Most CLECs have an extensive catalog of services. Maybe too extensive for the average sales person. Opportunities get missed.
What companies want from the consultative salesperson is someone who LISTENS, not just for buying signs, but about the outcomes the business needs and how the solutions will affect the business.
Cloud services are not just replacement services. Cloud changes the way information is stored and accessed. It many cases, cloud services mean a change in how employees work. Are you able to explain these changes? Will there be training? Is there online help? Will there be a project manager or point person before and after the sale?
"It's not enough to "connect the dots" between customer needs and your company's offering. You must also connect with the individuals who will be affected by your offering, and understand how buying from you will satisfy their personal needs, like career advancement and job security." Well said, Geoffrey James.
]]>Comcast opened a Cloud Services Marketplace, which sells cloud services like Carbonite data backup.
Apparently, cloud services brokerage is growing as Citrix just launched a program for cloud aggregators. There is even a referral and affiliate program with Citrix. I think this represents the cloud being like CLECs, "Please anyone sell my stuff!!! Please!"
Interesting tidbit, the global CRM market grew faster than other software and 40% of that market is SAAS, according to Gartner.
Rackspace has 50 employees devoted to the channel.
EarthLink sales dipped this quarter due to the sales cycle. "Our bookings in the second half of 2012 were soft as we saw extended customer decision cycles despite a growing sales pipeline that we've talked to everybody about. This caused the 2013 entry point and resulting financial guidance for this year to be lower than many of us had hoped it would be," according to EarthLink CEO. It demonstrates that hype is still growing, but sales are slow to come. I think the low hanging fruit is and will continue to be low cost, because integration, productivity and business outcomes are difficult to deliver, deploy, implement and show on a spreadsheet.
SIDE BAR
Good article about the Year of Hell for a SAAS CEO.
]]>When a company sells direct, the messaging is aimed at the end user. The sales channel is pursuing customers. The company owns the customer - as much as a company can possibly own a customer. [Read this article about it!]
When you sell through a sales channel (like agents or VARs), your messaging is to the channel partner. The company is pursuing partners and making it stupid easy for the partners to sell and acquire customers for the both of you.
Obviously, there are companies with both direct and indirect sales forces.
I run into this all the time. Companies think a channel is the fastest and cheapest way to get feet on the street. It can be, but often, due to misconceptions, it isn't. And then the company has to re-boot its channel program.
The two primary differences between VARs and Agents are that Agents just sell, that's their business model. Get ink, get paid, move on. VARs have an existing business model, usually tied up around one or two hardware/software vendors. Everything else is ancillary -- including your awesome services that you think they should drop everything and sell. Most VARs are not a sales machine; Agents are, but Agents won't install or do support.
You kind of need both working together, which is the whole CompTIA Telecom group's plan.
It is very difficult to sell through the Channel if you have never sold the same products direct. You don't know the triggers, friction points, etc. You are letting the channel figure it out as you go. That's an expensive mistake.
Final point: there isn't a button to push to turbo charge the indirect channel. There are many factors involved in why channel partners sell one service or one vendor over another. Unless you have some exclusive service, the channel partner has many choices.
The best channel managers understand that when a partner quotes and sells your service, the partner is lending his reputation to you and he is depending on you for his paycheck. It's a risk. And it is amazing how many people don't get it.
]]>Is this a good move? Under Crowe in the last 5 years, it has been nothing but pain for customers and partners. Every acquisition was an integration nightmare. (L3 isn't alone in this but that doesn't mean they have to suck at it too.)
And during the Global Crossing integration, Storey was COO and President. That wasn't smooth either. And sales haven't been off the charts either.
"Level3 reported total revenue of $1.614 billion for the fourth quarter 2012, compared to $1.590 billion for the third quarter 2012 and $1.579 billion for the fourth quarter 2011. For the full year 2012, total revenue was $6.376 billion, compared to $6.318 billion pro forma for the full year 2011." [pr]
Pricing on bandwidth has dropped, but L3, HE and Cogent led the way with that. It might be a reason the revenue is flat. Now they have to sell Gig ports everywhere, when before a fastE port would push the needle.
But now in Tampa, L3 is giving away Gog pipes at 100MB prices. How will this move the needle?
How many Gig sales are there (within 4000 feet of their fiber)?
I have to ask: What is their brand? Yeah, they power the VoIP world, but only insiders know that.
Either pick a fantastic CMO or give this new CEO 2 quarters to move revenue. Level3 has too much debt to have so little revenue growth.
]]>Everyone is responsible for sales. Every single person in your company.
Marketing is every touch of the customer, prospect or marketplace. That means billing, trade booth, advertising, social media, the color of the paper, the way the phone is answered, attitude - literally everything.
In Engineering, you folks have a smartphone right? Your customers want something that easy to use, that cool, that functional. If you can't deliver that, well, sales will stall, because likely someone else has something better - all they have to do is Google to find it.
In billing, is the bill correct? Is it easy to read? Are the taxes correct? When they call in, do you resolve the issue in a pleasant tone?
Tech support, customer support, etc. get the brunt of the customer frustration, but you are also the face of the company at that point. The customer can be won or lost during each call. It isn't fun to deal with anger and frustration while also being clocked and measured, because support is looked at as an expense, overhead. In fact, support is your customer retention department. You know that metric called churn that The Street scrutinizes? It is handled here.
Provisioning and Ordering have to be smooth and detailed and clearly communicating with all departments. These are the gears of the machine.
The C-Suit - CEO, CMO, CTO, CIO, CFO, CSO, blah blah - vision, culture, brand are not just words on a slide deck that you dust off once or twice a year. You have to live it! Leadership is by example. Words are great, but actions speak louder than words.
In most companies, departments are silos. One department head cannot correct or make a change in another department. The C-Suite has to make certain that the changes are happening across the board.
So, yeah, salespeople and channel managers are the grunts on the street trying to close deals and increase revenue, but the sales department is just one cog in the wheel. Any cog can clog up the machine - but sales will be the one that gets fired.
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It is very difficult to sell cloud services -- any cloud services, including cloud communications - unless you use them yourself.
You have to drink the kool-aid. You have to eat the dog food. How can a prospect buy something from you if you don't believe in it enough to use it yourself?
]]>So one CM made the comment that channel partners are too lazy to sell cloud. "It is much easier to sell network or a box than it is to sell cloud." There is some truth to that.
VAR's and Inter-connects have a similar business model that is centered around selling a box, installation and support. So cash flow comes from selling the box. They receive a chunk of money upfront. I am not certain that any of them survive off can recurring revenue yet.
To remedy this, some master agencies and vendors are looking to pay some of the commissions upfront, but this requires risk and financing, which devalues their own companies (and makes an exit harder).
From what I have seen and heard, most channel partners - agents, VAR's, Inter-connects - sell Hosted PBX as a third option after all else fails -- and typically sell it as cheap VoIP.
To me, this means that the service providers and the CM's have done a poor job of training and communicating who the target customer is, why they should buy UC/HPBX/Cloud, and what the value proposition is. Am I surprised by this? Not in the least. Why?
For one, many cloud companies have too many executives from the CLEC world where it has always been about Arbitrage - "Let me save you money!" And, let's face it, CLECs know nothing about marketing or positioning or branding - and neither do most cloud providers.
The other big problem is that most of these companies are enamored with their technology - as if the market gives a crap about their technology. People have iPhones and tablets and a bazillion apps. You think your tech is cooler than that??
This was a problem that ISP's had too. All techies that just like to be techies. The reason that 8x8 has grown is because some where along the way they switched from being a tech company to being a sales and marketing company. Most cloud providers are not there yet.
It is also very challenging to sell cloud services, especially UC, with its myriad pieces and components. What channel partner is going to remember all the stuff about your UC product and about the other 10-12 services that he also offers???? Um, not very many.
The flip side to this is that most cloud providers don't really sell direct. They dapple in it because it is expensive. However, if you haven't sold it, you don't know how to train or coach others to sell it either. You don't have the sales process and questions in place as tools for the channel partners.
There is another challenge right now: sales sizes are too small to cash flow for the provider or for the channel partner - so that will grind things to a halt sooner rather than later.
My CM pal also mentioned that partners don't want to explain all the features of HPBX/UC, do an ROI or TCO, check the WAN and LAN, etc. It is far quicker to just sell network or a box - and move on.
The reason that UC is stuck is because it is not exactly like what people have now. So there is training and education needed to the customer and her employees (as well as to the channel partners). This could be fixed IF the channel would actually eat the dog food. Not many channel partners actually use cloud services. If you drink the kool-aid how do you sell it to someone else? (Sales is about the transfer of emotion - if the partner isn't excited about your product, why would the customer be?)
There are a number of reasons that UC isn't selling. (Another is too many providers that all look the same.) As my brother tells me, "But, bro, Lync is selling!" Sure as part of Office 365 or to Fortune 100. And mid-sized businesses with more than 250 employees are buying UC, but are they buying it from the channel or from one of the top carriers?
Another trend is that smaller, unknown cloud providers are losing deals to better known companies - like Comcast, EarthLink, etc. WHy? Trust factor. Brand is a trust factor. So it comes back to marketing.
So is the channel too lazy to sell cloud? Or have the cloud providers just done a really poor job of picking partners and/or marketing?
BTW, there are certainly channel partners selling cloud, but they are dedicated to doing so. They drink teh cloud kool-aid.
]]>My associate says, "Everyone has a similar platform and features; sales are predicated on relationships and lacking that price. Key system emulation is big for VSB" (very small business = less than 10 employees).
In Icarus Deception, Seth Godin describes the marketplace changes that we are living in with the decline of the Industrial Age. Godin says that we live in the Internet fueled Age of Abundance.
"We do have an abundance of choice, an abundance of connection, and an abundance of access to knowledge. We know more people, have access to more resources, and can leverage our skills more quickly and at a higher level than ever before. This abundance leads to two races. The race to the bottom is the Internet-fueled challenge to lower prices, find cheaper labor, and deliver more for less. The other race is the race to the top: the opportunity to be the one they can't live without, to be the linchpin we would miss if he didn't show up. The race to the top focuses on delivering more for more. It embraces the weird passions of those with the resources to make choices, and it rewards originality, remarkability, and art." [Seth Godin]
So why isn't UC selling?
People suck at selling it. Companies suck at marketing it. Companies stink at deploying it.
I know that is harsh, but how many businesses ask for UC? Um, none. They want a cheap phone system and their smartphones.
If Apple made a UC platform, everyone would buy it. Why? It would be user friendly. It would be a little different from all the rest. It would be branded and marketed well.
No one even does anything cool with the IP Phones! Those full color screens on those tiny computers that run XML and have numerous soft buttons that are useless.
The Broadcore Connect UC bundle includes voice, video, messaging, conferencing and mobility solutions with various connectivity options. How is that any different than XO's or any other Broadsoft BroadCloud BroadOne?
Everyone is offering a bundle - ANPI, VoIP Innovations, everyone! It's worse than the allergy aisle at the pharmacy!
"Successful organizations have realized that they are no longer in the business of coining slogans, running catchy ads, and optimizing their supply chains to cut costs." - Seth Godin
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Channel Managers are the whole conduit to the partner channel - and vice versa. Channel Managers are the conduit to the company for the partner.
Channel Managers have quota (boy, do they have quota). However, they can only indirectly meet that quotas through their partners (unless they are going to sell FOR their partners, which isn't best practices*.)
Goal Setting is one topic that I think not enough people take seriously. But to attain anything beyond a mediocre life, you need to set goals.
The steps after the Goal is set is just as important. As Keith Rosen has taught me, "Exactly how they are going to attain their goals; that is, the strategy as well as the message that needs to be executed..... The structure they need to put in place regarding how they will manage their daily activity that will move them towards attaining their goals."
People forget that it is daily activity that gets them to their goals. Little steps each day. Daily activity becomes habits. Habits produce results.
What does your calendar look like?
*Teach them to fish; don't fish for them.
]]>People, I have news for you: Sales is Tough! And keeps getting tougher.
Social media, online ordering, pricing comparison sites, UGC (user generated comments like user reviews), etc. makes the job of sales tougher and tougher. Why?
The customer is more educated today. It skews the sales process.
Seth Godin wrote in 2006, "I know you'd like to get rid of me and just take orders on the web. But that's always going to be the low-hanging fruit. The game-changing sales, at least for now, come from real people interacting with real people."
Keep that in mind. If selling is so easy, go do it! "Selling is hard. Harder than you may ever realize."
Nothing happens until a sale is made. Sales revenues pay for everything (unless you have VC dollars).
More and more companies are looking to the channel to drive sales. Why? Because a lot of cloud services rely on relationship selling - and they don't have the cash to pay sales people.
But the channel isn't a faucet which you can just turn on for sales. A lot of factors enter in to a channel partner relationship. The channel manager, ease of business, reliability, features, pricing, packaging, marketing, customer support, margin, compensation -- these are just a few of them. And most channel partners are looking to add services that compliment their current sales plan and customer base.
"Sell only by solving problems and creating profitable opportunities" is good advice from Tom Peters.
]]>Here's the big problem with that question: people don't buy the way you buy!"
"B2B marketers reported cold calling as their third-highest quality lead generation channel." The author, Derek Singleton, continues by saying "the Web has afforded us other ways that make it easier to identify leads without cold calling. For instance, prospects might download your white paper, visit your website, or follow you on Twitter."
The white paper lead gen trick is getting over-played and there are studies that show many people don't read the white paper. The white paper (or e-book) is a marketing tactic; cold calling a sales tactic.
You can certainly improve cold calling techniques by improving your list. If your list consists of companies that can benefit from your offering and you can be specific about that, your results improve.
If you target a vertical and tailor an offering directly to that vertical, your results will improve.
The biggest obstacles to cold calling success are voicemail and no-answers.
The problem with B2B tactics like twitter and white papers is that it is marketing not sales. Certainly, companies that perform marketing campaigns will generate more leads if the marketing is clear, repeated and aimed at the prospective customer.
Cold calling is a must for a company with a very specific customer base, like Caterpillar or Boeing.
Is a good tactic for telecom? It is a requirement, because service providers (for the most part) do not have a brand; do little effective marketing; and lack a unique value proposition. Some of this is due to the nature of telecom, where executives think that everyone is a customer. Being unable to determine who a hot prospect is or who your service offering will best benefit seems to be a symptom of telecommunications companies.
]]>Logitech is dumping some of its product lines as it re-vamps.
Andy says that Yahoo Voice is shutting down.
Microsoft sales of Office365 are decreasing.
Intermedia is acquiring Telanetix, which does business as AccessLine, for about $55M.
EarthLink is laying off as they realign.
So much is changing - and so fast.
You know what else is changing? The role of Master Agents and VADs (like Tech Data and Ingram).
Dell knows that hardware sales will continue to decline, which is one reason it is looking to go private. Microsoft knows that its best days are behind it. WinTel used to dominate the computing space. Then Apple iOS starting winning laptops and smartphones - and definitely the tablet sector. Android is the O/S for smartphones and tablets, but Chrome laptops are also in the market.
When everything is wireless do you need switches and cables?
Level3 just revamped its Channel, but the masters are wary of signing it. XO has a new contract out that masters also are balking at signing. Why?
Qwest/Savvis/C-Link stopped teaming agents with directs, but Level3 instituted something like teaming. There is a commission hit for teaming. Here's the dilemma:
One, prices keep dropping, so commissions are lower. Agents have to work harder to make the same money.
Two: Current customers want to lower the bill with every contract renewal, which means that commissions dip (or disappear) unless the Agent switches its customer base to a new provider.
Carrier Quotas keep going up, despite No. 1 and 2. So Masters can't hit the quota, lose commissions and can't pay the agents.
Everything is cloud, but revenues are much smaller, the sales cycle is longer, and the sale is more work for the agent. For less money.
Telecom - you know, the network - transport and transit - are still selling, and agents still want to sell it, but the carriers don't (or can't maybe) pay commissions on straight network sales. So Agents look for carriers that will pay them to sell transport and transit. Masters don't get this business. Carrier Channels sales dip. The cycle spins.
Most Cloud services providers don't work with Masters, so those sales don't go into the Masters revenue. Lost revenue.
VADs like Tech Data and Ingram are selling cloud, cellular, network and hardware.
VADs already have a relationship with VARs. VARs are comfortable with their relationship with the VADs. Why would they switch to the Masters?
Gartner's Bova likes to talk about the transformation of Agents but she misses two key points: Agents are on a hamster wheel and can't just jump to a new one because they need to keep the cash coming in to satisfy quota, bills, churn, etc.
Point 2 is that there isn't an easy transformation path for an Agent to become a cloud services broker. A billing system, integration with the vendors, cash flow, liability, and other factors all get in the way of an agent becoming a CSB.
Despite what the Carriers want - more sales, more VARs selling their stuff - and what the Masters want - pretty much the same thing - the cogs in this wheel - the Agents and VARs - are not yet ready or in any position to make sweeping changes to their business to satisfy Carriers or Masters. The VARs and Agents have a business model that they are running with every day. They have customers that they are trying to satisfy every day. The added pressure from carriers and masters to transform, while also sacking their current revenue stream is a catalyst for disaster.
Look around - Intel, Microsoft, Dell, Cisco, EarthLink, Cbeyond, Logitech - these are just the companies TODAY that I see in turmoil. All of these sell via a channel distribution model, so if they see revenue hits what do you think is happening to their channel partners????
DUH
]]>Banks as well as the Duopoly understand that customer churn is higher for customers with only 1 or 2 services. At 3 services - the Triple Play - the customer churn is lowest.
Customers don't want a triple play but the bundle is usually cheaper.
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