Value added services is a term that is used to refer to service options that are complimentary to but also ancillary to a core service offering. The term is utilized widely in a number of industries, most notably telecommunications. Value added services are often introduced to customers after the client has purchased the core service that these ancillary offerings center around.

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 as an added service that is available for a modest additional fee. The actual pricing structure for value added services will usually depend on whether the providers sees the services as amenities that are intended to create a stronger rapport with customers or as an additional revenue stream.

One of the easiest ways 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 of multiple attendees to gather into a common telephone conference. However, a number of non-core services are 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 another attendee are routinely offered. Other non-core services such as transcriptions, on demand dial-in formats, and audio recordings also help to entice customers to sign up with a particular conference call provider. From this perspective, value added services can be viewed as a means of attracting and holding onto clients in a very competitive industry.

Along with telecom services, it is not unusual for many businesses to offer some type of value added service as a way of standing out among the competition. A discounted dial-up Internet Service Provider may offer two or three email addresses to a subscriber, whereas similar companies may provide only one. A cleaning service may toss in a free drapery cleaning if the customer orders carpet cleaning services for three rooms. Pesticide services may offer customers a limited number of free inspections in exchange for contracting their services for two or more years.

Value added services provide advantages for both the customer and the service provider. Customers have the opportunity to receive something above and beyond their basic needs. Providers benefit from the increased rapport with the client that is likely to translate into a more consistent flow of revenue. These additional custom services often cost the provider little to nothing to provide, yet have the potential to enhance the growth and the reputation of the company significantly.