The Trouble with VoIP
By Peter Radizeski, President of RAD-INFO
I was reading the PHONE+ article, The Problem with VoIP, and wanted to focus on a few points:
“The typical SMB is not going to make a change to the business unless there is a compelling reason,” says [John ] Macario, [president of Savatar]. “So they need to understand what VoIP can do for them, and understand enough of the VoIP feature set to understand which ones will help the business. The service providers aren’t doing a very good job at communicating any of that.”
A channel partner can fill the gap. “SMBs feel a VAR or an SI is more likely to be local, and will come in and sit down to talk about the business and propose a solution that makes sense,” Macario says. For instance, productivity enhancement, the support of teleworkers, the cost-savings inherent in going with a hosted solution – all of these are potential talking points.
I have to agree with Macario here. No one wants to know how a hybrid car works. They are buying it because of the story, for what it says about them to their friends and themselves. Its the same with VoIP. Why even sell VoIP? You are selling a communications solution that has some cost savings (either capex or opex); some productivity gains; or some added value.
“Then there are skill set issues. There is a requirement with many VoIP solutions to wrap in hardware and endpoints, along with integration and professional services.”
Hence, the article states, the reason why XO made a distribution deal with Tech Data. But I see the XO-Tech Data partnership as yet one more move by a company that has no clear vision of what it sells and to who it sells it — and neither does the marketplace. XO has been added to the one million items in the catalog available to Tech Data resellers. It is going to be about as effective as Radio Shack selling Sprint cellular services. (In other words, not much).
Further complicating matters is the fact that many SMBs don’t care about the whiz-bang features, making it challenging to position VoIP vis a vis what the customer may already have in place. So, [PlanetOne CEO Ted] Schuman says a conversation first must start with a realistic view of the SMB’s core needs. “For most SMBs, in many cases it’s a business owner, and he doesn’t understand the hosted PBX nor does he ever want to,” he says. “It’s a funny thing, but what people want in a phone service hasn’t changed much – you want dial tone, and you want to turn on your PC and be able to hit the Internet. Do they understand the depth of the solutions and the applications and the distributed workforce model? No.”
Schuman adds, “Selling a service like this is far more complicated than selling LD or dedicated Internet. And if you sell it, you’d better hope the carrier will be able to implement the technology. Agents know that this is probably where the industry is headed, but it’s a little intimidating. They need to understand the solution and the application better.”
Ted, I have to disagree with you wholeheartedly. It’s not that people want VoIP. (And, Ted, Why would you start the conversation with “This is VoIP?”) What small business owners want is more time, more productivity, more sales, and less time worrying about the technology (so they have more time to work on their own business).
Your job as a master agent is to help your agents with the skills you say they don’t have. We are in a talent war in a fast changing industry. If you want to be relevant in the next two years, you either better find agents with the skills needed to sell SIP trunks and hosted PBX, or you better start thinking about training your current agents in SPIN Selling (or similar).
Besides isn’t the master agency supposed to vet the provider for the subagent? I know it is difficult to find a viable VoIP provider today. SunRocket, VoIP Inc., and Vonage don’t exactly give the sector a glowing review, but there are viable regional VoIP providers around. Realistically, $20 for a line is not going to be a feasible model. And regional providers should be able to provide the local loop to handle quality-of-service issues. Cbeyond, M5 Networks, and others are doing this in their markets.
Tom Peters chants Reinvent, but our industry bucks and fights it with arbitrage play after arbitrage play. You wonder why SMB is afraid of companies like Covad? Let’s see: Bankruptcy. Implementation problems.
Our industry has created its own black eyes. And it does not want to reinvent itself. “Hey, we are making money now, right? Why worry?!” You should worry because the next generation of entrepreneurs is WAY different than what we are used to. And they communicate very differently: Twitter, Facebook, Meembo, TalkPlus. They won’t be using a landline much, nor many minutes.
To re-invent, the industry has to get away from selling on price. Jeffrey Gitomer, sales trainer and author, writes to me, “Telecom has created its own demise. By focusing on price for the past 25 years, you’ve painted yourself into a corner. And the turnover of salespeople in your industry is rampant because of it.” [Sales Caffeine, issue 322, Jan. 8, 2008].
The sales process involves open-ended questions to paint a picture of triggers. We will be discussing triggers during our panel on Virtual Office at the Channel Partners Conference & Expo.
More from the PHONE+ Article: “I’ve yet to meet a SMB decision-maker interested in buying VoIP (hosted, premise or trunks) just because it’s VoIP,” says Dan Baldwin, an agent and consultant with ATEL Carrier Consulting. Customers won’t switch to VoIP in order to get their voice mail messages in their e-mail inbox, or have their desk phone, cell phone and home office phone all ring at the same time, he adds”
Dan, most small businesses love the UC features. I talk to many people selling hosted VoIP, you would be amazed at what the customers find as the hot button. (But then to do that you have to actually get out and do consultative sales, not the “I’ll-save-you-10-percent-let-me-see-your-bill pitch).
This sale won’t be made with fancy PowerPoint presentations or talking about “more than 20 productivity-improving applications.” It will be made by talking with current users and relating their stories (and testimonials) to your prospects.
The kicker is that this makes the sales process longer and, ultimately, more expensive that the bid-by-numbers approach we have today. And the commission on VoIP isn’t enough to force that transition just yet.
Overall, I think agents have to start ramping up to sell VoIP. If not, they will be pushed out by Tech Data VARs, Cisco and Microsoft resellers, interconnects (key system/PBX resellers) and telco account execs.
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How Can You Vet the VoIP Provider?
One point is to make sure that the provider has its feet firmly planted in one strategy – not wholesale AND retail. One or the other, not both. Too many started with retail and went wholesale to bring in revenue. It is difficult to do both well — XO, Level 3. And you don’t want your provider to be creating more competition in the marketplace directly against you. (There are more than 1,000 VoIP provider; no need to create any more).
Make sure they have a billing platform — a good one — or they can’t bill per minute. If they sell flat-rate, it is likely the business plan will topple over.
What is the plan for scale? How do you scale tech support and customer care as you add hundreds of users?
How do they handle QoS? How many session border controllers are there in the network? Where are they?
Explain the redundancy — both hardware and bandwidth.
Who handles level 1 tech support?
