Jola Cloud Solutions' Blog

Voice and data companies can improve ARPU by supplying new products to loyal customers. Research shows that SMEs prefer to buy from existing suppliers, they trust. Until there is sufficient demand to justify investment in support, billing and marketing, the supplier will often partner with a specialist on an introduction and commission basis. Moving from a dealer to a reseller model provides better control and improved margins, however there are billing challenges.

Billing

Billing can be especially problematic for IT companies that want to start reselling fixed, mobile and hosted telephony products. Alongside monthly service charges they will need to process monthly CDRs (Call Data Records), rating each call type and producing itemised bills and variable invoices. It can be difficult and risky to try and adapt existing in-house billing systems and purchasing and managing specialist billing software is not always feasible.

There are some good third-party billing products available, however the set-up fees, monthly standing charge and billing percentages mean the reseller often needs to take several orders before the margin covers the monthly cost of billing.

I hear this phrase a lot when we present the IoT opportunity in partner training sessions. Some partners get fed up of hearing the latest buzz word. They immediately think of smart meters when we reference the predicted 28 billion devices to be connected globally over the next three years. When we get to the part about the worldwide market for IoT solutions predicted to be worth £5.6 trillion, they have switched off completely because they don’t believe they will see a penny of it.

Current opportunities

Other partners in the room are engaged. They have customers connecting mobiles, tablets and routers to 4G already. They are productising satellite replacement services in rural areas of traditionally poor fixed line services and are offering cost-effective 4G replacements. They have customers wanting short-term connectivity contracts for temporary offices on building sites and have customers with recording equipment travelling abroad at a moment’s notice. They have the knowledge and experience in-house to create bespoke solutions, sourcing hardware from multiple suppliers and already have JolaMobile SIMs and Mobile Manager.

Future opportunities

These partners have forward-thinking customers looking to connect other devices such as CCTV cameras and vending machines and are asking about fixed IPs. CCTV customers are asking to view their cameras remotely over the internet in real-time. Vending machines now take cashless payments and can be managed remotely to check they are working. Low stock alerts are sent in real-time. The ability to connect devices to the internet has changed behaviour, increased efficiency and improved the customer experience.

New legislation

On June 15^th, the EU introduced Roam Like at Home (RLAH), allowing EU residents to use their mobile allowances anywhere in the EU.

What does this mean?

There will be no roaming charges when travelling to another EU country from 15th June. Every existing or new contract that includes roaming services will change to a Roam Like At Home contract. New EU rules will cover data services, voice calls and SMS.

Communications (phone calls, SMS, data) made from another EU country will be covered in the national bundle: the minutes, SMS and gigabytes of data consumed abroad in the EU will be deducted from the volumes of the national tariff plan.

Which countries are covered?

All 28 countries of the EU are covered by the legislation; Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden and United Kingdom.

New opportunity

This presents resellers with an opportunity to become trusted advisors and experts in mobile SIM management. The mobile networks have created their own zones to include additional countries. Mobile users may still incur overages if they go over their allowances or breach Fair Usage Policies. They will often incur significant, out-of-bundle charges if they roam outside of these ‘Euro Zones’.

Demand

Demand for faster, more reliable internet connectivity has never been higher for business users wanting to work remotely as if they were sat in the office. The reality for many rural businesses is that fibre broadband is not yet available and Ethernet leased circuits are expensive with long lead times. Companies are turning to 4G for both interim and longer term solutions, which creates opportunities for trusted suppliers.

Opportunity

Innovative companies are partnering with specialists to bundle solutions which include routers and devices as well as data SIMs on 30 day rolling contracts.  The challenge for both customer and supplier is one of cost. You need to know in advance how much data you plan to use each month as overages are expensive, but what if they could be managed?

This is the question I get asked the most from Jola partners. It doesn’t have an easy answer and there is no one successful formula. What I suggest often surprises partners, but has proven to work time and time again.

What do you want to sell to whom?

Selling new products into a new market is the most challenging approach, as there are no known factors or existing relationships to build on. This strategy needs the most planning and investment and has the longest ROI, however by establishing clear objectives and a budget you can start working on a strategy.

Start with the basics

Add product overviews, features and benefits to your website. Create compelling packages and offers to attract your target audience. Focus on a strong call to action to generate leads. Think about competitive offers and how your offer differs. Put yourself in the position of your prospective customers. What problems do they have? What options are available to solve this problem? At what cost? How could your solution best meet these requirements? Make sure this information is clearly visible, easy to download and that you are responsive to their first enquiry.

Building a communications strategy to promote new products into a new audience is the next challenge. Attracting your target audience to the website via adverts, social media, email marketing and combining this with more traditional methods, such as direct mail, PR and advertising is key. Building, attracting and converting a new audience takes time, commitment and investment. You need to meet an exact need at the right time with the right solution at the right price, better than your competition. You may also need to overcome competitors that have existing relationships with your target audience.

Once you have generated interest, you need to be ready with materials to support the customer engagement and conversion process. Some customers are fine with PDFs others prefer printed glossy packs for the board to peruse, along with detailed product descriptions and a professional proposal.

Winning the first deal is crucial and when all goes well can be an excellent springboard to winning further business in the same market.

Adding new products and services to your portfolio often starts with a single opportunity. Every element of supplier services and support is tested from the time it took to answer the first enquiry, to the quality of the post-sales support. Where suppliers exceed expectations and deals are won to the satisfaction of both the partner and the end customer, motivation to find similar opportunities is high. Where demand in the base is also high, companies are more likely to consider productising solutions and dedicating resource to growing new revenue streams. Good support at every stage is vital to closing the first deal. What support does Jola offer for each partner model?

Support for dealers

Dealers use our website and branded materials (flyers, guides, videos) to market and sell solutions. Jola’s Partner Managers are available to attend meetings and conference calls as required and dealers have access to a quoting and ordering tool, which allows them to create co-branded sales proposals and email them directly to the customer. Customers can review and edit proposals and when they are they ready, they can simply click to order, which automatically triggers provisioning actions internally.

Support for resellers

Resellers have typically sold similar solutions and have a view of the potential demand. They usually understand pricing models and know what their buy price needs to be, to protect margins and be competitive. These companies may already have a web site, marketing collateral and defined terms and conditions. They tend to use our product overviews, feature summaries and competitive comparison documents, available in word, to shape their own proposition. They have their own brands, a good knowledge of their competition and their own unique selling points. They like to bundle solutions to include their own service wraps, tailored to meet the specific needs of their target sector. Once their pricing is set and products have been added to the website, they use our white label product flyers and guides to create branded versions for their sales and support teams.

When drafting a business plan, you need to be clear about your objectives. Who are you writing the business plan for? What questions does it need to answer? Typically plans are drafted to cover one, three or five year objectives and strategies to achieve them. Writing a plan allows you to identify priorities and the plan itself can be used as a benchmark to measure success. By involving key individuals when drafting the plan, you can often build an engaged and motivated team, working to achieve common objectives. Two key areas of the business plan are the financials and competitive analysis.

Financials

Some entrepreneurs only put together a business plan if they are trying to raise money but not to run their business. Your financial forecast is your dashboard and you should be re-forecasting (not re-budgeting) every quarter. As much as you might think you know instinctively how your business is going, without a proper financial plan, you probably don’t. 

When deciding on your business model remember that recurring revenues are usually more valuable than non-recurring, especially if you can sign customers up on longer term contracts. Consider a plan where your customers rent a product or service from you rather than buying it up front. Most companies prefer to spend capital on growing their business rather than on overheads and a regular and growing stream of recurring revenue de-risks your business. 

Competitive analysis

I have read hundreds of business plans and usually the poorest section is entitled “Competition”. I was regularly told “well, there isn’t really any competition” which usually means; 

• You haven’t done your homework or
• No other companies see any value in doing something similar to your idea or
• There will never be any demand for your product or
• There is latent demand for your product and it will take an enormous investment in marketing to change people’s behaviour and make them buy it

Understanding the competition can help you to estimate the potential market and demand for your products. By comparing and contrasting products and services, you can get a real feel for your own USPs and how you might position them to attract business from the competition or target a slightly different market. Analysing how the competition may react to a new entrant also helps to form the sales and marketing strategy.

Important business decisions are not restricted to business expansion or new products – strategy, employment, security, regulation and ethics all need careful consideration. Some business owners make rash decisions as they believe that mistakes can be easily rectified. Carelessness in recruitment and supplier-selection is common, where the true cost of bad decisions is often misunderstood. Managers believe they can easily correct mistakes simply by firing/rehiring and switching suppliers. Of course, it is not always that easy. Depending on tenure and management, under-performers can be hard to move on – and costly to productivity in the meantime. With suppliers, relationships are established and systems integrated. Migrating customers can be difficult, expensive and even legally problematic, especially if you only skimmed the MSA before you signed it. Running multiple suppliers of core products presents significant operational difficulties (provisioning, billing, support) and you risk loyalty bonuses and volume discounts.

2. Analysis Paralysis

Some business owners go back and forth with inquiries while trying to make perfect decisions. They listen to new specialists and new points of view. They hold meetings and watch presentations. They hear arguments from all sides. They spend countless hours on Google then conclude that they do not have enough information to make the decision. Making no decision, or deciding to do nothing, also carries risk, often more so than making a minor misstep.

The best professional poker players are not gamblers. In fact those that are, cannot win in the medium/long term - the same is true of entrepreneurs. Entrepreneurs that make instinctive, rather than calculated decisions are destined to fail. Proper and appropriate risk assessment must be applied to every decision - otherwise one mistake or piece of bad luck can be disastrous.

The uninformed will tell you that poker is a game of chance – I do not agree. Some of the keenest minds in the world, chess masters, mathematicians and scientists are professional poker players and there are many successful entrepreneurs who are also semi-professional poker players.

Probability

In poker and business, understanding probability is important. In poker this is well defined whereas calculating probable outcomes in business is more subjective. Whilst most businessmen will not construct complex mathematical models before taking a decision they will usually pass important decisions through a rudimentary risk assessment model. For example, before launching a new product they will consider the size of the prospective market and the probability of winning a percentage of it. They will turn this into a prediction of revenue and profit, which they will set against the cost (and opportunity cost) of development, sales and marketing. They will calculate a hurdle rate that the return on investment must clear before being given the green light to proceed. This hurdle rate will include the cost of money, inflation and a risk premium that reflects the range of potential outcomes.

IoT describes the networking of devices that can collect or transmit information. The data amassed from these devices can then be analysed to optimize products, services, and operations. The market is anticipating big things from IoT in the next few years, however today, according to Cisco, three quarters of IoT initiatives fail.

The IoT opportunity

By 2020 Cisco predict there will be 50 billion connected devices worldwide. Demand for the first generation of IoT products (fitness bands, smart watches, and smart thermostats) will increase as component technologies evolve and their costs decline. 

Companies, such as Jola, have developed Mobile Manager to manage large estates of 4G data SIMs in remote devices. The portal communicates in real-time with Vodafone and O2 4G networks and can be used by both resellers and their end users. Mobile Manager handles SIM activations, ceases, suspensions, reports, alerts and bolt-ons. 

In IT and Telecoms, SMEs are looking for ways to connect an increasing number of devices, (laptops, tablets, smartphones, cameras) in multiple locations to the internet on short-term contracts. 4G is widely available and fast. The range of 4G MiFi/WiFi routers is extensive and reasonably priced, however the challenge of how to manage usage and potential bill shock remains.