Showing posts with label small business VoIP. Show all posts
Showing posts with label small business VoIP. Show all posts

Sunday, November 1, 2009

How Not to Sell Hosted VoIP to Smaller Businesses


The single biggest mistake retail providers make when trying to sell hosted IP telephony to small and mid-sized businesses is that salespeople start with features, when they should start by reassuring buyers that “it is a reliable phone system,” Savatar VP Mike Ahearn told an audience of small telcos and cable companies attending a MetaSwitch marketing seminar.

The sales pitch has to begin with “it’s a high-quality phone system that is reliable and lets you keep your phone number,” says Chris Carabello, Meta Switch marketing director. In fact, establishing this lead proposition is so important retail sales personnel should establish that fact even before going to the “it will save you money” pitch.

Only after those two positioning efforts should sales personnel then add that hosted IP telephony “makes your life simpler.” The very last thing that should be discussed is that IP telephony offers new features.

And even then, when working with small business customers, even the discussion of new features should focus on a few new features that might appeal to the particular prospect.

That often is the reverse of the pitch made by many sales people, who lead with features first, says Carabello. The key message sometimes occurs at the very end of a discussion, but it needs to be delivered right up front, he adds.

It might seem unnecessary to emphasize that the product is “a managed, hosted IP telephony service that allows you to make and receive calls on IP phones or your computer,” but potential buyers are being asked to make a change in behavior that automatically raises the question of how well it will work.

And though there is greater understanding now that hosted IP telephony actually works, possibly 22 percent of potential buyers continue to think VoIP suffers from major quality of service issues, says Ahearn. As many as 28 percent to 32 percent of potential buyers with 100 or fewer employees might believe that, so take the issue head on, right away, he adds.

The important implication is that every prospect has to be reassured, right up front, that “it works.” Conversely, “cost savings” are generally seen as an IP telephony value.

And though hosted IP telephony obviously provides a path to selling many other services that could range from Web hosting to email and data services, “make the hosted telephony sale first, then up-sell later,” suggests Carabello.

The generic pitch should begin with the notion that hosted IP telephony “is an easy to manage phone system that will save money and help you run your business more efficiently,” says Ahearn.

Only after that is established should the salesperson move to the fact that it uses the Internet connection to make calls. And since most small businesses buy on the basis of a basic “cost per employee per month,” emphasize that hosted IP telephony offers a lower cost per user per month than the existing solution.

But there is one prevalent fact that suggests a simple SIP trunking offer will resonate with small businesses who already have invested in IP PBX gear. Ahearn points out that the trunk-to-phone ratio for smaller businesses is pretty close to 1:1. But an IP phone system really does quite well with a 4:1 concentration ratio.

Firms with four to seven employees report buying one to 1.2 trunk lines for every phone in use. Firms with eight to 10 employees report having 0.6 to 0.7 trunk lines for every phone in service.

Organizations with 11 to 20 employees report having 0.5 to 0.6 trunk lines for every phone. Firms with 20 or more employees say they have about 0.4 trunk lines for every phone.

The implications are fairly clear. Organizations that need to support between a few trunks and 14 PBX trunks are vastly over-provisioning trunk capacity. The typical organization using IP phones can get along fine with a 4:1 ratio of phones to trunks.

For a firm supporting six phones, and buying six trunks, an alternative SIP trunk strategy could save as much as $1,915 a year.

An organization requiring 14 trunks could save $2,205 a year by swapping SIP trunks with a 4:1 concentration ratio for PRI trunks that are provisioned at a 0.4 concentration ratio of phones to trunks.

The clear implication is that a small organization can save money immediately by replacing PBX trunks with SIP trunks.

Friday, January 25, 2008

Dell, Fonality Target SME Market

Some things never seem to change. For several decades, competitive providers of communications services, not to mention value added resellers, interconnect companies that install business phone systems, Internet access providers and broadband services providers have found that the small and medium-sized business segment has been the sweet spot for competing successfully with large incumbents. Cable companies now are preparing their own assault on the lower end of the market as well.

The news that Dell now will be selling the Fonality VoIP Phone System through its global SME sales organization, as well as its channel is simply more confirmation of the trend.

At the same time, there is abundant evidence that not all providers are equally advantaged in the SME space as the technological complexity of services intensifies. Some providers used to selling connectivity services with a clear network demarcation are going to find the going much tougher as the demarc moves to the desktop and the handset.

VoIP, in particular, requires more active assessment, management, monitoring and installation activity and support. And that's just at the network layer. As voice and communications become more embedded in actual end user applications, the level of complexity will take another leap. So, going forward, every provider inevitably will wind up more involved than perhaps desired in all sorts of implementation, optimization and management activities.

More skill and more cost are the inevitable result.

Monday, October 1, 2007

Time Warner Fires Opening Salvo


Though Comcast won't start firing its guns until early 2008, the U.S. cable industry has begun its assault on small business customer accounts. Time Warner Cable has rolled out a phone service for small and medium-size businesses in Central Ohio.

Time Warner introduced its Business Class phone service in the Columbus area Sept. 21.

A Time Warner analysis estimated there is a $40 billion market for business phone service in the company's eight-state service area, $9 billion of which is made up of small and mid-size companies, according to Ted Stine, Time Warner VP.

Time Warner first is targeting its existing business customers in the region who already subscribe to the company's Internet and cable video services. Companies that sign up for phone service will then get a discount on all their services. Once it has saturated that segment, Time Warner obviously will start cold calling prospects who have not existing business relationship with the company.

The biggest share shift should occur in the small business segment (four and five access lines, especially), though most observers would define the segment as "four to eight lines."

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