October 2009 Archives

This PowerPoint presentation represents the outline of what my panel was going to discuss at Broadsoft Connections. We were going to make 3 points about Marketing a Profitable UC Bundle: 

1. Does Bundling Work;
2. How do you sell it;
3. What makes a successful bundle

Does Bundling Work? It depends. Are you using a Bundle for Customer Retention or Customer Acquisition? Our panleists included to ILEC's and 1 CLEC competing directly against one panelist.

The big point to make is that if you add one component sold separately between 15-20% of your customer base will uptake that new component (if marketed well). However, if you add it to a bundle, many more folks will take it. Albeit at a less margin, but more overall revenue.

Everyone was in agreement that the only way to sell a UC Bundle was face-to-face. A sales force - direct or indirect - could sell it. The hardware salespeople have a problem transitioning from selling a box to selling the Invisible. But training can fix that.

Upselling an existing bundle customer can work via tele-sales to increase stickiness and ARPU.

What makes a successful bundle? No one is sure yet. The only point that could be made is that it needs to be simple. Small business wants the pain of technology removed from their business life. And Broadsoft's 180+ features, Xtended Apps, and the XML on the phone are an infinite list of possibilities that will confuse the sales team let alone the consumer. Bundles should be created to attack a market segment, niche or vertical.

Atlanta based Telecom Master Agency announced at their Annual One-on-One event that they would be providing Commission Insurance. The details are coming (Brad Miehl said in November), but it looks like Evergreen may get a new look. Is this more Master Agency 2.0 innovation? Looking out for the agent more than ever.

UPDATE:

We at MicroCorp want to make sure there is no artificial ceiling in the amount of carrier business you entrust under our care and management. You should have complete confidence that you are going to be paid no matter if you are placing your first order or your one thousandth order with us. The scale of your business with MicroCorp should not matter and it is up to us to remove any risk as your base continues to grow. Even if this risk is highly unlikely to ever even occur.

Therefore starting today, we will be launching our Commission Assurance Program™. MicroCorp will be the first and only Master Agency that gives our channel the legal protection and ownership of their MicroCorp commissions in the unlikely event the company experienced any type of financial distress that puts your income stream at risk. In other words, if MicroCorp went out of business, the Commission Assurance Program™ would kick in and your revenue stream would be protected. Therefore, by having this program in place, we effectively eliminate the need of you having to diversify your revenue outside of MicroCorp simply to mitigate this type of risk.

Effectively, agent commissions are insured against loss. Nice. I have to call my Channel Manager Van Wender now to sign up for this program.

At Broadsoft Connections this morning, Michael Tessler spoke about it being all about apps and the Customer Experience. (Has he been reading my slides?)

One reason IP Telephony grew (according to Dell'Oro) 7% to $737M in 2Q09 is because IPT lowers the cost of the capital expenditure (CAPEX) and it also lowers the cost of maintenance and support.  

As an industry we have to move away from talking cost savings to a discussion about value to the customer experience. Efficiency, Productivity, Privacy and Security will be key topics coupled with TCO and ROI studies.

The User Experience must be about usefulness, ease of use, reliable and enjoyable. (Something that most folks would not associate with telcos.)

You need to take the technology out of the way of the user. If you can do that, you win.

Another point Nicholas Carr made was that IT and telecom are colliding. A new landscape is coming. 

My thoughts immediately went to GV. Who will be replaced by Google Voice?

• Who is the commodity?  
• Who will add Value to the User Experience?

People will pay for easy and reliable. (Not all of them will, but more than enough will. Remember that Cbeyond only has 50k customers and PAETEC just about 100K). 

Stop selling on price. If you aren't talking TCO or ROI, you are selling telecom, not apps. 

PBX and software companies have had to stop thinking in terms of product and start thinking in terms of Managed Services deployed over the Network. If they are thinking about it as SAAS, should all the Hosted PBX folks be looking at Voice as just another app delivered over the network? Voice is just an app!

Nicholas Carr, author of The Big Switch, was the keynote this morning. He spoke about Computing becoming a Utility. Cloud computing is all about computing becoming a utility to be delivered like electricity -- and how this will change the shape of business.

My thoughts on "The Cloud":

Is Information Technology (or computer architecture) too challenging and or too much overhead for many businesses? 

Cloud computing and Virtualization are just new names for Managed Servers and Hosting and Managed Services.

When data shows that businesses are using cloud services, the term is so general (much like the term UC, unified communications), that it includes data storage/backup, managed email, web conferencing and hosting. (think about that the next time you see the data).

Moore's law has outpaced Grove's Law, Carr showed. Until now. Supposedly, ubiquious broadband is catching up to computing power.

More thoughts to come from Broadsoft Connections...

 

I am at the Broadsoft Connections event with 775 other folks piled into the Phoenician. Gorgeous hotel set at the foot of the mountains in Phoenix. Staff is nice and the suite is sweet.

I'm speaking tomorrow on a panel with Bell Canada, RoutIT, and KPN. The topic is how to build and market a profitable UC bundle. It's funny because my panel is in the customer retention market (ILEC's) and much of the audience is in the customer acquisition game.

Folks from  PBX-Change, Nuvox, Paetec, Callis, Simple Signal, Telovations, Cypress Communications and Digitel (of Atlanta) are in attendance. Lots of partners too. Polycom is here in force - over 30 people. Cisco, Aastra, Audio Codes, NEXTUSA and ADTRAN are just a few other the partners I met tonight.

Garrett Smith blogs about a new patent that was awarded to 8x8, parent company of Packet8 (and holder of 74 patents on VoIP and communications technology). It's about the automatic connection of an IP device to an IP-PBX.

You would think that by this time all the patents covering VoIP would be done. I will say that VoIP Providers need to have an attorney examine the patent for any infringement.

Steve Smith, CEO of Equinix, is excited because he just bought Switch and Data. From a letter he sent:

"Today, we announced our intention to acquire Switch and Data in a transaction valued at approximately $689 million of equity value which will further extend our leadership position in North America. The transaction will allow us to serve you as the most comprehensive data center services provider for your global online business needs. The transaction will include 34 data centers in 22 markets located in the United States and Canada and will extend the company's presence to 16 new markets across North America, including Atlanta, Denver, Miami, Seattle, and Toronto. The acquisition will add more than one million gross square feet of data center capacity, bringing Equinix's total global footprint to 79 data centers in 34 markets and more than six million square feet of capacity across the North America, Europe and Asia-Pacific markets."

Consolidation. Probably a good time for it in this space with all the buzz around Cloud, Virtualization, and the need for secure, reliable, redundant data centers.

All the talk about Hosted VoIP being on the rise, blah, blah, blah. Meanwhile, Paetec is on LinkedIn "hiring PBX (Telephone Equipment) Sales Reps for our Raleigh, Nashville, Memphis Offices." For the Allworx product line, I would imagine.

KeaneTel, a Master Agency, is advertising Training on ShoreTel IP PBX Sales. "This is the first of four Training Webinars on ShoreTel by KeaneTel."

All the talk about Hosted PBX and yet premise based PBX sales still seem to be doing alright.

Could be all the FUD. Could be the weekly outages. (Yesterday, it was reported on listservs that Level3 and Cogent had an outage. Level3's outage in Atlanta seemed to even affect VoIP.)

Outages seem to get a lot more press today, but if people are in The Cloud for apps, email, VoIP, data, etc. AND the Internet Access is down, well, you have to consider that. Redundant links - for everyone including the user.

Recently the FTC decided that there should be more transparency in blogging (and other new media platforms). So as a blogger I have to spell out my relationship with anyone I write about. 

I started as a BellSouth agent in 1999. My disdain for AT&T comes from having to deal with their poor attitude towards agents -- and paying proper commissions. So when I am beating on their head, it's because they are, in my opinion, horrible to deal with as  company and as an agent. It's all about revenue and not about relationships at all. Plus, I can't tell you how many times AT&T has tried to get me to either change what I wrote or to stop writing about them altogether.

Verizon - I finally stopped sending them a check this month. My POTS line was just moved over to a local Broadsoft based provider, PBX-Change. My CallVantage line is porting over to FreedomVoice. I have consulted for both these companies (as well as numerous other VoIP companies, CLEC's and ISP's - that's what I do). Verizon is premium priced and inflexible. As an agent, I don't even try to sell their services; I go through resellers.

Aastra was kind enough to give me a demo phone this year.

Microcorp is one of the Master Agencies that I run my telecom circuits through. The others are JBS and NCG. I have direct relationships with a few carriers like Point1/Unipoint, Network Innovations, and a few others.

I'll try to be clear as we go forward. (That fine of $11000 scares me, because defending it would cost even more).

Bandwidth.com just disbanded their agent channel. Other VoIP providers have done that as well.  And I hear some complaints about the cable company indirect channel programs.

The problem isn't the Agent Channel. The problem is the Channel Program design. 

You have to design a program that will work, folks.  You have to train your agents on the benefits, how it works, how it will be implemented, and how to sell it. You have to have a USP or marketing message that the salesperson can grasp and re-use. 

You can blame the agents, but most times companies don't spell out who the target prospect is and how that prospect will benefit. VoIP is not a replacement service. And you VoIP companies have over 1000 competitors all saying the same thing. It's like trying to differentiate between CLEC integrated T1's.

There's is also the whole compensation issue. Maybe you aren't paying enough to make it worthwhile for the agent. Again a VoIP sale is longer than a TDM sales and there are inter-operability and implementation issues to deal with, especially for PBX replacement.

There's a bias towards having a direct sales team in telecom. That bias is due to the huge expense - the office space, desks, laptops, utilities, cell phones, benefits, salaries and management structure. If you examined your direct team the same way you examine your indirect channel, you'd likely fire that division as well. Personally, I would put up Agents against AE's any day. I can pick 5 and outsell your direct team all day, any day - with less churn.

By the way, did you examine the channel sales process? How hard was it to get a quote or a sales engineer or a contract? What was the time from contract to install to commission check? All this will play into it. You look at AT&T's Channel sales process and it's just too freaking painful. 

In Internet Marketing, you can analyze the sales process to find out where the hurdles are, where the shoppers drop out. Is there a process in place to figure out the sales hurdles in the physical world? Do you track any of it?

I've been in the VoIP space since 2004, so many companies have imploded; not delivered; messed up; changed things again and again. With this kind of history, it gets more challenging to find agents willing to bet their business on it.

I'm in Atlanta speaking at the Microcorp One-on-One event about Trends in 2010. The three trends that I see for agents are the following: Applications, Quality of Service (QOS), and Mobile Broadband (MBB). But they are kind of inter-dependent. Ubiquious broadband leads to innovative uses and applications. Applications like on smartphones lead to a greater need for mobile broadband networks.

Mobile Broadband is growing. Smartphones are replacing cellular handsets. Social networks are moving to mobile devices so people can Facebook and Tweet. RIM's Blackberry brought us mobile email, but it is a standard on many phones now. Netbooks and data cards are presenting the US cellular companies with some fits. They like the additional revenue, but have to keep dropping billions on the network backhaul and capacity upgrades. (And another $45B+ on the upgrade to LTE/4G).

All this means that there are new uses for the mobile broadband, like the Kindle. Sprint's Wispernet allows Amazon to instantly download books, magazines, newspapers and blogs to Kindle devices. Machine-to-machine devices can utilize the cellular data network to provide connectivity for ATM machines, security cameras, and a host of other devices that need to communicate with a NOC or remote server.

All of this is a cycle of applications driving network usage. Ubiquious broadband driving more apps. It's one reason that the FCC needs to maintain open network and Net Neutrality guidelines in place.

Applications - like email, databases, office suites, CRM - are creating a demand for managed services, such as an outsourced IT department. In addition, businesses are looking at the Cloud - moving applications to a data center for redundancy, security, and availability - as a way to save money and stop worrying about the IT department. With applications being delivered in the Cloud or by way of SAAS or even Virtualization, Agents have a chance to offer more than just Internet Access or WAN circuits, like private line. Agents can sell Layer 2 to Layer 7 - pipe to apps. It's a way to get deeper into accounts. It's a way to offer a complete solution. It's a way to deliver on the label of Trusted Advisor.

Applications are driving sales. Voice and email are just the primary apps. Business critical data is also driving mobile broadband. Ubiquious broadband is allowing for innovative ways of accessing data. The problem becomes reliable access to the data. That's where Quality of Service comes in. QOS on the WAN is what is needed to access data reliably and quickly. The MPLS trigger is the Class of Service reliability and prioritization of data over the network. This is paramount for businesses running a truly converged network with video, database, VoIP, email and Internet riding the same pipes. WAN Optimization is selling due to the cost containment and the performance enhancement. Big bang for the buck.

So the agents can sell mobile broadband, applications via Virtualization or SAAS, and add QOS to the WAN to provide reliable access to these business critical data.

My buddy, Derek Thompson, just started at Fishnet Security. Besides peddling Bluecoat and SonicWall Managed Services, he is also selling WAN Optimization. While I have heard of this, I had no idea what it was or how it worked. So Derek invited me to sit down with Doug Kruger of Riverbed. Doug explained it simply enough.

One reason companies consider WAN optimization is if the company needs more bandwidth. It may not need more bandwidth, it may just need to better utilize the Internet Access it already has.

Multi-location companies sometimes have servers at each branch instead of consolidating the servers in one data center. This saves money on maintenance and storage, but in some cases may mean a bigger pipe to access the servers in real-time from the data center.

By consolidating servers into one location can save on manpower, maintenance, and data storage/back-up costs. This is also the sales trigger for Virtualization and Cloud Computing. Save on hardware, labor and storage.

TCP and latency are other reasons that companies buy bigger pipe, when perhaps they could just optimize the current WAN connections (or change to MPLS pipes instead of DIA or dedicated Internet access circuits at each location). TCP is not the most efficient protocol, but it works, just sometimes creating excess packet traffic across the WAN.  Latency for real-time applications is also a real problem across the Internet. Lastly, many applications, including Microsoft Office, create excess traffic on the WAN when any document is being opened. 

One of the ways that companies like Riverbed optimize the WAN is to eliminate duplicate data traffic. It's called De-Dupe and the effect is to eliminate up to 80% of traffic across the WAN. WANO technology usually will work on eliminating all the excess packet traffic on the WAN, which will usually result in a bandwidth savings. 

Riverbed tweeks TCP headers to modify the TCP window sizing issue. The tech here gets beyond me and my discussion, but by modifying the TCP packet headers much of the TCP "noise" on the WAN is cut down. By diminishing the excess packet traffic from apps and TCP, WAN optimization technology is able to save a lot of bandwidth. 

Riverbed also works on application latency in a similar vein, by the mitigation of excess packet traffic from apps like Microcosft Office. The technology guesses what the application will ask for and deliver it all at once instead of in 20 different packet streams. Many Fortune 5000 companies use WAN Optimization due mainly to cost cutting force on them by the economy. Data is business critical, so any way that you can save money on the WAN is a good thing.

I'm in Atlanta at the Microcorp event to moderate a round table for agents centered around sales and marketing. The title is Personal Branding. How do you promote your personal brand? 

When selling replacement commodity items, your brand may not be that important. However, when using the Consultative Sales approach or looking for the sweet spot in the role of Trusted Advisor, it is about your knowledge, skills, and reputation. In a nutshell, that is your brand.

A brand is the 1K of space in a prospect's memory that contains everything they know or fell about you or your company or your service. In many cases, that 1K is empty because they have no idea who you are. (What would they find if they Googled you?)

Your brand online is a summation of what the search engines contain about you (or your company). 

There are many places today to build a brand online: your website, blog, LinkedIn, Facebook, Squidoo, Twitter, Slideshare, YouTube and a host of other platforms. You see, before you had to take out an ad or a billboard; today, that ad or billboard can be online in the 21st century printing press of the Web and its publishing platforms (social networks). The whole revolution that we see online today is due to tools, software platforms, and user interfaces that created what is referred to as Web 2.0. Web 2.0 allowed for User Generated Content (UGC) by making it very easy for a consumer to add content / comments / thoughts to various websites, like TripAdvisor, Amazon, BizRate and others. 

That was the genius of Web 2.0. Social networks just took that a step further. But all of this means that it is easy for people to comment on your service or business. It's also easy for you to tell your story. 

Personal Branding starts with you telling your target audience the story of what you can do for them. How can you help their business get productive or efficient? How can you help them communicate to their customer better? Tell those stories. And you have a host of platforms to tell them on. Get started!