Jola Cloud Solutions' Blog

The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%. So why, when it is five times more expensive to win new business than it is to retain existing partners we can cross-sell and up-sell to, do we focus all of our efforts and budget on new business?

I think it is because we are looking for bigger and better deals to help grow the business. We want bigger brand names to add to our case studies and to be able to provide, in many cases, much more of a solution to embed customers with us, reduce churn and increase ARPU.

We often underestimate how long it takes to; build a list of key prospects, craft campaigns, build trusted relationships, have the exact proposition they need, in a situation where they can’t get it from their existing supplier. As a marketer or salesperson with a big target, time is not our friend.

In the meanwhile, crafting campaigns to existing customers can help get some quick wins and build confidence in the strategy. Adding new product content to communications, presentations and proposals, especially as an easy up-sell, can be really effective.

The other short cut comes from existing relationships. If you have a trusted relationship within a prospect you can often leverage this to get you in-front of the right people to understand requirements with a view to start proposing a solution. Being sponsored into a new prospect by an existing customer is very powerful and should be encouraged.

New partners tend to sign contracts with a new supplier either because they have made a strategic decision to add complementary services to their portfolio, or they are working on an opportunity which requires services they do not sell.

The first scenario is often driven by the senior management team, engaging departments as required, to help onboard a new product. They have a clear idea on who their target audience is, their requirements and price points to win business. They are familiar with competitive offerings and are keen to leverage USPs. They know how to package and position solutions to gain competitive advantage, and are quick to act.

These partners are happy to use white-label marketing materials to enhance their own website, campaigns and sales literature. They focus on the products that exactly meet their requirements and quickly skill-up, in order to sell, provision bill and support. They track their success financially and put pressure on suppliers to ensure they continue to win, in changing market conditions.

The second scenario is driven by a current opportunity. Pricing is key as well as a successful test of the product. If the testing goes well and the commercials cost-in, orders are placed as and when they are needed. If deals are successful, they may be productised. Focus is often on the original deal and case studies and testimonials crafted to support sales and marketing campaigns to win similar deals.

Good marketing consists of the right message, hitting the right prospects at the right time. This formula generates leads, which, when converted, help to fill sales pipeline with revenue. We have a growing list of MSP, CSP, ISP, traditional voice resellers and IT specialist partners, who invest in marketing to enhance their propositions. They incorporate Jola services and brand solutions. We support partners at every stage of new product roll out from marketing, through to opportunity uncovering, pricing, pitching and on-going support.

When marketing to existing customers and new prospects, it is important to get the right content to the right person. If you haven’t spent time building your prospect list or customising your messaging, you may not get the results you expect. It’s the equivalent of printing flyers and letting them go in the wind. They may be great flyers, your colleagues and friends may like and share them, but it won’t necessarily land you that big deal.

We encourage partners to have a social listening and engagement strategy, aimed at prospects in key vertical markets for mobile data. We help to identify common prospects, highlight key issues and propose unique solutions.

Working with partners we have helped to improve win rates and build sales pipelines. We advise our partners to be strategic and not generic with everything they do in marketing to achieve a much higher success rate. We recommend our partners stick to their strategy and don’t lose focus when the next project comes along. Be agile, enhance the marketing plan, report on everything they do and build on successes.

Demand for 4G SIM cards is increasing and channel partners have been quick to market with propositions from 4G routers in rural areas to tracking and monitoring devices globally, but few are involved in rolling out large scale IoT solutions. Outside of the channel, global manufacturers, distributors, mobile networks and specialists, have been considering how to scale the Internet of Things and increase adoption.

Scale is both the biggest opportunity and biggest challenge, as the cost of changing SIMs in millions of devices can be prohibitively expensive. Some say the need for scalable IoT solutions has led to the development of eSIM technology, a network-agnostic white label plastic or embedded mobile data SIM.

These SIMs can be embedded into devices or sold separately and operator profiles on the eUICC can be securely and remotely updated over-the-air. Instead of swapping plastic SIM cards, profiles are downloaded and managed on a device as needed. In the eSIM model, a device is ready to deploy anywhere network coverage exists. If a device moves and crosses networks, its profile can be updated quickly and securely.

Yes, eSIMs could really help IoT adoption and encourage channel partners, who couldn’t previously see how they could make money from IoT, start generating profitable, recurring revenues.

Mobile retailers Vodafone, O2, EE and Three are currently advertising unlimited voice and data packages for businesses on their websites.

Is the data truly unlimited?

The short answer is no. If you read the small print, the mobile networks have set data usage limits per month. Some limit the number of devices that can be tethered, others will limit the amount of bandwidth available, which slows downloads and restricts usage.

Are there any other catches?

Some of the retail mobile operators are offering 12 and 24 month plans with a discounted rate for the first 6 months.

Do I need unlimited data?

That’s the big question, and the answer in most cases is no. If you’re streaming multiple hours of video each day over mobile data, or using mobile data to download large files then you might, but for most users 20GB is fine. The danger of buying unlimited for some businesses is that they will simply pay too much.

What can the channel learn from this?

The channel should partner with a wholesale supplier that can provide a range of competitive voice and data SIMs, which allow them to compete with the single offerings from retail mobile operators. They need to add value by helping their customers choose the right package for their business, by understanding their usage and pitching solutions to meet their exact requirements.

IoT is not for me

We are told that there will be 28 billion devices in a market worth £5.6 trillion, however resellers are struggling to see where the opportunity is for them. Why is this?

It’s difficult to compete with the mobile operators in this market

The mobile data side of IoT is dominated by the Mobile Network Operators. As data usage is often fairly low, management of usage becomes less of a priority and therefore less of a benefit for the reseller to differentiate themselves. The key is to look for problems the customer has with the status quo and then find ways to solve them.

Key challenges

In mobile data for IoT there are two really big problems facing resellers and their end users.

It is costly for the end user to change to a better SIM deal

Even when users know they could be getting a better mobile data deal elsewhere, the thought of swapping SIMs in thousands of devices in hundreds of locations around the world is an operational nightmare, and extremely expensive. Irrespective of what they are paying for the SIMs, very often a technology refresh, such as upgrading 2G to 3G, also entails changing all the SIMs.

The retail mobile network operators know this

Because the retail mobile network operators know there is a high cost to switch suppliers, they can hold the end user to ransom over price. Either by increasing the price at the end of the initial term, or failing to keep up with price decreases in the marketplace.

Will this always be the case?

The issues above relate to SIMs that are locked to a particular MNO. They are physical SIMs that are associated with a network and a package. If SIMs were not tied to a network operator and package and didn’t need to be replaced, this would change things.

Demand for Machine to Machine (M2M) SIMs is growing. Channel partners are building a pipeline of big deals in key vertical markets, generating high-margin recurring revenue.

Transport

The driving experience is being revolutionised. Apps and services are giving drivers everything from in-vehicle Wi-Fi and incredible entertainment, all the way through to faster, more insightful diagnostics and maintenance.

Utilities

Businesses are managing their energy flows through smart energy grids and smart meters, allowing for more accurate bills. There is a focus on improving energy efficiency and resolving outages more effectively, with remote site monitoring.

Health

Smart devices offer important patient benefits, like connected ambulances. Ambulance crews have access to high-bandwidth internet capabilities, and tablets holding patient records. This means that information can be sent to hospitals in real-time.

Security

Commercial security is getting smarter. CCTV and alarms can be monitored securely and footage can be stored remotely.

Part of Office 365 and launched in 2018, Teams is Microsoft’s fastest selling product and recently overtook Slack as the #1 collaboration tool, according to recent research. By upgrading to MS Phone System, Office 365 users also get call management features.

If you need to make and receive calls outside of the Teams family, the Microsoft solution starts to look a little clunky and quite expensive. Out-of-bundle calls are paid for per minute by logging a company credit card on the system, and whilst some country rates are in line with the market, others are not.

Instead of using their Calling Plan, Microsoft will allow you to connect Teams to an alternative network provider using Direct Routing. However, setting this up is complicated and expensive and only a handful of companies in the UK offer Direct Routing as a service. There has not been a true, self-serve, white-label, channel programme for Direct Routing in the UK - until now.

Jola’s Direct Routing for Teams is built on a Microsoft approved platform and offers numbers in 167 countries as well as every area code in the UK. Jola’s unlimited wholesale UK call package costs less than half that of MS Calling Plan with very competitive out-of-bundle rates – billed monthly in arears. 

For the first time suppliers of Office 365 will be able to offer a viable alternative to traditional, or hosted telephony, at a compelling price to their customers, whilst making a good recurring margin on call bundles and out-of-bundle call charges.

I was on a beach and a guy tried to sell me some local precious stones. Very quickly we went from $100 to $10 and when I tested the ‘stones’ they were actually lumps of plastic. He shrugged and moved on to the next tourist – no hard feelings on either side. His negotiation approach is more zero-sum than win-win but has this damaged his business? – probably not.

Handle negotiations with a one-off sale badly in B2B and you may harm your reputation or your bottom line, but usually only on that one deal. However, getting it wrong with an ongoing relationship can be disastrous, especially in the channel. Where a company is re-selling your product, you have to know exactly where you fit in the value chain. What is the Standard for your product? What will your partner need to sell at, to win against the competition? - and still make enough margin to excite them, and their salespeople. What is unique about your offering and how does that translate into benefits for your partner and their customers?

I see basic negotiation mistakes all the time in my industry and usually due to lack of research and preparation. Suppliers trying to sell products to resellers without considering what they will sell it for, or assuming that their ‘unique’ features are benefits, without having properly tested the proposition. On the other side, resellers come back with random requests for discounts and get offended when you ask why. Alternatively, they invent prices they have received from other suppliers in an attempt to improve their own margin.

Going into a negotiation, there is an assumption that you will come to an agreement. If you are unable to agree terms this is often viewed as a failure but whether or not it is depends on how well you have prepared.

Before you start a negotiation it is important to think through potential outcomes. Which party has most to lose if you cannot agree? If you have done your homework on Standards you will know the range of acceptable outcomes. If you cannot get to a deal in this range, which side is most adversely impacted?

You should be able to answer this question for both sides and for individuals on both sides. e.g. perversely a product manager incentivised on average margin may be more inclined to lose a large customer than give them a significant price cut to stay. However there is a cost to switching suppliers as well as acquiring and on-boarding customers, and moving away may be the wrong decision for both organisations. One option is to adjourn the conversation with the product line and find someone with a more holistic view. Even then they may overestimate the value of inertia, so you have to make them believe there is a real possibility of losing your business. Properly research the alternatives and be prepared to walk away from a deal if your minimum requirements cannot be met.