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ISPs on notice about churn rates

ISPs on notice about churn rates

One out of every five small business customers is unhappy with their Internet service provider and is on the lookout for a better deal, according to new research from APT Strategies.

The APT report suggests 22 per cent of small and medium enterprises are looking for a better ISP, a churn rate that APT chief executive officer Marc Phillips suggests is way too high.

"There is continual unhappiness and a feeling of distance the SME customer feels with their ISP," he said. "What we are seeing from many ISPs is a lack of a plan or a vision for their customer. They are not taking you on a journey, they are taking your money each month."

Phillips said there are very few ISPs that truly understand the needs of the small business customer. There is rarely a progression or migration path provided by the ISP to ensure a customer stays with a service provider.

"Customers don't just want connections - they want business issues solved," he said. "They essentially want a relationship and the ISP isn't giving it."

According to the study, the larger the ISP or telco, the higher the customer dissatisfaction. The research is seen as a vindication of the belief of many small ISPs and resellers, who feel that if large communications companies price them out of the market, the customers will suffer from even poorer levels of service.

"When I sell a computer I will travel many kilometres to install their Internet connection and give them half an hour of training," said Phillip Swifte, proprietor of Swifte Computer Services in regional Victoria. "For many small ISPs, we know customers as friends as well as business opportunities."

Simon Hackett, managing director of South Australian ISP Internode, said keeping high levels of customer service is an ISP's largest challenge as it grows. He said Internode has a lower churn rate than most ISPs because as a medium-sized ISP it is able to offer personalised service and flexibility.

Hackett said Australia suffers from a culture in which customers don't even consider negotiating to get what they want. Often a customer would rather leave the ISP before complaining or negotiating a better deal.


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