When I first joined the conference call service industry 14 years ago the average cost of a conference call was around $.20 per minute per participant, today it is around $.07 per minute and it is fore casted to decline to around $.05 per minute average by the year 2013. What has driven this decline and are conference calls simply a commodity that should be judged on price alone?
The decline in the cost of conference calls has been driven over the years by competition in the industry. The lowering of the telecommunications costs associated with providing the conference calls has allowed conference call service companies to lower their rates in order to capture business from the competition. Also, the conference call service equipment has evolved over the years and the price of the equipment to provide conference calls has also come down in cost as the technology has gotten better. Like the long distance call itself, as the costs have declined and competition increased we have seen a constant pressure on conference call service companies to deliver conference calls at an ever decreasing revenue. Ultimately, as the prices continue to decline some of the service associated with conference call services will suffer unless people recognize that conference calls are not a commodity and are willing to pay a little more for the service part of it.
I have detailed in other blog posts about all that goes on behind the scenes at a conference call service company, so I won’t go into great detail here, but here is a quick summary. First, you need high quality telecommunications connections from a large carrier that provides redundancy in their network or you risk quality issues and outage possibilities. You then need to get the best conference call service equipment or you will not get the best results. Your own network needs to be constructed with fail-over and back up contingencies. And finally, you need to provide a level of customer service that provides your customers with a good customer experience. All of these things cost money to the conference call service providers. I don’t think that customers will be happy with a conference call service that has quality issues or doesn’t answer the phone when they need help or has an outage because the telecommunications carrier they use had a lengthy outage. So, customers want to pay as little as possible for a conference call but certainly do not want to have an inferior service.
So here we are in the conference call service industry. Given today’s available telecommunications rates which are not going down any more, the price of the conference call service equipment which is also not declining and the cost of personnel and I think you can see that the cost of the conference call is approaching the point where it cannot go any lower without sacrifice. And I think if you ask the customers you will find that although they like to save money, a conference call is important enough to their business that the quality, reliability and service really do matter. Conference calls are not simply a commodity.