Valuing your ISP

I know the answer to the question "What is my ISP worth?" If you don't—and/or don't know what determines that worth—you'd better listen up.

by Doug McDonald Manager, Partnership Programs, The TUCOWS Network courtesy of HowToSell.net [October 1, 1999]

Have you seen what people are paying for some ISPs these days? How little they're paying for others? Do you know what your company is worth? Or, more importantly, how to raise its value? If you said, "get more customers" you would be partially right. There are other components to the answer though:

1. Converting customers from other providers
2. Increasing the revenues from your existing client base
3. Increasing the perceived value of your service by providing your customers with more for their dollar than the average ISP.

I will address these other factors in later columns; for know, let's look at how to get new customers.

We all know how easy it is to say, "we'll get more customers" and how difficult it can be to make this a reality. The key is to understand where these new customers are going to come from. There are really only two sources: those not online yet and those online with someone else. The two categories are different types of sales and require two quite separate sales programs. This week, I will examine how to get the truly "New" customer, those who have never been with another provider.

Connecting with the "Disconnected"
The division between the haves and the have not's in technology has traditionally been about money. This financial barrier to entry is being reduced with every Intel upgrade. With the cost of PCs falling at almost the same rate as demand for the Internet is growing, the bar is continuously lowering. The largest segment of next generation Internet adoption is likely to come from the "Proletariat". There is a great opportunity for expansion in this area but only for those willing to weather the startup costs. The Proletariat is from a lower income bracket—and, statistically speaking, from a lower education demographic as well. The children in the household are often the only ones with any exposure to the modern PC.

Making it easy
Preparing for the next generation of Internet users can be as simple as refining your signup process or as complex as redesigning your marketing efforts and building a parallel service and infrastructure for these newer users. It might mean needing to implement one of the TV set top box solutions to take the bar even lower. These are all solutions that you need implement within your organization, at your cost. That is nothing new for this business. For years we have been adopting new methodologies and installing or supporting new technologies in the hope that they will be fully utilized. Understanding that these new users will need more help and simpler systems than your current customers is important to your success in not only attracting these new users but also in keeping them. What's more, simplified systems can only satsify part of your customers' needs and requirements: You'll also need to educate these new customers more aggressively than you ever have before.

If you don't have the complete installation and configuration settings done for your chosen browser and email application, these are readily available online from various sources. Alternatively, there is likely someone in your Customer Service or Technical Support departments looking for a way to make a few extra dollars or to contribute more to the company as a demonstration of their abilities.

Education and instruction
Preparing standard introductory educational documents and web pages will help lower your technical support requirements, but nothing will reduce this demand like hands-on training. "Introduction to Email" and "Internet 101" were the staples of my presentation portfolio going back a few years to when a part of my job for Internet Direct was speaking. Those basics have not changed, they have just become more important. Providing your new customers with good written material is important, but in my experience nothing teaches me how to do something like seeing it done step by step and following along.

One of the most successful initiatives we ran at Internet Direct was free, no obligation introductory seminars—taught at the head office, in a very simple classroom style setting with a single computer outputting to a projector, on a plain white wall. Later, we took this show on the road and made these presentations at any local show or to any local group or organization that would take us. People who had avoided getting connected because they felt insecure asking questions, or just never knew the right questions to ask, would come to a seminar at their local home show or as a part of a larger group meeting. Once they had been introduced to the Internet they could verbalize their questions or concerns.

Tip: From personal experience, if you are thinking of doing a seminar targeted at Senior Citizens and retired persons, which is a growing segment of the online community, double your time estimate.

go to Page 2:

Read other articles on Company Valuation
Valuing Your ISP When You Sell
How Much Is My ISP Worth?