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What are Value Added Services?

Malcolm Tatum
By
Updated May 16, 2024
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The term "value added services" is used to refer to options that complement but a core service offering from a company but are not as vital, necessary or important. This term is used in many industries, most notably the telecommunications industry. Value added services are often introduced to customers after they have purchased the core services around which these ancillary offerings are built.

Costs

In some instances, a value added service is something extra that is provided to a customer at no additional charge. At other times, the ancillary service is offered to an existing customer for an extra fee. The actual pricing structure for a value added service usually depends on whether the provider sees the service as an amenity that is intended to create a stronger rapport with customers or as a source of additional revenue.

Telecommunications Example

One of the easiest ways for one to understand the concept of value added services is to look at the nature of audio teleconferencing services. The core service provided with an audio conference call is the ability for multiple attendees to participate in a single telephone conference. Several non-core services also can be offered to complement the basic conference call, enhancing the desirability of the core service.

With audio conferencing, value added services such as an operator-conducted question-and-answer session, polling services and the ability for the moderator of the meeting to initiate a sub-conference with specific attendees are routinely offered. Other non-core services such as transcriptions, on-demand dial-in formats and audio recordings also help entice customers to sign up with a particular conference call provider. From this perspective, value added services can be viewed as ways to attract and hold onto clients in a very competitive industry.

Other Industries

It is not unusual for other types of businesses to offer some types of value added services to stand out from the competition. An Internet Service Provider might provide its subscribers with multiple email addresses or the ability to store digital files online, for example, whereas other companies might provide only one email address and no online storage. A house cleaning service might provide a free drapery cleaning to customers who orders carpet cleaning services for a certain number of rooms. Pesticide services might give their customers free inspections at specific intervals in exchange for contracting their services for a certain number of years.

Benefits

Value added services provide advantages for both the customers and the service providers. Customers have the opportunity to receive something above and beyond their basic needs. Providers benefit from an increased rapport with the client, which could translate into more revenue. These additional custom services often cost the company little extra but have the potential to significantly enhance the growth and the reputation of the company.

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Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By anon993334 — On Nov 04, 2015

Value added services are considered the faster way to help Mobile phone users having no access to internet, VAS services enable them to access different service related to entertainment, sports, knowledge and many more.

By anon926334 — On Jan 18, 2014

I am new to value added services. That's why I browse the web to seek for an answer. So far, this article is the best in terms of explaining value added services. Basically, the examples in this article made me understand what VAS really is. Thanks for this information.

By anon305683 — On Nov 26, 2012

Nice explanation, but can you let me know what costs should be allocated to VAS products in the telecom market?

By anon115425 — On Oct 02, 2010

that's a very thorough explanation. Totally love it.

By Planch — On Aug 31, 2010

Thanks for this article -- I had looked up an article on value added services on wikipedia and didn't really get it, but this one cleared it up for me. Thanks!

By CopperPipe — On Aug 31, 2010

Although value added services can be tempting and make you feel cool, but a lot of times they can really cost you a lot of money.

I find that this is especially true for mobile value added services. Little things like web browsing, picture texts and ringtones can really jack up your bill.

So keep an eye on that especially when it comes to value added services in telecommunications -- you can save yourself a lot of money.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
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