The dangers of following Dixons into free ISP

This year, I thought I’d launch the Charlie Dobres ISP. Unfortunately, I don’t think I’ll be alone in jumping on this particular bandwagon. If portal sites were big in 1998, this looks like the year of the free Internet service provider.

Blame it all on Dixons’ Freeserve. The offer of free connection to the Internet has enticed nearly 1 million people to sign-up.

About 75 per cent of these have become regular users (at least once a month) and Dixons’ claims 40 per cent are new to the Internet. And all this in a matter of weeks.

Becoming an ISP looks rather enticing to an increasing number of companies.

The potential benefits of Internet service provision are many. If you manage to attract tens or hundreds of thousands of users, then you may well have a media proposition of interest – not just to advertisers, but to online retailers such as Amazon books.

Then again, having built a nice little customer database, you are free to cross-sell all manner of goods and services and rake it in that way – this one is a bit more long-term though.

You may choose to sell e-mail addresses to a mailing list. Some companies may even view becoming an ISP in 1999 as a quick way to hike up their share price.

But where there is software, there are bugs. Firstly, do you have an existing distribution network for the software (high street stores or a newspaper, for example)? If not, you’ve got a problem.

Secondly, and more importantly, are you prepared to annoy your existing customers? In fact, is it OK to infuriate them when, maybe, the connectivity fails at a crucial time, or their computer crashes?

I shop at Dixons, but mostly in spite of the customer service I receive from staff, never because of it.

Ironically, a positive, easy experience with Freeserve may actually improve my view of Dixons. But brands which are built on customer service should think very carefully before venturing into the land of ISP.

There are financial benefits, but there are significant risks too. If you’re not sure what I’m talking about, just say the word “trains” to Richard Branson.

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