
The expiration date: the action item that induces customers to sign up
The tracking number: essential to determining the effectiveness of an offer
The hook
Free-first-month specials are very popular in the Internet industry, but they have one potential built-in problem. If you are offering free months and takng sign-ups on line, you lay yourself wide open to spammers and other abusive users. Realistically, you probably won't have huge numbers of abusers, but you need to be vigilantly proactive in your monitoring of these sign-ups. Be sure to get full contact information from each user before you activate the account.
Tip: Consider offering a reduced price for the first month of service. A token fee, such as $1.99, is still a good hook, will discourage at least some spammers, and has the benefit of actually creating a billing cycle for the customer, thus verifying their billing information a month sooner than you would otherwise.
Target your specials
If you're looking to attract AOL users, for example, you could place an 'AOL refugees wanted' ad, with a special price for users who switch from AOL. AOL has a bring-your-own-provider program for $9.99/month which consists of an AOL user using your ISP to connect to AOL. If you offer AOL users a deal for $20 for the first two months of access, then they can use AOL's bring-your-own-provider program and your service for two months. The goal is to make the users realize the difference between you and AOL without having to completely cut the umbilical cord to AOL. Make it easy for them to switch. Put instructions on switching on your web page. (See http://www.howtosell.net/html/aol.html)
Expiration date
The expiration date is the 'act now' part of the special. It entices people to sign up and motivates them to take action. This is crucial, because human beings tend to wait to act. Sometimes indefinitely. And, of course, while they're waiting, your competitor may come up with a better special and steal your potential away from you.
Tracking numbers
If you can't track the results of your special offer campaign, you have no way of knowing how successful it was?and, by extension, whether you should repeat it in the future. So a system for results tracking is essential. To do this topic full justice, we'll discuss it in next week's column.
Special Offers: Tracking Results
You can market your services from dawn to dusk, but if you don't track your results, you might as well just throw your money away.
by Jason Zigmont HowToSell.net [July 23, 1999]
When they finally start to meticulously track the results of their marketing efforts, many ISPs are truly surprised that activities that they thought were boosting the bottom line aren't worth the money.
Every incoming call to your ISP must be tracked. You need to train all of your staff to ask anyone who calls?whether to sign up or just asking for information?where they heard about you. This information should then be inputted into your billing system. (Your billing system does have at least one field for marketing information, right?)
IDs, please
Every advertising campaign and special introductory offer needs some sort of tracking identification. It can be a number (this is typical of direct mail campaigns), a keyword, or something a bit less formal. For example, 'Reference the bluebird special' or 'Tell them John from WYYZ sent you', etc.
When your employees answer the telephone, they need to know how to extract accurate information from your perspective customers. The most common response is 'word of mouth.' In fact, most callers have actually heard or seen ads that steered them to your service. Or it may have been a combination of a friend mentioning your service and bumping into your ad.
Analyze what you collect
Once you've begun to systematically collect tracking data, you should analyze the information on a weekly, monthly, quarterly, and yearly basis. You will begin to see trends, both seasonal and regional. One area may be more responsive to the newspaper and direct mails, and another may react only to radio.
Now that you know what works and what doesn't, you can adjust your marketing plan so that you're spending your money only where it counts, and lowering your overall customer acquisition costs.
The Power of Press Releases
They're produced (and thrown away) by the millions, but as low-tech and commonplace as they are, press releases can do the basic job of getting your ISP known in the community.
by Jason Zigmont HowToSell.net [September 24, 1999]
Time and time again I'm asked "How can I do effective marketing on a shoestring budget?" If we all had a cash cow tethered somewhere, we could have fun sending people free coasters (that is what you use your AOL CDs for, right?), but we need to be realistic.
For many ISPs, the marketing budget consists of whatever money is left over at the end of the month, and every penny of it must be spent wisely. (This, by the way, is not the way I'd recommend you determine your marketing budget, but that's a subject for a different discussion.)
Put that shoestring to work
So, assuming that your marketing budget is of a magnitude roughly equal to the change collected from under your car seats, what do you do first?
Send out a press release. No, not about how broke you are, but about something new or special about your company. Did you . . .
Just open a new pop?
Recently reach a milestone in number of customers?
Hire someone who is well known in the community?
Make a donation of time or service to a local charity?
Press releases are probably the cheapest single source of publicity, but they are overlooked by many ISPs. The basic rules are simple:
Have a catchy headline?IN ALL CAPITAL LETTERS
Be sure to include some information that has a reasonable chance of interesting the editor
Include your contact information
Mail or hand deliver it to the appropriate people at your local publications
E-mails are too easily deleted, and faxes are typically dumped without inspection. But hard copy?if hand delivered or mailed in a neat, respectable looking format?has a better chance of being read.
Expectations & techniques
Press releases will not always be picked up, and if picked up will often appear in fragmentary form?perhaps no more than a headline and a couple of sentences. The reason? Press releases are a convenience for editors: They fill empty space and are usually cut to fit that space?drastically if necessary.
Tip: Anatomy of a Press Release
Put your most important information, concisely written, at the beginning of your release. Editors tend to start cutting at the bottom, shortening as much as they need to to make the piece fit. You can become more expansive as you get past the first paragraph or two. But don't make the mistake of making releases longer than they need to be to tell your story. Keep it short and simple.
Strategies
If you get in the habit of sending releases frequently, you and your company will gradually become familiar to local editors. Then, when you finally do something truly newsworthy, you're more likely to get coverage.
When contacting the press, you should start with your local weekly paper, as it is most likely to publish your release. Regional papers often need to fill space, and your press releases may work for them as well. It's touch to get a release printed in a statewide or national newspaper or magazine, and TV is even harder, unless it is something truly newsworthy?or you know someone.
Insurance policy?
This brings me to point about the press on which good old Harvey Mackay and I agree: Friends in the press are worth their weight in gold. Going out of your way to gain friends in the press is smart business?even going as far as to 'bribe' them with free services.
Such friends can help you out?not only in getting press releases into print, but also when you are truly in a jam. For example, what happens when your competitor prints something slanderous about your company? Your press buddies may not stop the presses, but they will at least help you to get your opposing viewpoint out, and possibly save you a lot of headaches.
Wresting Customers from the Competition
Growing the value of your company means growing your customer base?both by attracting Internet newbies, and by "upgrading" users from other providers.
by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [October 21, 1999]
So, now that you've started your preparations for your next wave of new-to-the-Internet customers [see Part 1 of this series], you should be ready to spend some focus on taking away some of your competition's clientele. Marketing to the existing subscriber bases of your largest local competitors is much easier than you think, but is likely not something you are doing well right now?if at all. You need to change this, sooner rather than later.
Do I hear you muttering complaints about unethical business practices? Are you thinking "There's plenty of business to go around; there's no need for me to be stealing someone else's livelihood"? Well, if you think for one moment that the larger players in this game would hesitate a heartbeat before putting you out of business, think again. The folks in your competitors' marketing departments are out to eat your lunch whenever they get the chance. So, why should you allow them a luxury they'd never allow you? The answer is, don't. The issue is where to start.
Stealing a march
Start where they do, on your own homepage. Since I am not one of your customers, if I were to visit your homepage, what would I see? What I should be seeing is exactly what you would choose to display to a prospective client.
In other words, "outside" visitors should encounter not your normal homepage, but rather a comparative analysis of why your service is superior or a better value. Something as simple as a table comparing your package options versus theirs with some selectively chosen marketing copy will suffice. You need not concern yourself with selling them on the Internet (because the are already connected); you simply need to point out why connections through your company are better.
These points of differentiation can include speed issues, products like WebMail, or other services, such as multiple email accounts, additional webspace, multiple smaller webspaces for family accounts, or maybe certain software collections. Be sure to include whatever options you offer.
If you've been in business for a reasonable length of time, brag about it a little. On the other hand, if you are just getting started, you have developed your business to fulfill a defined need in the community, employing the latest technologies and hardware to provide premium service for your valued customers. (Right?) Regardless of the spin, your message of quality is the same.
Going toe to toe
If you want to get highly specific in your messages, you can redirect customers from certain competitors to sites specifically designed to show them why you are better than the provider they are with now. At the very least, targeting specific messages to AOL customers is probably a good move. Many AOL users seem to believe that the only way to get email and use AOL Instant Messenger is to be an AOL customer. Many even seem to be under the impression that AOL is the Internet and other people just link to AOL.(I'll never forget the first time I heard that one.) It's important to point out to them that they will have access to AOL-IM and email?and virtually everything else the Internet has to offer, including search engines?from your service. As simplistic as that may sound, you'll be surprised at the response. You might want to prepare your Technical Support and Sales departments by having them check out Jason Zigmont's article Switching users from AOL (http://www.howtosell.net/html/aol.html) .
Draw them into the fold
While trying to sell them right up front will catch their attention, ultimately they'll want to see your homepage before making that final move. So, be sure to provide a handy link past the pitch to a version of your real homepage. This gives them a taste of what they'll see when they become customers; it also lets you easily track how many visitors you are getting from other ISPs. Before undertaking any of this you will need to put a couple of other pieces in place first.
Your homepage is who you are; it's your "face" to those who don't know you. Even though your organization may be extremely well organized and diligent in its operations, one broken link on your homepage and your image becomes one of "sloppy" or "no attention to detail." There are key components to a good homepage that have been well documented. Jason Zigmont's The ISP Web Site as Marketing Asset provides more information.
Nail 'em down
Once you've got them interested in you, how do they sign up? Do they need to disconnect and then call you, or can they make the decision, pay, and get changed over to your service in real time? If you said the former, start looking into the latter. Once you have their interest and they're willing to consider the fateful move, the last thing you want to do is put barriers in their way. Regardless of whether you build it yourself or use one of the web interfaces provided by your billing software vendor, online sign-up is something that I firmly believe that every ISP should be doing now. (Actually it is something that I firmly believe that you should have been doing from day one.)
With these simple pieces in place, any of the other marketing materials, advertising copy, or online sponsorship messages that includes your URL will start to become more effective. When all of the outside visitors to your site start seeing why you offer better of service or a less expensive option and can go and immediately sign up to your service, the dream of immediate monetary return on your advertising dollars takes a few steps toward becoming reality.
Starting Up, or Improving, a Webhosting Service
Here are the basic options you need to mull over as you grow your webhosting business.
by Vince Barnes [November 16, 2000]
Space and time
Fundamental to the whole process of webhosting is the server space your sites will occupy. You have a number of alternatives for providing that space, each with its own advantages and disadvantages. Some provide more space for less money; some provide savings in setup and administration time.
For the of you who are building large webhosting businesses, there is little alternative but to have a server farm that you control exclusively. However, you still need to determine whether it is better to operate your own data center or to outsource it and focus on the service side of webhosting.
It's easy to think that if you want to host some web sites, you should first get one or more servers, hook them up to the net, and then jump into marketing and customer service.
Anybody who's tried it, though, knows there's more to consider. Some must consider capital costs versus operating expense?do you buy, lease, or rent? There are support considerations for different operating systems. There is the matter of Internet access reliability and redundancy, and, of course, various considerations concerning bandwidth.
Then there's security, both from the perspective of physical access to the equipment and data files and from the perspective of data safety and protection from loss in the event of hardware failure or other hazards. Exactly where to create the server space you will sell is a very important decision. You must also consider the time it takes to get to market and the ongoing management of the systems.
My place or yours
Keeping your servers in your own place does have some distinct advantages. With physical access to the equipment, you have total control, though with today's remote control software you can get a pretty good approximation! Servers are pretty small, so the real estate they occupy in your offices may not be very expensive compared to the rental space for racks in a data center.
Do keep in mind, however, that a data center provides electricity and air conditioning. This might make a difference depending on where you are. Here in Florida, I have the A/C running 24/7 in my computer room. It may be different in Fiji or Norway!
Then there's the question of bandwidth. If you already have Internet connectivity at your location and have plenty of bandwidth available, you may want to keep your servers at home to use up some of your excess. Be careful! It's easy to run out of bandwidth when hosting web sites, and you don't want to degrade your other services.
It is more or less assumed that if you are seriously considering webhosting, you already have redundant connections. The biggest drawback to keeping your servers at your own place, however, is the question of safety and security.
Do you have the standby generators necessary to hold your systems up in the event of a local power outage? Do you have adequate security to prevent unauthorized access to servers and the data they hold?
Remember that some of your clients may be capturing credit information or even medical or other sensitive information. You must exercise due diligence to protect it. Any data center worth its salt probably has power and security, and pretty good fire protection, too. Are you depending on the local fire department?
Location, location, location
The old maxim from the world of real estate applies to hosting servers also. To get the snappy response that clients crave, you will want to locate your servers as close to a solid, high performance Network Access Point (NAP) as possible. It doesn't matter how big or small you are, performance is everything. If you want to compare different locations, find a web site that is currently being hosted at each location and benchmark its performance with one of the performance analysis sites available on the web.
Two performance analysis tools that come to mind are Web Site Garage and Service Metrics, now both owned by larger companies.
My feeling is that the ideal data center has redundant connections, one hop (or less!) from the NAP and yet is still within driving distance of my location. I take the 24/7 security, fire prevention systems and uninterruptible power as a given.
If I have to sacrifice anything, I would sacrifice proximity and not require that the servers be near me, as long as I can call and have somebody press a reset button for me! Buy here, pay here Whether you are flush with capital or not,you need to consider whether to buy, lease, or rent. There are tax implications associated with the various alternatives that I am not really qualified to discuss. Your tax advisor should be consulted before making a decision.
Renting can make upgrades or possible hardware failures cheaper. This is especially true if your data center of choice is not within reasonable driving distance. If time-to-market is an important consideration, renting can also offer rapid access to additonal servers. If you need it tomorrow, this is often the only choice.
Renting can also be a lifesaver when unexpected surges in growth happen (we should all have this problem!!).
For a smaller operation there is also another alternative. There are several vendors on the Web who can provide bulk space on their servers. Some of these have sophisticated, Web-based configuration mechanisms whereby you can quickly add a domain, set up email accounts, and create Web and FTP access for a new client inside your "space". This can be a great alternative for a small operation or for a student who is creating and hosting sites to pay for education.
Such vendors include Best Web Pages, 9netave (now part of Concentric), Value Web Web Hosting, and, of course, Exodus.
Up, up and away!
If you have found this article useful and have read to this point, and if you are not already in the webhosting business, then you should be!!
You already know that this can be a lucrative business. Many small ISPs are developing their webhosting businesses to hedge against the competition from alternative access technologies.
On the high end, data center operators can provide services with very handsome bottom lines and at the other end there is a huge, blossoming cottage industry. There is certainly no shortage of clients?there is a list of them in the phone book, every phone book!
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