Best idea I have heard from Vonage yet: make installs free with service contracts

I've been saying for some time now that free-standing VoIP providers such as Vonage really need to look at optional service contracts much like their cellular counterparts do.Now, a key figure at one of the most influential of those providers is indicating that yes, this is a real possibility.

I've been saying for some time now that free-standing VoIP providers such as Vonage really need to look at optional service contracts much like their cellular counterparts do.

Now, a key figure at one of the most influential of those providers is indicating that yes, this is a real possibility.

Speaking at Citigroup's Media and Telecommunications Conference in Las Vegas last week, Vonage Chairman Jeffrey Citron said that "one of our options (to lower acquisition costs) is to use contracts in exchange for professional installation."

I wish I could have been there to hear Jeff say this, but alas I was crosstown as CES. 

I think this is a good idea for several reasons. If a prospective customer is wavering about VoIP because he or she is not sure they could handle the installation by themselves, such a service contract with installation included could be a very attractive testament to the fact that Vonage will hold your hand.

Given such customers likely are new to VoIP (but certainly not new to cellphone-like service contracts because nearly everyone has a cell) that shouldn't be a big hurdle.

I would, however run those contracts a year rather than two years, and be kind of light on early termination. Maybe a flat two-month termination fee rather than pro-rated.

Also, and this is a big ALSO- I would structure these service contracts so that subsequent service calls- such as diagnosing a possibly faulty router- is free.

In short, if Vonage wants to bundle onsite installation with service contracts, the model I just cited would probably work well. But if they get greedy and muddle the deal with all kinds of small print, then I would watch out.

The opportunity is there for you, Vonage. Up to you to seize it. 

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