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Study: Price Alone Is Not Enough Reason to Switch to VoIP

It should come as little surprise that over the past year awareness of VoIP has increased in the marketplace. Surprisingly though, a recent study from industry heavyweight Level 3 Communications found that despite increased awareness of VoIP as a service option, familiarity with the actual benefits of VoIP is actually decreasing. Level 3’s VoIP Market […]

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SMK

Sean Michael Kerner

Jan 31, 2006

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It should come as little surprise that over the past year awareness of VoIP has increased in the marketplace.

Surprisingly though, a recent study from industry heavyweight Level 3 Communications found that despite increased awareness of VoIP as a service option, familiarity with the actual benefits of VoIP is actually decreasing. Level 3’s VoIP Market Accelerator Study found that less than half of the respondents to its survey reported that they were ‘familiar’ with VoIP offerings.

“We were surprised to learn that while awareness of VoIP has increased since our Q4 2004 survey, familiarity with what VoIP is, what it offers, and the benefits of it has decreased over the same time period,” said Cynthia F. Carpenter, vice president of marketing, Voice Services at Level 3.

Level 3’s study also asked survey respondents about 39 different specific promotion offers designed to entice a phone customer to switch to VoIP. Based on the feedback received, it would appear that low price alone is not enough to trigger a switch for most.

“Of the 39 offers we tested, only 5 increased interest in switching to VoIP,” Carpenter explained. “Included in the 39 offers were all offers that exist in the marketplace today. The five offers that actually increased interest in switching were all offers that do not exist in the marketplace.”

Level 3 identified three common elements among the five successful offers: The first is that the offers included a minimum promotional value of $100. The second was a ‘switch-back’ guarantee that gave potential users the security of knowing they could go back to POTS with no risk. And third, the five offers all included some form of inducement to motivate longer-term loyalty from the potential VoIP customer.

“What we did expect—and what was proved out through the research—is that price discounts on VoIP by themselves do not appeal to everyone,” Carpenter told VoIPplanet.com. “While there will always be a segment of consumers who are primarily price-driven, the research shows that the majority of respondents (70 percent) are satisfied with their current provider and they require more than a deep price discount to spark their interest in switching to VoIP.”

This article was first published on VoIPPlanet.com.