article

Partner – Conferencing Up For Grabs

Posted: 07/2001

Partner Channel

Conferencing Up For Grabs
More and More an Important New Revenue Opportunity
By Tara Seals

As rising travel costs and geographic diversity make it harder than ever for management teams to maintain close contact, conferencing is becoming a ubiquitous facet of business operations and an important new revenue opportunity for service providers and their channel partners.

Wainhouse Research (www.wainhouse.com), an analyst group that specializes in the conferencing industry, reports that conferencing is used in almost all industries. About 80 percent of customers are corporate customers that outsource their conferencing business to service providers. And that means a large target market for channel partners, especially in lucrative niches such as small to mid-tier businesses that have a limited travel budget, companies with two or more locations, or businesses with remote sales people and telecommuters.

Analysts report that there are approximately 11 million meetings conducted in one day in the United States, and that number is growing. Meg Brancato, channel marketing manager for Genesys Con-

ferencing (www.genesys.com), says the cost of travel involved in many of these meetings is a prime driver for the purchase of conferencing solutions. “With the extent of travel that is done in today’s work force and with a slowing U.S. economy, the demand for remote meetings via conferencing services continues to grow,” she says.

MojoMeeting (www.mojomeeting.com) vice president Jennifer Brandt says the state of the economy also is a factor. “Companies are downsizing and looking for ways to cut overall costs,” she explains. “The savings in travel and staff time is enormous.”

Making the Sale

Analyst firm Frost & Sullivan (www.frost.com) reports that the use of audio-only conferencing is increasing at a rate of more than 18 percent per year. But the market still is not saturated, which makes it easier to pitch conferencing solutions than it is to sell deeply entrenched traditional telecom services, says Mike Burns, founder and president of A+
Conferencing (www.aplusconferencing.com).

Burns also notes that, unlike other services, fewer involved agents and less competition means more opportunity for those willing to enter the market. “I call this the $1.2-billion market nobody wants,” he says. “Unlike local, Internet and long distance, nobody focuses on it. But for an agent today–especially a new agent–it’s a good value proposition, because there are not that many other agents or salespeople out selling it in the marketplace.”

Also, because choosing a conference provider is a business decision that touches many portions of an enterprise, such as travel budgets, operating costs and the feature needs of those using the service, decision makers in the arena are less exposed to telecom pitches and therefore more willing to listen.

“The decision makers are a little different for conference calling–not necessarily the telecom manager,” Burns says. “It can be the vice president of marketing or investor relations, association heads, people in charge of seminars … it’s easy to get in the door because these people haven’t been hit up a thousand times before. You can even go to different niches within an organization and sell.”

Conferencing also represents up-selling and cross-selling opportunities within an agent’s existing base.

Ilene Goldschmidt, director of agent marketing for master agency Global Systems Telecom Inc. (www.theglobalzone.com), says agents often do not realize how much revenue they miss each month by not capturing conference calling for existing customers.

“When we originally began cross-selling these products to our existing base, we learned that if a customer is happy with the service, they will continue to use it for many years to come,” she explains. “Much of our original conference-calling base continues to benefit by using the products we provided to them so long ago.”

The “test drive” sales technique is also effective, says Brandt. Unlike a commoditized product like long-distance voice, conferencing products often have a “wow” factor.

“Customers can see the value instantly by interacting with the product,” she says. “Many of our agents have said that they have actually used MojoMeeting from their office to demonstrate and sell it to their customer base.”

For mining new opportunities, Burns says that, unlike long distance, telemarketing still is effective when selling conferencing.

“One agent we have makes cold calls, nine to noon, Monday through Friday,” he says. “And people respond over the phone. You don’t get to know these people personally. You can make 15 presentations an hour over the phone, whereas going out you’re pretty much shot with three appointments a day.”

Using the Internet also gets results, he notes: “Get your site linked to all the search engines, and you’ll find that you’ll get all kinds of business, maybe three or five customer sign-ups a day.”

Most providers help agents sell and understand the product with an array of support programs.

MojoMeeting helps the sales process along by providing an online agent management center that includes sales and management tools, and it also develops marketing collateral, direct mail and e-mail campaigns for individual agents.

Genesys works closely with the agent channel to develop and implement sales and marketing programs, conducts primary research and uses retail success stories.

Beyond Audio

Wainhouse Research predicts web-enhanced conferencing will grow at 30 percent annually, with revenues of more than $7 billion by 2005. As a distinct advantage, web conferencing provides control similar to in-person meetings, which an audio-only call cannot deliver, says Brandt.

“Worrying about who’s on the call or not, diagnosing noisy lines and keeping track of who is talking are all common complaints,”

she says.

Those complaints can be headed off at the pass with a web interface. MojoMeeting has all the features traditional conferencing has, and can be used as audio-only. However, the online portion of the service lets users see who is talking, view presentations, host web tours, share files, instant message chat and control the conference with features such as muting and dial-outs for missing participants, in real time. Also, corporate customers can private-label the service.

The latest MojoMeeting feature is “Question and Answer,” which allows users in listen-only mode to virtually “raise their hands” or pose written questions, to notify the host that they would like to speak. The host can then take them off mute. Additional features such as white boarding, video streaming and web casting are also in the works.

The availability of these enhanced services translates into marketing potential for agents.

“Web conferencing is driving changes in market structure and customer usage,” says Brandt. “As a result of this transition, existing customers are re-evaluating their current suppliers,” thus creating more revenue opportunities for partners.

Goldschmidt says, “Customers are learning that using conference calls including web features can save them time and money, rather than flying people in

for sales meetings, trainings or other events where it is important to include visual presentations.”

Genesys takes conferencing options even further. It offers audio, web, video and data conferencing. Products include Telemeeting fully automated, reservation-less conferencing, Powershare web conferencing and Genesys Open Media, which combines video, audio, text and graphics in a format tailored to meet specific customer requirements for individual remote presentations.

The Size of the Opportunity

Burns explains that, unlike other communications products, the margins and commissions in conferencing are still very large.

“You can make 50 percent margins on this product,” he says. “At a time when long-distance margins have been slashed, the agent doesn’t have a lot of room to make money there.”

He explains an agent can get a buy rate of 7 cents per minute, or, with an 800 number, 14 cents a minute. “We have people selling that at 35 cents,” he says.

The average conference call consists of eight parties for an hour, or 480 minutes for one call. The average business has five

to eight conference calls a month, which means approximately 4,000 minutes. At

an average rate of 30 cents per minute,

one account can mean $1,200 a month

in revenue.

“We provide them the last remaining high margin/high commission opportunity in telecom,” says Brancato.

Genesys agents, she explains, who work on commission rather than margin, in two or three months can receive monthly recurring commissions in excess of $5,000, and growing to $15,000 to $20,000.

Master agency Association Resource Group has benefited from embracing

the product.

“So far this year, we’ve earned 34 percent of our revenues from conference calling,” says Greg Praske, ARG’s CEO. “From all the people I’ve spoken with in the industry, I believe we’re the largest conferencing agency. We’ve been marketing conferencing for more than seven years now.”

As for downsides, Goldschmidt does offer one caveat to an otherwise positive picture.

“It is important to align yourself with the right conference-calling company,” she explains. “Excellent customer service is imperative. If the reservation center or operator has made any type of scheduling error, huge problems could arise due to the potentially large number of parties involved in the call. The impact on a business could be tremendous.”


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