Thursday, March 05, 2015

Sell fiber enabled services, not “gigabit.”

There’s a well-established maxim in the sales of information and communications technology (ICT) products and services: Don’t sell bits and bytes, feeds and speeds. Instead, sell features and benefits. There’s a good reason for this selling principle. Most consumers aren’t interested in technology. They’re interested in what it can do to benefit them and its value for the money invested.

The same rule applies in telecommunications. But it has been violated in the marketing of fiber to the premise (FTTP) services, where Internet Service Providers have defined FTTP by its speed – its ability to deliver bandwidths of 1 gigabit or more. Problem is, only a small percentage of consumers really know what the term “gigabit” means, according to a survey by Pivot Group spotlighted in the January/February issue of Broadband Communities magazine. (Sell Services, Not Speed)

“Service providers spend an awful lot of time and marketing spend emphasizing speed, but this research reveals consumers are confused regarding speed references and perceive that their current speed package is sufficient,” Dave Nieuwstraten, president of Pivot Group and co-author of the study, observes.

The takeaway: What really matters isn’t gigabit bandwidth per se but rather the services FTTP can enable in the home where people have high definition televisions, desktop and laptop computers and personal devices such as tablets and smartphones all being supported by the home’s Internet connection. FTTP will play an increasingly important role in the delivery of video content as more is delivered via the Internet, enhancing its value to consumers sensitive to high price points for Internet service used to support only web browsing and email. That will increasingly be so as live sports migrates to Internet streaming.

In the era of FTTP, it’s really no longer useful to market bandwidth or brand it with a speed-based term such as "gigabit” or “broadband” -- a now obsolete term used in the 1990s to distinguish narrowband dialup Internet access from first generation ADSL services. Similarly, marketing Internet services with speed/bandwidth price tiers is no longer truly relevant for premise services. Without benefits described, consumers will naturally tend toward lower cost options.

Emphasizing the utility and benefits of a FTTP connection also fits well with the open access, wholesale model where the owner of the FTTP infrastructure sells access to ISPs who in turn sell retail services delivered over it. Including new ones mentioned in the Broadband Communities article such as installing and supporting the next generation of more robust home Wi-Fi needed to enable all of those wireless devices being used in today’s homes and home-based businesses.

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