Although many an analyst prediction has VoIP adoption by SMBs going into hockey stick mode in a couple of years, a new survey by consulting firm Savatar finds that looking doubtful. At the heart of the problem is a carrier sales strategy that is entirely disconnected from the needs of the SMB market, which is paving the way for channel partners and cablecos to seize the opportunity.
We have longitudinal data on this because of our ongoing surveys of SMB decision makers, and in this go-round weve seen a big flattening in demand, explained Savatar President John Macario, in an interview with PHONE+. I dont think this is a rejection by the market. And I dont think the projections are necessarily wrong. Rather, the service providers trying to sell to this market just arent doing a very good job.
As evidence, Savatar found that SMBs have a deep misunderstanding about what VoIP can do for them, pointing to a lack of clear marketing messages in the segment. Sixty percent believe they will save money on calling. But only 30 percent think that VoIP will be easier to manage. And less than 20 percent think it will be better than what they have now.
The early adopters for SMB VoIP have already bought, and to use an overused metaphor, we are now standing at the chasm and we have to figure out how to cross it, said Macario. You now have to sell to the mainstream, and the typical SMB is not going to make a change to the business unless there is a compelling reason. 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 arent doing a very good job at communicating any of that.
SMBs are also confused as to which flavor of VoIP to go with, indicating a further lack of communication. In the survey, the companies that have already bought VoIP are evenly split between trunking, hosted solutions and premise-based options. About 60 percent of SMBs with fewer than 50 employees say they dont know what they want. The remaining 40 percent is evenly split. However, Macario said most large companies that have a holistic portfolio of hosted and on-premise solutions are incapable of leveraging that. Inevitably, you end up being directed to a salesforce that sells only one of those, not all, he explained. So the pitch for the SMB is on a product, instead of the salesperson sitting down to talk about what the right product would be for the business at hand. Theyre very much stuck in sales silos.
In addition to a lack of a consultative, educational pitching process, the typical carrier approach to quoting is far from inviting. The larger the service provider, the more pain and suffering they put the SMB through, Macario explained.
As part of its research Savatar put out RFPs for VoIP for a client with 65 employees and three locations. If youre an SMB afraid of change, I would want a sales process that made me comfortable, where I got a quote in say, a couple of days, Macario said. We found that the large service providers average about six-plus weeks.
Not only that, but the task is arduous. But every time were on a conference call with one of the big carriers, it turns into an hour and a half engineering call, where three engineers are asking all sorts of questions an SMB just wouldnt be able to answer, Macario explained. As a carrier, I just burned four hours of engineering time on a customer that doesnt need any custom engineering. As an SMB, I dont need three engineers babbling on. I want dialtone, basic phone features, Web browsing and e-mail.
Macario said Savatars latest interaction with the big guys six weeks after initial contact was a request to get a quote within the week. We got an e-mail back saying that they had submitted our request for service to the technical review board, that they appreciate our patience, and that they would not be able to comply with our request to get a quote this week, he said.
Their processes, to be plain, are tailored to enterprise sales, not to SMBs, said Macario. And all of this is seriously impacting growth in SMB VoIP.
He added: Nothing about this is hard. Its sales and marketing 101.They just have to establish some basic blocking and tackling to get to market. So you wonder, are they really interested in selling to SMBs?
The disconnect between carrier sales strategies and the needs of the SMB is providing an opportunity for others in the market, especially cablecos and channel partners.
Its Savatars belief that the cable MSOs are waking up to the opportunity for selling business broadband, so its not a stretch to consider a voice product, Macario said. They already have a brand. If carriers dont get their act together, cablecos may just eat their lunch.
The MSOs do have a weakness, he noted, in their consumer-oriented past. The questions for them are, how do you support a business customer and how different is it from supporting consumers? Macario noted. If theres an outage, for a consumer you might say that well be there between noon and 4 tomorrow. But if Im a business and my voice is down, thats just not good enough.
Channel partners also stand to win. 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 said. Thats something most service providers are incapable of doing.
VARs can present a range of options for SMBs and champion the smaller service providers that have pre-packaged SMB solutions. The smaller companies are doing a great job in tailoring their messaging to SMBs, and theyre names that we may know, but ones that SMBs do not, said Macario. Bandwidth.com got us a quote in two days and it was a painless and educational process. Covad was also pretty good this time around. The problem is, SMBs say, who are these guys, and do I have enough trust in these guys to hand over the keys to my business? Channel partners can make the difference by vouching for such companies.
Macario said that while none of the carriers Savatar approached with a quote referred it to a channel partner, companies of all sizes would do well to embrace partners as a way to get to market: About 50 percent of SMBs with VoIP solutions in place went through a channel partner to purchase.