Positioning VoIP

Lately I have seen analyst reports touting the fact that VoIP hype has far surpassed consumer adoption rates and interest. Here are some excerpts from a recent InformationWeek article titled VoIP Promises Are Overhyped.

In "VoIP Liberates Voice from the Phone," Forester’s Maribel Lopez notes that, despite its promise and a 200% increase in adoption last year, VoIP is overhyped. Even when they are aware that VoIP even exists, Lopez found that fully 70% of consumers surveyed have no interest in switching to a VoIP service. Providers still haven’t made a compelling case for their services.

"Offerings focus on price, not compelling applications," Lopez writes. "Today, providers lead with cheap unlimited calling packages that mirror circuit-switch offerings. Consumers aren’t going to switch providers just to get free ‘repeat dialing’ and ‘click to call.’ At this point, the only reason for consumers to switch would be to save $15 to $25 off their monthly bill."

Lopez has some good points in the article and to her credit she realizes that our industry will be in deep trouble if we continue to focus on price, price, price. Studies have show that a massive focus on price alone without the realization that it is the services and ancillary benefits of VoIP that are more important will wreck this market.

Let’s remember that Skype, Google and other services allow free phone to phone calling so in the future focusing on price will be difficult to do as there will be a slew of free services that are widespread and well known.

In this sort of market it is the services that will differentiate one service from another. Just in Time Communications or technologies that make us more productive and efficient are some of the areas we should be focusing on as an industry. The find me/follow me functions of today’s Internet telephony services are far superior that that of traditional telephony but yet most consumers aren’t even aware of this important fact.

The do not disturb function of the latest IP telephony services have allowed me countless hours of sleep. Anyone with newborn babies can appreciate the value of this precious commodity.
Yet service providers are all about price today. They don’t focus on features, convenience and other attributes that VoIP calls possess and the PSTN does not.

Worse yet, studies have shown that if you focus too heavily on price, consumers will think your service is poor. In a world where VoIP E911 is in the news almost daily you have to ask yourself if your customers would rather have their ambulance made by Honda or Yugo. I don’t want my VoIP service provider to be so cheap that I have to be concerned that 911 calls won’t go through.

If you price too inexpensively, this is exactly the perception your service provider business will give off.
The whole issue of pricing is so important to me that I decided to launch a Consumer VoIP Marketing Summit at Internet Telephony Conference & Expo this October 24-27, 2005 in Los Angeles. The point of this summit is to ensure that carriers will learn from the available research in the market on how to price and position and market their services most appropriately.

Some industry pundits write repeatedly about how telephony should be free and they even launch their own free services. This may be good for consumers in the short run but is short-sighted. As an industry we need to find ways to make sure that numerous service providers can make it while finding ways to differentiate their services from each other. I fear if we continue to focus exclusively on VoIP pricing, we will wake up one day and find no one will pay for any services, no matter how valuable. It is time to change industry momentum and it is time to start educating consumers about the true value of services that make them more productive and efficient and most importantly make their lives easier.

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