Last week we took a big step down a new road with the acquisition of Boardtown, company based in Starkville, Mississippi, whose primary products deal with billing, provisioning and customer care. You are most likely to have heard of their Platypus billing product.
The acquisition itself wasn’t that big relative to our size, but the direction it suggests certainly is. So I thought I would write a bit about why we have done this and why we think it is important.
It is a large problem for our customers. In the course of dealing with customer integration into the OpenSRS platform, and in having to deal with this problem for two service providers myself years ago, we have found that taking and keeping track of payments, provisioning services and managing customer care are significant challenges for service providers, for you guys.
Given the size of most service providers and the competitive nature of the services offered it is essential that these functions be automated and accurate. Problems with them lead directly to support costs and possible customer loss.
For years it has been common for service providers to have numerous customers receiving services without being billed. A quick personal example. My home DSL service, provided by Bell Canada, the largest telco in the country and owner of a multi-million dollar billing system, did not bill me at all from May-January of this year! Because of this they lost me as a customer.
Service Provider 2.0
All of this was problematic in the past, but we are at an inflection point in the competitive environment. Internet usage has reached a point in North America and Europe where growth in users has essentially peaked.
This means that the game has changed. Growth can no longer be expected to come from new customers. It now must come from selling more to existing customers. This is not news, but it may be the most important structural change for service providers for the next 5-10 years and the implications on operations are not yet digested.
The need to offer more services is most often constrained by current billing and provisioning systems. This has been our experience and is shared by others who provide services to service providers. Believe me, I have asked.
Current Market Environment
Today most service providers use inhouse billing solutions. These range in complexity from near-manual systems to relatively complex full-scale billing solutions. They either require much burping and feeding or constrain the ability of the service provider to offer additional services or both.
While sometimes life-threatening, many smaller service providers (here I would say 250-5000 customers) especially, have been able to avoid and ignore this problem. I do not believe this can continue.
Besides they are too expensive by a couple of zeros for the vast majority of you guys and you are the ones who are winning competitively.
Why buy Boardtown/Platypus
Their experience allows us to enter this market better and faster. The company has been providing billing and provisioning software to service providers for nearly seven years. We are big believers in experience and subject matter expertise and believe that these people have demonstrated the highest level of knowledge about billing for service providers.
They have a strong reputation with their customers. It seems their customers like them as much as you guys like us and, maybe more importantly, they care as much about their customers as we do about you guys.
It was amazing that this was reinforced even after announcing the deal. I had a number of old Platypus users come out of the woodwork, current employees referencing previous jobs, bankers who had operated service providers years earlier. All of them had positive things to say. All of them had a story about customer service expectations being exceeded. We of all people know how hard it is to please you guys and have you say anything nice about suppliers.
Plus they are good guys. Oh and Mississippi is a bit warmer than Toronto in the winter!
We aren’t talking about product plans at this point, but you all know that I prefer service models to software models and I prefer subscription or monthly pricing to the classic software model of license and support.
We like to tie price to value wherever possible. It is how we like to buy so it should be how we like to sell.
All in, we are very excited about this. We think it can really enhance our ability to help you be better at what you do and to be more competitive. And if we do that than the rest takes care of itself.
– need for premium email
I wanted to make some comments in relation to both this syndicated article and to a recent thread on ISP-CEO about whether “for pay” spam filtering (us, postini, brightmail, etc.) could be charged for or need be included for free to access customers.
The opening in the article is very important:
“Drumroll please. I'm here to unfurl the E-Mail Declaration of Independence.
Article One: Your e-mail address should be your personal property, not tied to your Internet service provider, employer or school.
Article Two: Your e-mail should be managed online, so you can retrieve both new and saved messages from any computer or mobile device that's connected to the Internet.
Article Three: If you've followed Articles One and Two, you are free to change your e-mail host and your Internet service provider at any time without the hassle of having to tell family, friends and co-workers that your address has changed.”
I have talked in the past about the big problem with email and service providers being that they view email exclusively as a cost centre and not as a profit centre. This has the effect of thinking about it as a necessary evil that need be provided as efficiently as possible. Even Mike Langberg gets that this is not the case.
Email is used by every Internet user. Only 10% or so need websites. Yet we as an industry sell websites and give away email.
When a service provider thinks about email as a source of revenue, as a profit centre, they start looking at it through a different prism.
EVERY service provider, each one of you, whether ISP, hosting company, web designer or other, should have a premium email offering that includes:
– domain name
– LOTS of storage
– top-tier spam filtering
You should also have a low-end free offering (“1000 free pop boxes with the $3.95 shared hosting package!” which to me is like free peanuts at a bar) which should be viewed as a cost centre AND as a contrast to the premium offering.
Look at what the guy in the article is paying! $95 for a name, an email box and some features!!! Charge $35 and you are making lots of margin even if you outsource everything (As you should). Believe me Netsol is selling LOTS of boxes to LOTS of Mike Langbergs. Let's not even talk about the $12 for url forwarding :-).
Thinking about selling email as opposed to giving it away is a change in mindset that service providers should make. You can tell me all you want about it not working. I have the empirical data not a feeling. I tried selling it myself using google adwords (and I mean myself right down to the copy). It worked.
– email as strategic in world of multiple service providers
This looks promising.
In the past I have talked about how access, the ISP business, was the only Internet service where telcos and cablecos actually had a meaningful market presence. In webhosting, email and domain registration they are almost non-existant.
They have done well in access, well more specifically broadband access (they generally sucked at dialup), because of the high infrastructure costs, the regulatory environment and their huge legal departments.
Well, lawyers as a competitive variable tends to be a short-term strategy. I have started to come around to the view that the battle for access is far from over. In fact I am now starting to believe…hmmmm…recognize that where we are today is simply a point on a long continuum.
I have been mulling on this for a while as we wait for penetration from 802.16 to come. It seems to me that with long haul bandwidth cheap and getting cheaper, something providing 30km coverage will get most providers most of the way. And here providers will not need telcos in any way. In fact they will nibble around the edges, skimming off the juiciest bits first before the telcos even know what hit them.
Then I recently read this which can change the calculus again. I have always thought that broadband over power was the best long-term solution and could indeed win in a fair fight. I of course recognize that these fights are rarely, if ever, fair.
Think about it. The typical home has 2 or 3 cable jacks, 4? 5? 6? phone jacks, but plugs all over the place! 2 or 3 just in one room! It’s a lan-in-a-box!
Now wifi makes that less relevant, but I like the idea of packets just coursing through the walls of my house. And I cannot imagine the utilities having the same illusions that they can deal with end-users that telcos and cablecos hold.
Lastly, what I also find interesting about this is that it is likely to be other Internet services that provide the foothold for providers to sell access. You get your hosting from me? How about a 30mb connection? I like it alot.
I was reminded today of the importance of customer service and how it is really a matter of culture that permeates attitude.
My business credit card expired this month and I received a new one. I primarily use it for travel and the odd other business expense, but I also use it for my home internet account (if revenue canada is reading be assured that almost all of my time at home online is spent working. no joke).
Literally one day after my assistant gave me my new card my wife told me she had received two calls from Bell Sympatico about an urgent matter. They would not discuss it with her nor allow her to try and help them identify what the problem was. They simply told her that I had to call them immediately.
Now I must digress here to say that I can sometimes be a pain in the ass to suppliers if I do not feel they are acting appropriately, but my wife is someone who will bend over backwards to give them the benefit of the doubt. She will try and imagine that they may be having a bad day, or have difficult jobs or other attempts at empathy. This is useful in her profession (criminal law). She is exceeded in her empathy by no one, except perhaps my assistant (more on that later).
My wife informed me that they were quite curt and assured her that this was an extremely important matter that she could not help them with. She told them that I was quite busy and may not get back to them immediately to which she says they replied “well if he wants Internet access he will have to make the time”.
The next morning, this past Friday, I informed my assistant of my wife's conversation. She reminded me that my card had expired and set off to rectify the situation. Late that day she informed me that she was unable to settle the matter. After much time on hold and despite the fact that she was able to give them great detail about my account and life (my pin number, which is an arcane bit of Bell ID that I do not even know or use, my credit card number, the old expiry date, every bit of name, rank and serial number that they could possibly want to know about me and some they certainly wouldn't want to know), they would NOT take the new expiry date from her. She told them what the problem was and they wouldn't let her solve it. They insisted on speaking to me. In fact, she says they told her “we know it would be in our best interests to take the number from you, but we are not allowed to”! Orwellian.
On Saturday I enjoyed “boys day” with my five-year-old son as my daughter and wife engaged in their own pursuits. We put the seat up first thing in the morning and generally have a great time. After a hard week of work it is indeed one of my greatest pleasures. We were engaged in our usual pursuits until suddenly at 5:20 pm my Internet access went dead (I was looking for a spongebob walkthrough [note to revcan: a rare example of personal packets]). It had been working all day. I then recalled the whole Sympatico thing and set out to rectify it.
I called the number I had/knew. I stayed on hold for 30 minutes or so listening to the inane upsell/cross-sell hold message (just use a radio station for goodness sake. all the upsell does is remind me of how long I have been on hold). Then the line went to a ring. Good, finally a person. It rang and rang and rang and rang. For ten minutes. I gave up and started again. Only this time I was informed that the business office was open Saturday 8am-6pm and closed on Sunday. Thank you, goodbye.
Here is what it felt/feels like to me. They were at a minimum curt and at a maximum rude to my wife. They were at a minimum officious and at a maximum stupid with my assistant. Then someone turned off my packets at precisely the right time to cause me maximum grief (I am writing this on a packet-less Sunday). At every step they have acted like THEY are doing ME the favour rather than the other way around. This was an expiry date on a credit card. I was paying THEM. I wasn't trying to borrow money. Were they worried about the ring of bad guys going around paying other people's bills? And you know what? It is not the expiry date thing that really angers me. It is the attitude shown on not one, but three occasions.
I will now immediately move to another provider. I am sure I will have a glitch or two. I don't care. There are so many lessons here. Including:
– The customer is always doing the supplier the favour. always. I feel this way. I think and hope every employee at Tucows feels this way (and I know this can't be in absolutely every single interaction, but I wish it were). If you think we are acting differently let me know;
– Marketing products is about doing great things or cool things (think about Ferraris or iPods). Marketing services is about not doing bad things;
– Large companies, especially those with monopoloy or oligopoly backgrounds, are extremely challenged culturally to provide great customer service;
– Dsl and IP-over-cable are just points on a line and over time there will be competitive markets for access just like there are now for hosting and the telcos and cablecos WILL NOT WIN;
I was (past tense) a Sympatico customer for years. The service was generally ok. Not great. Some bad things, but mostly good things. This experience was horrible.
That's all it takes sometimes. We should all remember that.