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If you Google VoIP save money, there are a million hits. There is the article, "How to Save Money with VoIP Service" with 5 lame tips. VoIP News has one titled, "15 Ways to Use VoIP to Save Money During the Downturn", that lists ways to use different vendors for differing free services based on VoIP. VoIP News has another one which asks, "Will VoIP Really Save You Money?" The answer of course is yes.

Where does VoIP save you the most? Inter-office dialing, In-State calls which cost more than inter-state calls, and international dialing. But the key for Hosted PBX isn't about cost savings. It's about business productivity and efficiency.  It's about Business Continuity.

In a new article by FreedomVOICE, "9 Ways to Slash Phone Costs and Increase Productivity", the push is to a distributed workforce via tele-commuting, tele-work, or virtual office space. And that doesn't mean permanently. What if the receptionist has a sick kid? If you had a Hosted PBX set-up, in many cases, she could still work from home and the office does not experience a disruption. That's a productivity gain. Isn't that better than saving money?

Software-as-a-service (SAAS) is the new buzz in 2009. Salesforce.com hit a $1B in sales so its the poster child. Google is the other golden child of SAAS pushing is Apps and Gmail to businesses. For me, even hosted email is SAAS.

I am a referral agent for IKANO who is a Google Apps aggregator. , I am having trouble selling service providers on moving to Gmail and Apps. The overall ROI certainly makes the migration appealing, when you take into account Postini anti-spam licensing, server lease, power consumption, collocation space, email server licensing costs, maintenance and support. Seems like the ROI would make it a slamdunk but it is not.

Top 3 Reasons its hard to sell Google Apps:

1. FOG
2. Control
3. Change

FOG is fear of Google. For ISP's, Google is a competitor. Not really, but techies seem to find bogeymen behind every door. Which leads to reason two: Control. Techies have to be able to see the box (server). I call it humping the box. But the service providers have to have total control over the server or they can't sleep at night. Afterall, they are techies, who can run a server better than them? However, if you want to make the transition from techie to businessman, you make decisions based on what is best long-term.  Hey, Nuvox moved to Google Apps - and uses it to get appointments by telling every prospect: "We are partnered with Google. Can we meet to talk about that?" Appointments up 25%.

And finally the change thing. No likes change, especially when we have so much going on around us. It's the same reason that businesses are taking so long in the sales cycle - fear of change. But making No Decision is still making a decision.

You will hear other objections like:

• I just bought the server
• I just upgraded to version 0.7.1.1.1.3b and paid for it.
• I just re-cast my Postini contract

The servers can be re-used for something else. The sunk cost on the software can probably be re-claimed by the move to Outsourcing.

Today, I was talking to a salesperson for Hosted Exchange. We agreed that there are big obstacles to people buying into hosted email - whether Exchange or Gmail.

1. Change
2. Headcount
3. ROI

Again the fear of change is number 1. No one wants to make a decision for it to turn out wrong. No one wants to make a decision because CYA right now may mean you keep your job. But in some cases, making the decision could save your company because SAAS is a cost saver in many cases.

This leads us to Head count. An IT manager isn't going to move to SAAS right now because he will lose the budget justification for his head count (number of employees in his department). Maybe Tech One-Twenty spends only half a day each day on email issues. If you outsource it, what do you do with Tech One-Twenty? He can start working on priority projects or long term initiatives (if he has the skill). Likely, he will need to be let go - and someone has to pick up his half-day of work. Dilemma.

Finally, there is the ROI (return on investment). In some cases, there may not be a return enough to make the move. Even calculating the total cost of ownership (TCO) may not be enough if there is an IT staff.  But if the business doesn't have an IT staff, then moving to SAAS should be a no-brainer.

So how do you sell 40M paid mailboxes on Zimbra? One small business at a time. SOHO and every business with 50 employees or less. Or businesses with old servers or software (like Exchange 2003).

We did discuss that the customer acquisition cost is large. If the sales cycle is 6 or 7 months, a sales person is spending about 4 hours or so on contacting the client to get to the close. then maybe another 3 hours to demo, propose, paperwork, and survey. Provisioning is about 8 hours. So 100 email boxes is costing you 15 hours of labor. At $25 per hour average for a $50K salary, that's $375. But it is really about $488 when you consider that salary is only 70% of it. If you move them to Gmail/GApps the profit is $10 per user / mailbox per year. That's $1000 from $488. That doesn't include ongoing support costs. Just something to think about. 

If you are a carrier or a Master Agent, do you need more agents or do you need to give a lift to the ones you have?

There's a sales management theorem that when you use Pareto's Principle, you should spend you time with the Top 20% of your sales force not the bottom 20%. Why? Because the people bringing 80% of your sales are the ones you want to keep happy. Also, the more efficient and less bumpy you can make the sales process for them, the better for all the sales team, but especially the top dogs.

If you have a bunch of agents who signed up, what are you doing with them? Is your Channel Manager talking with them? What's he saying? The more you know about their business, the bigger the opportunity for you to actually work together.

Knowing the goals and strategy of your agents can help you target training, leads, case studies, white papers, and tips to them. The more relevant, the better.

Right now, I would be looking to add value to my agent channel. How?

1. Seminar with a tax specialist right now.
2. Seminar with a Financial Planner about IRA and the market
3. Seminar with a sales trainer for improvement in Consultative Selling

What? None of this has to do with telecom, you say? No kidding. But it shows that you value them as business people and want them to be successful. Sure. You could give them more webinars on MPLS or whatever the new acronymn is for cloud-based WAN connections, but are you really adding value? Do you know the Kawasaki 10-20-30 Rule? Do you survey your channel anonymously to get feedback on any training you give -

• one week later what do they remember;
• was it valuable time spent;
• what can they directly apply;
• any clients in the database that might be a fit now?
• do you know how to pitch the service/product?
• do you know who we target? and why?
• have you looked at your notes since the call?
• is working with you "easy & enjoyable"?

A couple of years ago, one carrier asked me what they could do to make working with them easier. Since I am rather direct, I answered explaining about the poor follow up. Sadly, it was never addressed. If you are going to drop the coin on a channel, don't set it up for failure.

As we head into Channel Partners Expo in Vegas, carriers and master agents will be looking for new agents and visiting with old ones.

• What are you specifically looking for in your next agent?
• What questions will I ask a prospective agent?
• Are we a quoting machine or lowest priced carrier?
• Does the agent already have a carrier like us? If so, why is he looking?

And I know some of you are thinking, "We just want to sign up agents!" Sure, but it isn't about numbers. It's about Enrolling partners into your Program." (or maybe it is just a Numbers Game - lots of agents, thousands of quotes, hope for the best, why aren't they selling my stuff?).

Right now, wholesale VoIP providers are looking for me to help them train their customers to sell more SIP trunking and Hosted PBX. They want their client ITSP's to be more successful. If you are a VOIP company and you have 75+ partners, is that a successful channel? Not unless 15 of those partners are selling a deal every week.

I'm not saying don't add new agents. I'm saying look at your current agents and figure out how to make them more successful so that they can create more revenue for you. It is a partnership after all.

"Nearly one-third of VARs (value added resellers like Cisco certified IT shops) are planning to grow their businesses in excess of 15 percent in 2009", according to CRN.

The most interesting quote was not about the importance of Managing Cash Flow or How Goal # 1 is Finding new busines, it was this quote:

"When we asked them to rank what is most critical, they said "finding new business." Note the word "finding" because these are not organizations waiting around for Microsoft or HP to send them sales leads. Growth-oriented VARs in a down economy go out and find new customers."

Good agencies have a Lead Generation system in place. But one thing Agents ask for from their vendors (carriers) is Lead Gen.

The other point was keeping "up with changing technologies. With growth VARs, this doesn't mean perusing a vendor's latest offering -- it means they are in front of customers with Oracle's new $750 express database application before the local rep checks in to see if the marketing materials have arrived."

Johnny Hustle, like never before

Agents are paddling like a duck in a pond to stay afloat. Always have been, but moreso now.  Many companies are wondering how to get Agents to sell their services. (I get this daily). Here's some thoughts:

Agents spends all day just running their business and keeping customers happy. To add another vendor and/or service, the agent has to take time to learn it and  evaluate it. Then figure out where that service and vendor fits into his portfolio.

A carrier doesn't realize how much they are asking of the Agent.  Time is money and a lot more. To maximize the time and effectiveness, vendors should look at the top 5 ways to improve agent training.

1. Have good training available online as video and as a podcast. (As a downloadable MP3, agents can learn while traveling).
2. Create a Clear, Concise message. Most don't have this. A good Positioning statement, USP, or why choose Carrier A over B.
3. Case studies by verticals helps agents figure out where the service fits.
4. ROI and TCO calculations help sell the service.
5. Specific sales examples, like Agent X sold Service Y to Client CDE because CDE needed Z.  (What was the sales trigger?)

Make it clear, concise, and memorable.  Case studies and sales triggers are like story-telling, which is the most viral way to get your message across.

Dave Rusin, CEO at AFS, has some advice on his blog for agents (or on xchange). I agree with this one point: "If I were an agent of any sort, I would focus on carriers that have competitive sustainability." However, when Mr. Enterprise CTO wants a quote from CLEC ABC, then as an agent we get one. That's how an agent stays in the picture.

Dave, you have never been an agent - and I would suggest that you haven't been an outside salesperson in the current climate. DSL has created pricing confusion in the marketplace which has only been mitigated by falling IP prices from the likes of Cogent. This statement baffles me: "I have yet to have an agent show us a model which beats a direct sales force." Really?

I have seen agents sell successfully for fixed wireless companies and fiber companies successfully. Certainly better than most sales teams I have seen. When I compete against direct salespeople, who drops the price first? Not me. I need the price to be higher so I get paid more!

"My opinion is that the sales agent of the future is not an agent but a partner." Yeah, agents tried that but our "Partners" screwed us over. That's why there isn't any loyalty. Oh, and it was the guys the own the fiber that did the screwing because of their I OWN Everything Mentality.

But if you want help developing a sales channel, I would be happy to help develop one for you as a Consultant.

I blogged to my clients this morning that they need to be spending their time on customer retention as much as on acquisition. Then I got my Monday morning email that stated:

CUSTOMER RETENTION - If you aren't talking to your customers about renewing their contracts - trust me the Direct Sales force of Qwest, Verizon and AT&T ARE.  All three carriers are using their Direct Teams to mine Agent accounts.  -  It cost more to get a new customer versus maintaining and growing your existing base.


HOW TO UPSELL IN A DOWN ECONOMY - Agent Quote - " If I'm not helping my customers with all their telecom needs, then someone else will."   With it being the start of a new year now is the time to set up appointment with your top 25 customers and discuss their business and how you can help them.  Don't assume they don't do conference calling because almost every business does these days.  If you aren't talking to them about it, someone else will.  Same holds true with wireless, disaster recover, data back up and collocation.  Yearly audits are essential.

Discussing the economy on telecom sales today in some parts of the South, I was led to the following: Bell-Head versus Net-Head. What, you ask. Another way to ask it is Why can some folks sell TDM/POTS/PRI and why can some people sell VoIP?

VoIP is just an application, like UC, voicemail, and conferencing. That's Net-Head thinking. It's just eye pee!

VoIP is an unreliable step-sister to POTS. That's Bell-Head talk.

According to one client, voicemail-to-email is the killer feature for VoIP. But there's the question: What motivates a businesses to move to VoIP?  It's not price; it's Productivity.

How do you sell VoIP? Not like you sell POTS or PRI. It isn't the same. TDM is all plug-n-play in a similar way. VoIP requires a consultative approach.

• What are you doing with your PBX?
• Where are your offices, your people?
• What do you do with the phone system?
• What do you WANT to do with the phone system?
• Do you need a mash-up?

The only thing close is Centrex in TDM world -- and the Bell-heads didn't sell that  very well either. It was too complicated. TDM is transaction.

IP is possibility. There are no rules in IP. It's not black and white. (That's what drives the Bell-heads crazy!) 

If you want to sell VoIP, you have to be a Net-Head. It's all about the possibility.

Why doesn't it get easier?  Why is it so difficult to get agents to sell your stuff?

Over the years I have worked with many VoIP Providers. A good chunk of my consulting is on The Channel, Referral Systems, and Sales Compensation.

There are a number of landmines that can destroy a relationship with an independent sales agent. These include but are not limited to:

1. Your quoting system (or time to quote)
2. How you track the sales and provisioning process
3. How you track Compensation
4. How you handle agents calls / issues / sales / payments

All of these mines have subsets as follows:

• What is your number porting process like?
• What is your training like for customers? for Agents?
• What does your marketing collateral look like and say?
• Issue Resolution

It is no small thing to acquire an Agent. You are asking someone to spend the effort to:

1. examine your service offering
2. negotiate and sign an Agreement
3. Learn all about your service offering to the Comfort Point
4. Now go market & sell it

It is similar to buying a franchise agreement. Foremost, you are asking for the Agent to trust you and to lend his reputation to your company and its services. Big Step.

You have to ask yourself: Why would he take a chance on me? Here are some things for you to think about:

1. Do you have a clear USP?
2. Do you sell to Verticals with a concise ROI or TCO?
3. Do you know who your best customer is and why?
4. Do you do any marketing?
5. How much time and effort can I give each agent to get off the ground?
6. What happens if he sells something?
7. What systems do I have in place for that?
8. Will those systems Scale?

Some companies have a Referral Plan now. (I won't even call it a system because it isn't.) What does it consist of? Mentioning that free month if they refer someone? WOOT! Yeah. That won't cut it. A System is a consistent process that involves a plan, a goal, and how to get there. If you want a Referral Plan to work, you have to work the Plan (as they say in Amway). By that, you have to remind folks that you have it in creative, mentally sticky ways. You have to even give them a script on what to say or a coupon or email link to send to their family and friends network. You have reward them tangibly and thank the best referrers publicly. Then start all over again. (it doesn't happen automatically).

Now back to the Agent Channel that you want selling your VOIP Service. Why not just hire a Sales person? Too expensive, right? Too time consuming? Don't want to manage a sales guy? These are reasons that your channel will fail as well. Imagine spending money, time and effort on people you have Zero Control over. Imagine them forgetting to propose your services for months, then call with a White Elephant and not close it. And disappear. Lots of work; little return. Welcome to the Channel. The Channel is a case study in Pareto's Principle - the 80/20 Rule. About 80% of the sales will come from 20% of the agents. About 80% of your time will be consumed by the least productive 20%.

Stay tuned... more to come

I wrote about a typical telecom sales situation about a week ago. Khali Henderson, editor of Phone+ magazine, has an editorial that talks about this type of scenario in the Channel. The conclusion of the story happened yesterday when the client called me to ask me to meet the direct AE's rate and send him a contract. My best Indirect rate is $1500 per month higher than the direct rate. Same company. Go figure. This AE just gave away $18,000, which doesn't seem like a lot, but how many deals like that can a company take? There should be a Pricing Floor.

Some carriers have Rules of Engagement between Direct and Indirect. It's just paper. What's the punishment?

A Cisco VAR just sued Cisco over breach of contract. Cisco took a tagged deal that the VAR brought in and handed it to its other partner, AT&T. It cost Cisco $6.3M and a change to the VAR contract. These lawsuits take years and mucho money so they will be rare, but it goes back to my question: What's a Partner Worth to the carrier or vendor?

AT&T spends millions advertising its partner program, but can't bother to show up at Channel events. Mixed message much?  Verizon has thrown many agents out of its program over the years. Qwest just revamped theirs again.

I started out working with a BellSouth agency (I have never had a direct relationship with BellSouth or AT&T , which is something they can't get through their heads). BellSouth would change the compensation plan regularly. But agencies cannot change their own business plans so easily or so quickly. It sometimes feels like folly.

This is a business where you have to trust your vendor even when you know your vendor is going to trample you at some point.

UPDATE: While the Direct AE did quote way lower than me. However, after speaking with the client, they actually went with a reseller.