cheap moncler In an email Q with the WHIR
Bob Angus on Selling Premium Services
In an email Q with the WHIR, VeriSign SSL solutions product marketing manager Bob Angus explains how businesses can find the right mix of products, quality, and pricing to make selling premium services highly profitable. He will be discussing premium service strategies in greater detail in his Tuesday session at HostingCon 2009, Premium Services to Cost conscious Customers. 7, 2009 Selling premium services to businesses that have suffered due to the economic recession is no easy task, however, if they are implemented well, they can boost revenues significantly.
The WHIR: In what ways has the recent economic downturn changed how online service providers sell their services?
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Bob Angus: The economic downturn has been difficult for everyone. However, we seen that as consumers (and even businesses big and small) strive to cut costs that they are going online to find deals and cost saving services. As a result, spending has shifted away from traditional offline businesses and ways of delivering services and leading to further accelerated growth of online businesses. This is perfect for online service providers more online business customers starting and looking to valuable services to drive success. At VeriSign, we seen this first hand as our web hosting partners have been very successful in selling SSL (the green bar of EV in particular) to their customers.
Perhaps spurred on by Wired editor Chris Anderson book The Future of a Radical Price and the general feeling that online services should be free, many web based businesses are offering some of their services for free, hoping to up sell customers on complementary services. Is this a viable model for the hosting industry? What are the potential problems with it?
BA: Yes, that a very viable business model. I used to work at a company with this model we called it and upgrade The reason this approach works is that you introduce your brand first and have the first shot at making that newly acquired customer a valuable, loyal customer. The key is to then upsell (aka make money) effectively by truly offering value. Then it a matter of execution build a message around the added value and present a great offer to get them to act.
Certainly businesses need to make sure that the value add sales more than offset the expense of delivering the free services plus your acquisition marketing costs. Losing money over a long period of time is not sustainable. Assuming that a business strives to be profitable, then the only potential pitfall is that you actually end up giving away all of you TRUE value and your customers get everything they need for free. The hurdle to get them to pay for something will become too high. It okay for customers to choose you as the low priced provider where they can purchase the other things I need. It not okay if you become the should I pay for that provider.
In a declining economy, how can vendors sell services to businesses that basically want to reduce costs any way they can?
BA: It all about the value you present. For VeriSign, the value we and our partners have successfully presented when selling SSL is all about ROI. When you can demonstrate that buying VeriSign EV SSL has led to 5 87 percent uplift for other companies, then the concept of cost goes out the window because most companies can breakeven and make even more money back at that rate.
Other simple tactics and execution techniques that help boost conversions include: adding the offer directly in the purchase path (you customer already has their wallet out), make the higher value product or service as the default purchase option, and always demonstrate that you a customer too by visibly using the same product/service that you are selling them.
In order to compete based of premium services, should companies focus on one or two core competencies, or try to provide a comprehensive solution (perhaps using reseller partnerships)?
BA: There no golden rule for the number of premium services to offer. Find out what is truly valuable to prospects and existing customers. What makes them successful? How can you solve their problems? How helps grow their business financially? You discover multiple opportunities and can add more as new services become available. In many cases, you will end up retaining your most valuable customers by offering a suite of premium services so that they know they can get they need, when they need it from you. They don have to shop anywhere else to get what they need.
How does VeriSign price structure reflect its strategy to sell premium services?
BA: The VeriSign Partner Program offers competitive margins to online service providers. It really simple the more you sell, the bigger your discount. Also VeriSign offers the most comprehensive set of SSL certificate options and breadth of price points. Through the VeriSign Partner Program, web host and online service partners can sell any of the VeriSign SSL brands VeriSign, GeoTrust, or thawte. That way, partners can offer the right SSL certificate for their customers situation and needs.