Jola Cloud Solutions' Blog

You may have built or acquired a base of telecoms or connectivity customers. This may not be a core part of your business and the cost of supporting and billing these customers may be on the increase. What do you do? You could invest in this part of your business or sell it.

Why sell?

• You may simply want to raise some cash, either to expand the business in other areas or for personal reasons
• You may not have reached critical mass. A lot of data resellers get into telecoms by accident and then realise the cost of billing and support is depressing margins. Companies with bigger bases can buy better and you risk losing customers when their contracts come up for renewal.
• The trend in the cost of communications is down. For example, at the end of a three-year leased line contract you may be able to renew with the customer at the same percentage margin but your cash margin could be halved, whilst your cost to support this customer has remained the same, or increased.

What are the challenges if you do decide to sell?

• You may be too small for a broker, who traditionally looks to sell larger businesses.
• You may not know who else to approach.
• You may have been approached by a competitor and are reluctant to put your core business at risk by selling to them

In the last year or so, several suppliers have been either overtly or covertly shutting down their wholesale partner divisions. Overtly by disbanding their wholesale sales teams or covertly by refusing to take on new partners and encouraging direct sales staff to compete with their channel partners.

Why are some companies dipping in and out of the channel?

New ownership

When a company is taken over or receives significant new investment, new management find it hard to see passed the headline numbers. The comment, “If I can make three times the margin direct, why would I sell wholesale?” is common and a knee-jerk reaction is to pull out of channel. Often when sales don’t increase and their true cost-of-sale is calculated, the company will try to re-engage with resellers.

Wrong approach

Selling through partners requires a particular set of skills and the proper alignment of the organisation. Suppliers that are not channel-only have to work particularly hard to build trust and differentiate themselves. A common error is to view the reseller as the customer, forgetting they have to sell and support the products and services with hundreds or thousands of end user businesses. Resellers need reliable infrastructure and a consistent and timely flow of information. Suppliers need to make themselves easy-to-do-business-with by developing self-service ordering, provisioning and management portals.

Negotiation 101 – back to basics

I thought it might be useful to distil all the thousands of pages on negotiation available on the web, down to three important principles. Overarching all of these, is preparation. People who think they can walk into a negotiation and wing-it, relying on their wits and the benevolence of their opposite number, leave money on the table or undermine the chance of agreement altogether. 

Interest vs Position

The easiest way to explain this is by example. Reseller A goes into a negotiation with Supplier B. Reseller A’s position is that they want to buy product C for £10, which is below the £16 price they have been given by supplier B - £16 is the supplier’s position. The rookie negotiator immediately starts haggling over price whereas the veteran will always start with interests. The interest of the reseller is that they know what they need to sell for to win business at a reasonable margin. For this they need to buy at £10. The interest of the supplier is that they load extra features into product C that most of their competitors don’t offer – they can’t afford to sell much below £16. Do reseller A’s customers need supplier B’s extra features? If so, what could reseller A charge for them. If not, can supplier B offer reseller A, a stripped-down version of the product? Initial questions like “why is your target price £10?” and “what is included in your £16 price” are more productive than just throwing numbers around. Ask questions and avoid confrontation.

What is the balance of power?

This is important when you consider what happens if you cannot come to an agreement. Who suffers the most? What is your next best alternative and what is theirs. Take the example above, who has the power? You might think it is reseller A because they have many suppliers to choose from. What you won’t know, unless you ask questions and think through the answers, is that reseller A already buys most of their products from supplier B. The MD has been told by the CTO that the billing system cannot handle multiple CDRs and would need upgrading if they don’t buy product C from supplier B. Also at a certain level of spend reseller A gets a discount on everything they buy from supplier B. Supplier B would like reseller A’s business but the person they are negotiating with is a middle manager with no equity stake in supplier B and no sales target. To them it’s just a job and if they walk away from the deal there are no consequences. However, if they approve a deal below minimum margin they will be required to get permission and account for their decision. You must understand the balance of power before you start negotiating, so do your research and ask questions. Don’t be afraid to insist on negotiating with the decision maker.

We are getting the emails about Mobile Manager, but we don’t do mobile as a rule, as it’s too competitive and too difficult to manage.

It’s too competitive

The mobile space is competitive. How can we compete? We don’t have the resource to manage handset queries, returns, upgrades etc. and don’t have a billing platform to manage overages.

Customers come to us with package requirements and price points we can’t buy at never mind sell for and we don’t have the resource to manage multiple suppliers.

Have you thought about going SIM-only?

Do your customers need to upgrade to the latest handsets? If you have customers working within the NHS, healthcare, charities etc. they are more likely to be focused on saving money than having the latest handset.

You may have low users, making very few calls and texts who hardly use their data package. Many business users want unlimited calls and texts but want to choose their data allowance to suit their requirement. There will be some customer types, financial services for example, where having the latest handsets and hardware funds is also attractive.

Partnering with companies such as Jola, gives you access to differentiated packages and competitive pricing. By partnering with one company you get access to the best deals from two networks, O2 and Vodafone, with EE in the pipeline. We create packages to suit every pocket and are unique in our ability to tailor packages with additional bolt-ons, available when required.

It’s too difficult to manage

Without a portal to pro-actively monitor usage, how do we protect customers from overages? We have had customers taking their devices abroad not realising how expensive it is to use their phone and download files in some countries.

There isn’t a single supplier in the UK voice and data industry that owns and operates 100% of the infrastructure on which their products and services depend. The emergence of the cloud has encouraged many centres of excellence to flourish and interconnect. This enables channel suppliers like Jola to knit best-of-breed suppliers together with software and service wraps to match the needs of our resellers and dealers. However, this approach brings with it unique challenges in support and incident management.

How quickly are you notified?

Should an incident occur, you need to know what the problem is and how long it will take to be fixed. You want to be on the front foot, pro-actively contacting your customers with detailed communications regarding the incident. If all suppliers in the chain do not have a well thought-through incident management process, a wave of dissatisfied end-user customers will quickly build, with the last reseller in the chain taking the brunt of the criticism. Organisations not used to dealing with the channel may not understand the imperative for fast, accurate information. Those that are not channel-only will often prioritise their direct customers over their channel partners.

How should it be done?

Ideally incidents are categorised by priority. We use the UTIL guidelines categorising incidents by impact and urgency, P1, P2 etc. Suppliers need to get the initial communication out to customers within the first 30 minutes (we aim for 15) explaining the issue. It is important to have clear communication between the engineers working on the problem and the support team managing calls and communications. Updates need to be at least hourly. Communication paths need to be established in advance between suppliers and departments for effective updates.

Jola recently exhibited at Channel Live at the NEC. It was a great opportunity for IT and Telecoms providers to compare suppliers side-by-side. For Jola, the event was a success as we achieved the targets we set. How do you measure the effectiveness of your sales and marketing?

Do you use these measures?

Key marketing metrics are leads generated, conversion rates and spend against budget. Brand awareness, product and messaging recall and customer satisfaction indexes are also useful. For sales, it is revenue and margin against target across the portfolio, as well as growing active partners. Effective sales and marketing teams will regularly achieve targets set in line with the business plan.

What are the must-haves?

When partners ask us about setting up new sales and marketing campaigns for our products, we start by looking at objectives and targets to measure success against. As a starting point partners need the right products at the right price to support their customers and want appropriate self-service portals and white label services. They want a reliable supplier, who will work with them to fix problems and help their customers improve productivity and save money.

Materials

Next they need materials to help generate new leads, information to populate their web site and customer newsletters. They want detailed sales proposals, explaining key benefits with more in-depth technical information available on request.

Resellers looking to add hosted voice to their portfolio often feel that hosted voice propositions are all the same. Is this the case?

Inclusive Features

Each supplier packages their offering differently. Some have stripped out basic features to offer an attractive headline price.  When you start to add key features back in, you may see a very different price per seat. Others have bundled in all the common features and have competitive add-ons to customise offerings. In either case it is important to know what your customers expect as standard and what options they are willing to pay for. 

Free Calls

Which suppliers include free calls to UK landlines and mobiles? Is this something your potential customers will require? Is there a licence-only price without calls? Are you able to pool allowances across customer sites and what happens when an individual user or customer exceeds the Fair Use Policy?

Call Director

What happens if your customers lose internet connectivity or power? Can customers dial out from their mobiles? This is a useful benefit for customers concerned about reliability. Some suppliers offer an ‘Anywhere’ feature so you are never without a phone system.

If you sell mobile SIM cards to SMEs, you may have customers calling in, wanting to activate, cease, bar or swap SIM cards. You have sent an email to the appropriate supplier and have repeatedly checked for a response. You have then called to chase your email and are having target response rates explained to you. In the meanwhile, you are being chased by your customer, who is questioning their importance to you as a customer.

If you had a management portal, you could make changes during the phone call. With real-time APIs, the actions could complete whilst you are still on the phone. Better still you can grant the customer access to be able to manage this themselves.

Mobile Manager is an online management portal for ordering and managing estates of mobile data SIMs. The portal communicates with Vodafone and O2 networks, enabling partners to create customers, manage activations and instantly control SIM swaps, bars, ceases, tariff changes and bolt-ons.

 1. Catch people doing things right 

Constructive criticism is a myth and an oxymoron. Nobody likes to be criticised and for self-preservation many will erect their esteem barrier as soon as they see it coming. Try this experiment for a week and see what happens. You are only allowed to catch people doing positive things, you must be precise and you cannot use the terms ‘good’ or ‘bad’. It doesn’t even have to be exceptional. For example, you walk past someone talking on the phone and when they have finished you make a point of taking them aside. You say something like “If I was the customer on the other end of that phone I would feel welcome, and comfortable that you have the skill and ability to resolve my issue”. Explain exactly why and leave it at that. Don’t finish with clichés like “keep it up” or “well done” and definitely don’t try and balance the feedback by commenting on a weakness (“yes…but”).

2. Focus on strengths 

If you spend all your time trying to improve your weakness then all you are likely to end up with is strong weaknesses. You are the boss and you decide what you are going to do. If you find spreadsheets tedious and time consuming then stop building your own business plans, forecasts and ROI models. There are potential employees coming out of university now that can use spreadsheets ten times quicker than you and at a fraction of your cost. Spend your time on activities for which you have a passion and that only you can do. Instil this in your managers and staff. If someone has a weakness that is core to their job then ‘zoom-out’ and find a way to focus them on their strengths. I once had a salesperson who knew the products backwards, he was smart and asked great questions. Customers loved him and he worked really hard. However, he had a real problem with rejection and when he failed to get an order or was knocked-back by a prospect he was miserable. Being in sales he was miserable a lot. I persuaded him to apply for a product managers job. He was reluctant because the salary was less than his OTE as a salesperson but he accepted the fact that he was unhappy and ended up taking the job. He now runs his own business. Obviously if you have a salesperson that has a problem with rejection and they also are lazy and disorganised, you don’t move them into product management just because they understand the products.

Consumerisation is affecting Terms and Conditions and unscrupulous business suppliers are taking advantage.

According to the government-backed Money Advice Centre, 84% of consumers do not read Terms and Conditions online, before they sign contracts. With some Terms and Conditions exceeding 30,000 words (the length of a novel) this is not surprising and Ombudsmen are starting to side with consumers when disputes arise.

However, there is little sympathy for company directors when they take their consumer behaviour into work. As a fiduciary officer of your company, a leader and captain of industry you have a legal and moral obligation to read contracts before you sign them. If you don’t have time then have somebody else read them. Small companies cannot afford to ask a solicitor to read every contract but most of the contractual traps used these days are obvious and a magnifying glass, not a corporate lawyer, is all that is needed.

If it relates to a technical subject, like telecommunications, ask your IT company to read it for you. If they know they are going to have to support whatever it is you’re buying they probably won’t mind and they are likely to be aware of the common traps.

Most frustrating is the company that starts a tender process, thinking they are out of contract with their current supplier, when they are not. If they have fallen-out with the supplier they may not even ask them to bid and they don’t find out until the end of the process. If they do ask them to bid the incumbent will hope they can win the deal and sign them up to another onerous contract without ever having to reveal the original terms.

Jola recently worked on a bid with a partner that lasted around 12 weeks. It involved meetings, demonstrations, proposals and references. We won the deal against three other suppliers, including the incumbent. When the customer gave the incumbent supplier the bad news they pointed out that breaking the contract would cost £40,000. The customer had to reluctantly re-sign with their existing supplier but before they did we were given the original contract to see if there was a loophole. The customer had signed to have their call charges fixed for seven years, in a market where the cost of telephone calls drops every few months.