The second keynoter of Wednesday’s lineup was Myrle McNeal, Senior Vice President of Local VoIP Services for Level 3 Communications. McNeal has responsibility for P&L, operations performance and marketing strategy for the company’s Voice over IP portfolio including (3)VoIP Enhanced Local, Local Inbound and E911 Direct services.
McNeal spoke about marketing VoIP services to consumers. He started with some background on what Level3 sees happening with the marketing of VoIP services and what we will need to do to accelerate the acceptance of VoIP services.
“Awareness is happening,” he said, “yet there’s still work that needs to be done to make everyone aware of VoIP. We’re just starting to move the mark, but the prospect for significant growth is higher then ever.”
Level 3 recently conducted some research on the VoIP market. Only 50% of small businesses are currently exploring VoIP, but of the ones who adopt, 75% are extremely satisfied with their choice.
Various research points to the market growing from $3B to $20B over the next 5-7 years. The bottom line is that 2006 is the beginning of the hockey stick, according to McNeal’s numbers, and consumers will continue to adopt VoIP in ever greater numbers. Jupiter research believes we will hit 20.4 million subs by 2010.
Level 3 did some research on consumer VoIP awareness and found that 60% of respondents say they have never heard of VoIP. Yet after hearing a description of VoIP the number who would consider moving was surprisingly high. 71% said they would be interested in switching once they knew what it was.
In Phase 2 research they found that unaided awareness of VoIP grew somewhat but the familiarity barely budged. More people had heard of it perhaps, but still were somewhat uncertain as to what it was. And in the mass market interest in switching remains flat: 70% of people are satisfied with their current service.
The research showed that the Top 5 reasons for not switching to VoIP include:
• Already satisfied with current service;
• Never received a special offer to switch;
• Don’t know the cost of the new service;
• Not familiar with who sells the service; and
• Concerns with the quality/reliability of VoIP.
McNeal pointed out that, “There’s no natural decision point to force a change in telecommunications habits, and price is usually not enough. Compelling offers must address key consumer needs.”
He went on to list some of the specific needs that consumers have:
• Offer Reliability (guarantee, pay to switch back, cancel at any time)
• Counter short term risk (up front free period or item, get paid to use.)
• Long term value (tenure rewards/loyalty benefits)
McNeal prodded the marketers in the audience to remember … For consumers, don’t forget the basics of a VoIP offering. These factors should include: Product, Price, Distribution, and Promotion.
Level 3’s research found that the Top 5 offers that moved consumers to consider a move to VoIP
1.) Sign up for VoIP and get one or more other communications services for a year.
2.) Sign up for VoIP and get something of perceived high value free each month for a year. (i.e., gas cards…)
3.) Sign up and get six months of service for free
4.) Sign up and get your choice of a free gift with purchase of a long-term plan5.) Sign up for VoIP and get a free phone service for life.