A Consultative Approach Leads to More Revenue
By Tara Seals
Simon Ginsberg, president of User Centric Communications, has a message: Customers can save a lot of money by looking at more than rates. By analyzing vendor selection and tax reduction, agents can create a larger reduction in cost for customers—and win the business. TAG caught up with him in April.
TAG: Tell me about the problem of telecom network "spaghetti."
Simon Ginsberg: Most medium-sized companies that don’t have a professional telecom staff have various vendors supplying their local, long distance and PBX services. Often, no one in the company really knows what they have. The first place I look to get a feel for this is the PBX closet. The level of chaos will often tie directly to the level of chaos in their network. This is important because it means that, most likely, the company has not taken advantage of a real network analysis. This means that you have an opportunity to save them money and improve their business process.
TAG: What sort of analysis is required for channel partners solve this for their customers?
SG: The key is understanding all of the rate elements for local, long-distance and other services, such as Internet, loop costs, PoP locations, and network strengths and weaknesses among multiple carriers. Even within the same carrier, there can be many pricing plans so it pays to understand them as well.
The long-distance market is very inefficient because of the complexity of LATA-based pricing. If you can understand the different network pricing and products really well, you can beat the competition most of the time if you can bundle more than one offering into the proposal. Sometimes it’s hard to keep it all in your head, which is why we wrote software to help us with some of the heavy-lifting.
TAG: What about vendor selection and tax reduction approaches?
SG: We select vendors based upon their reliability, service and billing. We find that some carriers take a lot more time to deal with and we need to factor this into the overall cost. The interesting thing is that the difficult carriers tend to be more expensive so it’s usually not an issue.
The tax reduction tries to leverage data and voice over IP, which are not taxed nearly to the same degree. The key is that we focus on the total cost, rather than the cost per minute. We try to explain to the customer that, for example, 2 cents per minute is totally different from carrier to carrier and is, therefore, not particularly meaningful.
TAG: Where are the revenue opportunities for partners in all this?
SG: By taking more of a consultative approach, not only can you beat the competition on price, but you are in a better position to up-sell other services. The value is in the customer relationship and customers are always looking for people that bring fresh ideas to improve productivity and save money.
TAG: As channel partners increasingly evolve to a more consultative role, how does this change the nature of the sales cycle, since rates become less important?
SG: It definitely increases the sales cycle. It also increases the longevity of the revenue stream. The key is to stay on top of the technology, so your offering won’t become outdated. Sales cycles of six months to a year are not uncommon in the medium to large business market. This creates significant cash-flow challenges for growing companies and I suspect a lot of consolidation will occur over the next several years. This is one of the reasons that we are actively pursuing acquisition targets to help fuel our growth.
TAG: What advice do you have for the channel partner community as voice and data converge?
SG: I think this is a tremendous opportunity. I think the key here is to offer products that target the CIO or IT manager. Ultimately, they will have much more say in telecom decisions as it will impact their infrastructure more. I would also be cautious because I think this convergence will happen slowly. Most PBXs out there are still traditional and IP Centrex is not widely deployed yet. I am not sure if the verdict is in on whether VoIP is a new product or just another niche within telecom. This will depend on the level of new productivity enhancing services the new IP platforms can deploy. The price savings alone are not enough.
I think the bottom line is that we want to sell products that improve productivity, not just decrease price. This gets the attention of higher-level decision makers who often focus on top-line numbers and productivity improvements rather than cost savings. I suspect we will see many different approaches here as companies lead with data and then try to up-sell traditional services.
TAG: Other thoughts?
SG: In some ways, we are in a sort of Dark Ages, where there are few products that have a lot of sizzle. Our approach has been to give a high level of consulting work, analysis and custom reporting to clients to differentiate ourselves and take us out of the cost per minute game. We have been extremely effective in selling to larger accounts because of our flexibility and custom features. We can do things that other carriers can’t.
TAG: Tell me a bit about what User Centric does.
SG: User Centric provides medium and large business customers with a custom-designed suite of products. Our software and network experts analyze current and future network demands, and then pick and choose among various network and hardware vendors to provide the best solution based on the client’s needs. Whether it’s utilizing multiple entrance facilities for a major call-center, to simply providing a custom-prompted conference calling platform to a hedge fund, we specialize in serving the customer that wants a custom-tailored solution to a meaningful issue in their business.