Earlier this week, Forbes had a very good article about how hard it is to switch high-speed ISP providers. The premise of the article is simple: customers aren’t flocking back to the telcos (from cable ISP’s) despite big pricing incentives. The author notes that “A lot of people can’t tell the difference [in download speeds].”
So why would people stay with their cable providers – especially when it costs more?
There are lots of reasons. But two or three come to mind.
>> It is a non-trivial exercise to migrate all online references to your existing online identity.
Changing email addresses sounds simple enough. But it is never as simple as it sounds. Everyone knows my email address – even the spammers. I hate to send all the emails to all my friends and family. I hate to update all of my email subscriptions (list servers in my case). I hate to update every profile on every e-commerce website I utilize. And I hate to update all the web pages that have mailto: tags that refer to my email address.
I have minimized the effort by using a “generic” email address (not provided by my ISP) that doesn’t change. Of course, having a stable email address has its disadvantages. If I am indiscrete, spammers will have a static target for a long time. I have been able to “hide” from a lot of spam by changing email addresses on an annual basis. But I guess I have to nurture a persistent online persona. So for everyone who really wants to reach me (regardless of who my ISP is), then you should send all correspondence to email@example.com. At worst, Gmail provides space to cover at least a week’s worth of spam! 😉
>> Many services I like to use depend upon a relatively static IP address.
For example, I use RDP to manage my personal system while I am out of the house. I have configured my firewall/router to allow RDP. Moreover, I like to use IPSec to create more secure tunnels into my household infrastructure. So as long as I have a relatively stable IP, this is simple. Of course, I could have a static IP address. But that would cost too much. And I could utilize dynamic DNS (like DynDNS). But while I do use DynDNS, there are times when it is nice to have a reasonably stable, numerical IP address. Cable has provided that for me. DSL never provided that.
Don’t get me wrong, I don’t have anything against DSL. Indeed, I use DSL for a number of commercial ventures. But I have found that cable provides a much more manageable experience for remote management of my personal systems.
>> Both cable and telco ISP services are similar. Indeed, these services are a commodity.
People get connections from every kind of provider. People get IP addresses. People get relatively high-speed service. And support from both providers is similar. And everyone provides email hosting as well as a few megabytes of website hosting. And even AOL provides filtering and parental controls.
So the real question is why would people switch for just a couple of bucks a month?
I contend that most people will pay a couple of extra bucks a month in order to avoid the hassles of minor reconfigurations. For me, I would stay put for a couple of bucks a month difference. Of course, if you annualize that difference, it makes more sense to switch. But most folks don’t annualize the line items in their telco expense. So a couple of bucks means one less Starbucks a week.
So why did I recently switch my provider?
First, the costs (of switching) are not as burdensome on me. I minimize the email impact by not using my ISP email as my only email address. And I can rapidly make any and all changes needed. In my case, the biggest burden of such changes is my wife and the people who send her email messages.
Second, I switched providers because of content. My previous supplier was a cable competitior. I loved their service. And they really forced Time Warner to be more nimble – at least in our neighborhood. But Time Warner brought some local sports programming to the table. Their Metro Sports coverage will allow me to see my daughter play a number of “away” games that I would otherwise miss during the season. Also, I will be able to use someone else’s video footage even on home games.
So I switched because of differentiated services. And this may be the way that many customers look at the subject. Everyone can provide commodity ISP services – at least in the suburban world I live in. Therefore, my allegiance can’t be bought solely for “filthy lucre” – especially in miniscule quantitites. My allegiance will have to come from other “stickier” issues. Today, the “sticky” issue is content. Tomorrow, it may be the quality of service and/or support. But my personal experience is illustrative of one clear point: most people don’t switch for price alone. To get customers back, telcos will need to offer something more compelling altogether.
I sure hope they come up with something.