ISPs have always faced the challenge of how to differentiate themselves in the retail market but in business the differences can be more distinct as this report reveals.
Internet Service Providers increasingly face the challenge of differentiating themselves – it’s never just about the price. Providing access solutions and making it profitable is difficult but many companies are finding that having a range of value added services and products is the way ahead.
What are these services and how can resellers engage with ISP’s that help them grow their sales?
Dan Cunliffe, Head of Partners and Strategy at O2 Wholesale, says, “Data volumes are on the rise and access to data rich services is even easier than before with the explosion in the use of smartphones and tablets. Partnering with an ISP that has both a fixed and mobile offering in its data strategy is therefore important.
Michael Viney, Head of Channel Sales at Zen Internet, says his company feel they can best differentiate themselves and their product line not by promising more for less, but by ensuring that the services we provide are best-in-class and maintaining their existing, customer-focused approach across the whole portfolio.
“We don’t believe in cut-price deals or aggressive marketing campaigns, but on delivering good, reliable, high-performance products backed up by great service and support. Value is important, but not just in the sense of ‘bang for buck’. We think that value should mean getting something that meets or exceeds expectations at a reasonable price, and with no hidden charges or ‘gotchas’.”
Larry Dutton at Redcentric (formed from the recent demerger of Redstone), “It’s all about supply and demand. Engaging with our channel to understand the services they are providing across our network has helped us to differentiate our solutions. For example we’re now providing voice solutions where we provide a private broadband network to our partner, interconnected with their own cloud voice platform. This allows them to have confidence that the technology we provide is specifically suited to their products and services.”
Some ISPs are now competing for hosted telephony business – providing the connectivity and the application sounds a reasonable idea – after all, it’s just the one throat to choke if there is a problem isn’t it?
Dan Cunliffe believes it is good to have a varied offering for your partners as it adds value. “However, without credible products in these areas of multiple offerings it could lead to losses for the ISP rather than gains. Make sure you trust your ISP to source the best of breed products when choosing to buy a multi offering solution.
Being able to offer multiple services from one provider can deliver extra value for partners and their customers. However, if not all of these services are up to scratch it could lead to losses for the ISP rather than gains. One bad service or product within a portfolio could potentially undermine the whole partner/customer relationship. Make sure you trust your ISP to source the best of breed products when choosing to buy an offering comprising multiple services.”
Michael Viney at Zen says his company builds technologies and services partners can work with and add value to, and one of the ways they do that is by developing the right products for our their customers.
“If a product is robust, easy to work with, effective and good value, then it’s easier for resellers to use it as a platform.
Our portfolio also covers the full range of small, medium and large enterprises. If a partner is working with a small business that needs a single ADSL or Fibre connection, we can help. If a partner is handling a complex IP VPN solution covering hundreds of sites, or a technically demanding hybrid cloud solution for a large corporation, we can help with that too. SIP Trunking and IP VPN services are important now and are only going to grow more crucial in the near future, and by offering the right combination of access technologies, IP VPN and SIP, partners can deliver next-generation, converged solutions that give their customers everything they need. And when they partner with Zen, they know it’s going to work.
Partly, this is about finding the right access technologies. ADSL will still work for many smaller businesses, but as more companies move into Cloud computing and SIP trunking we expect to see a shift towards higher-speed Fibre Optic Broadband products based on FTTC and FTTP, not to mention Ethernet and EFM (Ethernet in the First Mile). We believe it’s possible to offer the speeds and reliability of conventional Leased Line services at a lower entry point – and we can do it without compromising on quality or service. That’s one of the reasons we’ve invested millions in a new network of PoPs (Points of Presence) covering every major business centre in the UK, and why we’ve built an NGN network that prioritises delay-sensitive and mission-critical applications. You can’t provide these services on shoestring connectivity solutions. You need something that’s built to handle the workload.
Mark Curtis-Wood, Head of Networks at Nimans, “Some ISP’s have moved into other value added services using higher bandwidth because you’ve got fewer customers to deal with and can make more margins. But on the downside there’s more liability so if it goes wrong you are more exposed.”
Dr. Stuart Marsden, Managing Director of MyPhones.com, asks the question – ‘Bundled packages from ISPs or telecoms providers – what is the difference? Do they really represent good value for resellers and their customers?’
“The new breed of bundled package is certainly a convenient option for resellers. But in many cases, that is all they are. After all, the aim of the telecoms provider is to sell their telephony services and the aim of the ISP is to sell their access services.
Unbundle the packages and what have you got? There’s a chance there will be elements of the package that are, at best, indifferent either in terms of cost or quality, or simply neither wanted nor needed.
Compounding this are the typical long, lock-down contracts offered by providers. They may appear to be good value, but could they also be fostering a ‘one-size fits all’ approach that promotes mediocre services, and ultimately disappoints end-users and reinforces suspicion of cloud solutions?”
Larry Dutton at Redcentric says, “Just providing internet access is still the case with many traditional ISPs but this does not offer the flexibility that customers demand. At Redcentric we provide the network connectivity of course but the resellers and customers benefits come from access to an integrated network, data centre and cloud services that are layered over the top of the it. Interconnecting with our Cloud services to offer things like Infrastructure as a Service and hosted Unified Communications just involves a simple network configuration. Having multiple integrated services is another way that we differentiate our service offering and complement the core business of our partners.”
What happens if a reseller signs a customer on a multi-year contract and after six months the end user goes bust? What liability does the reseller have?
Dan Cunliffe, “In this case sometimes prevention is better than cure. We live in an era where robust credit checks and personal guarantees may be needed to even start a business conversation. The reseller needs to ensure that they have the same level of exposure with their customer as they do with their supplier. This allows for a transparent and simplified model when dealing with the unfortunate situation of the end user going bust.
Larry Dutton believes flexibility is the advantage that comes with a channel-based relationship.
“While the liability would be with the reseller for any term on the services typically we provide low risk three to six month terms as we know that technology requirements change for a variety of reasons as infrastructure is upgraded and we don’t want to restrict our partners and their customers. We do pass through any commitments that we have with upstream providers but certainly do not insist on tying in our partners unnecessarily.”
What makes for a good ISP partner?
Dan Cunliffe, “Great customer service is right at the heart of building a successful, long-term relationship with channel partners. However, most of the time it is something that can be taken for granted in the day-to-day running of a busy channel business. Where it really comes into its own is when something goes wrong.
By offering 24/7 support and having a dedicated sales and support number, you’ll give partners peace of mind that help is available whenever it’s needed.
Face-to-face dedicated account management is also hugely important for establishing a close relationship between partner and account manager. If you show partners that you have real expertise in your field they will feel confident in sharing this knowledge and enthusiasm with their own customers. Finally, partners want to know exactly what they’re getting and if they are involved and informed throughout the process, and not presented with any unpleasant surprises (like hidden costs), this is likely to help boost customer retention.
Beyond traditional customer service, there are measures a business can take to develop a partnership further such as arranging and hosting regular social and educational events such as presentations, dinners and workshops.
It’s also a good idea to provide regular bespoke training sessions for partners. If you go beyond the call of duty, then partners will appreciate the fact that you are helping them to grow their businesses.
If you want to make partners feel particularly valued, you could arrange and host reseller events and offer them special incentives and discounts.
The perfect channel partnership is based on trust, support, commitment, clarity and reliability; none of which is possible without the foundation of exceptional customer service.”
Michael Viney at Zen Internet believes good partners are a crucial part of the business for any forward-looking ISP.
“The best have a real depth of expertise in their own specific markets, and by enabling them to offer more and better services, we as a provider help our own business grow. At Zen, we’re always looking for partners who can do more than sell me-too solutions or shift boxes; we’re looking for partners with the invention and ingenuity to explore new frontiers and opportunities, and who share our customer-focused, service-led approach. We love it when a partner comes to us with a need that’s not being met or an idea that takes our platforms somewhere new. It inspires us to do even more.
On the provider’s side, transparency is always best. We share our product roadmap and our educational tools, and we provide our partners with the best sales support in the business. We build great products, and then we help our partners tailor those products and add value for their own market segments. Most of all, we believe in an honest approach. We don’t claim – or even want – to be the cheapest. We try – and want – to be the best.
A good provider gives its partners the chance to increase their expertise through master classes, specialist training and sales, technical and marketing support. That, along with competitive discounts and regular business reviews is the core of our own Partner Programme, which we think leads the industry in terms of the quality and breadth of support. For us, it’s a ‘chain of gain’. If our partners provide great products and services to their customers that help them achieve their business objectives, and enjoy continued growth, then it’s a win win for both parties! “
Mark Curtis-Wood, Head of Networks at Nimans notes that consolidation in the market has taken place particularly at the smaller end of the market, where some ISP’s have diversified their operations.
“If you look at the big players there have been some notable acquisitions. What we have seen is a lot of the smaller ISP’s being swallowed up because broadband has become very commoditised. When estates are based on high quantity and low margin it becomes a lot harder to service because you are making smaller margins and you have such high volumes to maintain.”
Paul Sillars, sales Director at M247 says a good ISP will provide quality connectivity to the internet and as a result should be able to provide a great environment to help your applications and systems grow.
“You need to make sure they have an infrastructure to deliver what you require. For example, those with a good underlying network should be able to offer you a number of complimentary services. Of these, the most common ones would be online backup, co-location, web hosting, dedicated and virtual servers to name a few. All of these we would consider to be data centre services although, for the sake of clarity, the data centre is normally kept out of the marketing hype in favour of selling these services, almost as a commodity.
For those ISPs that have built a good infrastructure it has been a natural progression to reach further in to the customer property and offer the physical PSTN lines and calls. There is a temptation that hosted voice is an easy route for additional margin. I would suggest that you work with suppliers that have a tried and tested model and know where their strengths lie. M247 concentrates on SIP provision in this area and has chosen not to offer hosted voice. This allows us to concentrate on what we do best – being a carrier. The best ISPs will know how to concentrate on what they do best, so always be cautious of companies that do everything. It may make it easier for you to purchase from one place, but that doesn’t always make them the best at everything.
It is easy for the channel partner to get drawn in to selling everything as well. Make sure you understand the customers’ needs along with how creditworthy they are. The idea of making a few hundred extra a month on a nice leased line, pales in to insignificance when they go bust, leaving you with 18 months of a contract left to pay. Many providers will now help you mitigate against the risk, or chat to your own insurance company who may be able to help.
They key is a provider that you can talk to. Price is not everything. It may be your starting point, but you need good pre and post-sales support, underpinned by 24/7 support from people that know what they are doing.
Larry Dutton at Redcentric ,“To succeed as a business ISP you need to have honesty and flexibility. Engaging and understanding the reseller and its customer’s requirements is critical. For example, if a network solution is used for voice we can design in QoS and resiliency. Or if a partner is using our network to deliver hosted services, we’re transparent about where we interconnect to keep traffic within the network and provide an end to end service. Being honest about how our network is designed and the points of presence for interconnect to 3rd party platforms and data centres allows us to deliver the right technology and service level.”
“Every comms provider or ISP – and every dealer and reseller for that matter – will always tell prospective customers that they offer a high level of service. You could hardly be expected to say anything else after all.
But in today’s hyper-competitive market, there is a keen awareness amongst customers that, whatever suppliers might say, there is probably little to choose between them. This is why it is so much more important now to be authentic; to be completely honest and open with customers about their options and their expectations.
That means, of course, focusing on their needs first and foremost. This is something we encourage our partners to do all the time. To the layman, one kind of broadband or connectivity looks very much like another – but there are so many options available now, there is genuine choice and customers can only be best-served by partners who understand how to match the different services with the huge variations we see in customer requirements.”
Most customers will not really know what they want. They will need guidance and will want to talk to someone they feel that they can trust. This is why it is so important to be authentic in your approach. If you genuinely have the customers’ interests at heart, they will sense that and respond positively.”
To make it as easy as possible for our partners to offer the right advice to customers, Entanet makes its own experts available to them. We also work hard at making our services very accessible and easy to understand.
We tend to agree with Michael Viney at Zen Internet when he says the business ISP market is going through a period of intense technological change and consolidation. But it’s still a challenge differentiating some of the larger providers from each other, at least in terms of anything more than price and bandwidth. For too many, providing access solutions is all about those two factors, and not about the long-term quality of the products or the service. And while many providers are now offering add-on services and products, they’re not necessarily doing so in the most reliable or responsible way. It makes sense for ISPs to compete on services like telephony, or hosting, especially when it gives customers or resellers just one point of contact. At the same time, we’re going to see a lot of me-too products, not all of which will be truly business-grade.