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What Really Are The Facts?
 
 

Thinking Of Becoming A Private Label ISP?

Interesting Things To Consider
Fact vs. Fiction

The reason people change ISPs is to save money, therefore the way for a virtual ISP or vISP to succeed is to offer a low price. Fact or fiction?

In this day and age, most people already have internet access. By far, most of the subscribers secured by an ISP or private label ISP will already have internet access and switch from another provider. An ISP or private label ISP can not succeed without taking subscribers from their competition. 

A major survey commissioned by and conducted exclusively for Alliance Solutions, shows that there are three reasons that cause internet access subscribers to change ISPs.

Quality:
The largest and most lucrative market segment (about 60%) change ISPs because they are unhappy with the "quality" from their current access provider. It is interesting to note that those in this category do not even consider service at a price less that what they pay they current ISP as they assume the quality will be even worse than what they now experience.

Referral:
The second largest market segment (about 30%) are those that move because of a recommendation from someone that has credibility and influence with them. This fits well with those ISPs or private label ISPs that wish to use marketing partners to compensate for their lack of brand recognition.

Price:
The very smallest market segment (about 10%) change for price
. The interesting characteristic of this segment is that they have absolutely no loyalty to their provider and will switch just as soon as they find a cheaper ISP. Life expectancy of a subscriber that switched for price is 90 days or less compare to about 18 months for those that switched for quality.

Competition is the greatest in the low price segment with most (maybe as high as 90%) of ISPs and private label ISP Providers competing for the the very smallest market segment. The good news is that this leaves an enormous opportunity for those ISPs and private label ISPs that wish to compete for the largest two market segments. A great resource is the ebook "ISP Marketing Secrets - Simple Steps to Exploding Your Subscriber Base!" available at http://ISPSecrets.biz. (This ebook is available free of charge with our proposal.) Or we offer a abbreviated eCourse by email through VISP University available at http://VISPUniversity.com.

If your marketing strategy is based upon offering a low price you will lose for many reasons. First, you are marketing to a very small market segment. Just 10% or less of all internet subscribers are prospects for your ISP or private label ISP. Second, the subscribers you do secure have no loyalty and will leave you the minute they find someone cheaper (and there is always someone cheaper). Third, there is no margin left to refuel your marketing budget once it is used. Fourth, those leaving their current ISP because they are unhappy, will not consider you as they perceive that the lower price means lower quality and they are seeking higher quality. In these cases a low price is actually counterproductive.

If this is not the case, why then does AOL have over 20 million million subscribers at $23.90 and United Online (NetZero, Juno and Bluelight combined) have only 3 million subscribers including all of their plans that are free, $6.95, $9.95 and $14.95? If low price was so important, would it be the other way around with NetZero having the most subscribers? By far, most subscribers (90%+) want quality not a cheap price.

The ISPs and private label ISPs with the largest subscriber counts retail their access at prices between $18.95 and $23.95. This gives them a large enough margin to secure marketing partners that help multiply their marketing efforts. And of course this plays into the second largest market segment as each of these marketing partners have a circle of people with which they have influence and credibility.

Back To "Fact vs. Fiction"

 

 

 
 

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