Surviving the Recession: The Residential Market

4. Consider new services that are lower cost. There are cheaper ways of doing almost anything, if service providers are willing to be flexible. For example:

• Consider marketing a very cheap voice line as an emergency service, for use when commercial power fails, when a cellphone is lost or for 911 service, Westfall said. “People hold on to their wireline service for peace of mind,” he said. “If you can make it inexpensive enough, they’ll keep it.”
• Sell low-cost VoIP with the broadband connection, Cohen suggests. AT&T and Verizon could resurrect CallVantage and VoiceWing, respectively, and market them aggressively to customers who want to drop their wireline offering. “They can keep these customers as broadband customers and generate some additional voice revenues at very little cost to them,” Cohen said.
• Consider broadband TV offerings as well. Andrew Morton, general manager for the Americas at Comtrend, is aggressively marketing his company’s residential gateway, which serves as an in-home network and can connect PCs to the TV to deliver video services, online games and more. “This allows a telco to sell competitive services that can still run in parallel to a cable or satellite competitor,” Morton said. “What they are really doing is securing their foothold in the customer. That’s what this is all about – how do we keep the customers. How do we keep what we have and then grow.” Companies such as NetFlix and Blockbuster are delivering movies over broadband connections, and the telcos could position themselves alongside those services.

5. Do a better job of telling consumers about lower price options. “I looked at my electric bill recently, and I was appalled at how high it was,” Scherf said. “When I looked a little closer, I discovered things I could easily do to lower the bill, and I was angry that my electric company hadn’t told me about these earlier.” Telcos need to be proactively working with consumers to help them lower their bills now and earn their loyalty later, Scherf said. A grateful consumer is more likely to be willing to buy advanced services down the road.

There is a group of consumers still on dial-up services that are convinced broadband is too expensive, Cohen said. “At this point, broadband is as cheap as dial-up, but they don’t realize that. Service providers need to do a better job of communicating this to their customers.”