Tag Archives: Customer

Keep it Simple

I spend a lot of time looking at the products that carriers sell and one conclusion I reach is that simpler is better. I have found carriers with a multitude of options, with dozens of data products, many cable TV options and even many voice options. And I think I know where this came from. In the 90’s there was a movement to ‘give the customers more choice’ and I think that led some carriers down the path of customizing products for every customer who asked for something different.

But that does not seem to make sense for a variety of reasons. In probably the most extreme example, I know one carrier who has over forty Internet data products. This leads me to ask if a company really needs to be selling a 10 mbps, a 15 mbps, a 17 mbps and a 20 mbps data product? And the obvious answer is no. There is not enough practical difference between these products to justify having different ones.

It makes a lot more sense to have just a few data products. The companies that I see doing the best at selling data have three of four products, which can be characterized in terms of speed and price as low, medium and high, with maybe a fourth thrown in for a lifeline product. And they will have just a few cable TV options instead of the dozens of packages that I see at some companies. The same with voice, there might be a basic line and a line with unlimited long distance.

There are a number of reasons to keep it simple:

Customer service. It is important that all of your employees, from top to bottom in the company know your products. To some extent every employee in your company is a salesperson when they talk to the general public at or away from work. The basic triple play products are the core of what most carriers sells for a living, and if your employees don’t know what you sell then they can’t talk about your product to the public. As an example, every employee at your company ought to be able to instantly quote the latest prices and speeds for your Internet data product. This is an easy challenge to test – go out today and ask the next few employees you see if they can cite the speeds and prices of your basic residential and business data products. I would venture to say that most companies are going to fail this simple test.

Let’s face it – the success of your business depends on you being able to make a convincing story to customers of why your product is a better deal than the competition. For data products that difference is going to boil down to speed and price. Sales don’t just happen on the customer service lines, the opportunity is there every time one of your technicians is fixing something or an employee is standing in line at a grocery store. So make the products simple and make sure your employees can all cite your products and prices.

Sales, marketing. It’s much easier to market a simple product line. If you can summarize your pricing with a minimum of copy then you can spend your marketing efforts on talking about the benefits of your products and how you are a better deal than the competition.

And it’s certainly a lot easier to take an order from a customer when you don’t have to explain a ton of options. I can’t imagine the effort that is required in a company with dozens of data options when it is time to explain the product to a new customer or to discuss upgrading to an existing customer. Keeping it simple makes the whole sales process easier.

A simple product line also makes it a lot easier to build a customer portal so that customers can change products on their own. I just wrote last week how I recently went to AT&T wireless to change my voice plan and I was a bit overwhelmed by the number of options I had. I’m in the business and if I felt that choosing an option was a lot of work I wonder how somebody unfamiliar with the products in our industry must face these kinds of choices.

Provisioning. Whether you provision manually or have software that allows you to automatically provision products, having a simple product line is going to cut down on errors in provisioning. I talk to employees at carriers all of the time and a common problem I hear is that customers don’t get the products they thought they were signing up for. And when that happens you have started out on a sour note with a customer. With a simple product line, provisioning becomes a lot simpler because there are only a few options that customers can buy.

I do have a number of clients who have simple product lines. But even with those companies I will often see things like a phone product priced at $18.62 and it makes me wonder why it’s not priced at $18.99 or $18.49 or some number that everybody can remember. If you want your own folks to remember the prices, keep them simple as well.

Some companies seem to get this. I look at Google in Kansas City and their product line is downright sparse. They literally only have a tiny handful of products. I have written about them before and I think they have taken simplicity too far. But it’s easy to understand how much easier this has made their launch considering that they are new to the business.

So take a look at your product list with an eye to see if it’s simple and easy to understand. Or better yet, get some people outside of your staff to look at it. If the general public gets your products then you probably have it right.

 

 

What’s the Right Number of Staff?

NYC: American Intl Building and Manhattan Comp...

NYC: American Intl Building and Manhattan Company Building (Photo credit: wallyg)

Over the years a lot of my carrier clients have asked me what the right number of staff should be for their organization. And of course, to some extent the answer is – it depends. There are differences between carriers that make it hard to compare two companies that might have roughly the same number of end-user customers.However, even with that said there are some general industry metrics that I have used during most of my career as a guideline when I want to examine the level of staffing at a given company. These are metrics that I gleaned from my mentors in the industry, and it is a little surprising to me that these metrics still seem to be a good guideline thirty years after I first heard about them. A typical telecom company is far different today than they were thirty years ago, but they still have the same basic functions that need to be done – administration and back office, technical, install and repair, customer service, and sales and marketing.

The general metrics I have always used as a starting point to look at an individual company is as follows:

Small Carrier               – Under 15,000 customers

Medium Carrier           – 15,000 – 50,000 customers

Mid-size Carrier          – 50,000 – 250,000 customers

Large carrier                – Over 250,000 customers

The metrics for the right number of employees is expressed in terms of the number of employees per customers. Basically, the larger a company gets, the more efficient they ought to be in terms of that metric.

Small Carrier               – 175 customers per employee

Medium Carrier           – 350 customers per employee

Mid-size Carrier          – 500 customers per employee

Large carrier                – No idea

These metrics apply roughly at the midpoint of each range. This means that one would expect a carrier with 7,500 customers to have about 175 customers per employee and one with 32,500 to be at 350. It’s straightforward math to see the metric for any company by knowing the number of end-user customers they serve.

There are factors that can change these metrics for a given company. For example:

  • Side businesses. Many carriers run side businesses in addition to their core business. These might be such things as construction or telephone system sales. As long as these side ventures are paying for themselves, then the employees engaged in these business lines would not be considered as part of the metric.
  • Geographic spread. A carrier that has to cover a large geographical area is going to need more technicians in trucks than a company that is geographically concentrated. A company with widely dispersed exchanges is also probably going to need more inside techs.
  • Outsourcing. One has to look at what functions are outsourced. For example, a company that is providing its own help desk or NOC is going to be different from one who does not. In looking at staffing, though, one has to always question whether the company should be doing functions internally that could be better outsourced.

In my career I have rarely seen a carrier that is understaffed, but it is fairly common to find companies that are overstaffed according to these metrics. If a company looks at these metrics and finds itself to be overstaffed, the question is what to do with that knowledge. What I have found is that workforces tend over time to find ways to justify themselves. When there are too many staff internal processes will be less efficient than at other companies and the employees will have found tasks to keep themselves busy. These inefficiencies can be of many types including things like inefficient paperwork for installation and repair, excess record keeping for time and materials, or excess testing and maintenance being performed.

Another common issue in companies with too many staff is that every job is in a silo, meaning that each employee only performs the tasks for their own job description and do not do tasks outside of their silo. Silos are necessary for large companies but they can be poison to smaller ones. It is very rare for the amount of work needed to match up exactly with the number if silos, and so you end up with staff who don’t have enough work within their silo to fill a full day. In smaller companies a better structure is one where employees wear many hats and are able and willing to kick in around the company where needed. I know that I am visiting a very competitive company if I walk in and find an outside installer manning the phones because somebody called in sick. That is the kind of teamwork that is needed in smaller companies to be efficient.

It often requires an analysis by an outsider to spot these kinds of inefficiencies because over time it’s easy for people at a company to think that the way they do things is the only way. I have worked with many companies over the years who have undertaken to reduce staff to be more efficient and I cannot think of one of them that was not a more profitable and efficient company after the transition. It is never easy to make a decision to reduce staff, but it is sometimes exactly what needs to be done to have a better and more profitable company. But before using these metrics to reduce staff get an outside opinion because these are ideal metrics and there are reasons why you might need a different number of staff than suggested by these metrics.

The Right Way to do Customer Surveys

Customers

Customers (Photo credit: Vinqui)

Carriers are always being advised to find out what their customers really want and one of the best tools to do that is a well-designed survey. I use the term well-designed, because you can’t put any credence into the results of a survey that is not done correctly. I see many surveys done incorrectly, with the results being that a company will act on the results of a survey that may not reflect what customers really want. There are a number of steps that must be taken to get an accurate and statistically representative survey.

Adequate sample size. You must complete an adequate number of surveys to get the results you want. Most business surveys are designed to get results that are 95% accurate, plus or minus 5%. What this means that if you were to give that same survey to every customer you would expect the same results within that range of accuracy. Most businesses and political surveys find that to be accurate enough.

There are several online websites available that will calculate the size of the sample needed. Most people find the number of needed samples surprising. To get the 95% accuracy, if you have 1,000 customers you need to complete 278 surveys. If you have 5,000 customers you need to survey 357 of them, and with 20,000 customers it’s 377 surveys needed.

I often see companies conduct surveys that produce far fewer completed surveys than these sample numbers. Such surveys are valid, but the amount of accuracy is not as trustworthy. For example, if you have 5,000 customers and you complete only 100 surveys, the results could still represent a 95% accuracy, but only within a range of plus or minus 10%. That doesn’t sound a lot less accurate, but it means that there is almost a one in five chance that the results do not reflect your whole customer base.

Random. For a survey to be valid the people surveyed must be selected at random. If you are surveying your own customers it’s easy not to be random. For example, if you send out a survey in your bills, the results you get back are not random. They are biased by the fact that people who either like or dislike what you asked about are the most likely to respond while people who feel neutral about the topic are likelier not to. The only really reliable way to get a random sample is to call people. And even then you have to choose the numbers randomly.

Calling has several issues. You must consider the Do Not Call lists that the federal government has established for people to opt out of getting solicitation calls. You are allowed under these rules to call your own existing customers, but you are not allowed to call potential customers who are on the Do Not Call list.

Second, you need to deal with cell phone numbers since many customers no longer have landlines. To get an adequate sample you need to somehow call people with both types of phones. You are not legally allowed to make solicitation calls to a cell phone number unless the person has given you permission to do so. Hopefully you will have customer records that provide a contact number to call for each customer, and any customer who has given you their number has given you permission to call them even if it is a cell phone number.

Non-biased. The questions you ask must be unbiased, which means that they are not worded in such a way as to elicit a certain response. This is why so many surveys you take seem to be somewhat bland, because the questions are written without flowery adjectives.

Interpreting the Results. Companies often misinterpret the results of a survey. The 95% accuracy that is the goal of the survey only applies to the primary questions you ask. For example, if you gave a valid survey to all of your customers and asked a question such as if they would be interested in buying cellular service from you, then the response to that question would be 95% accurate. However, companies often try to interpret a survey question at a deeper level. For example, they might look at the results of the same question for men versus women respondents and say that one group is more likely to feel a certain way than another.

And you can’t make those kinds of interpretations with any accuracy. In this example the survey is an accurate representation of how all customers feel because you sampled enough customers to get a statistically valid result. However, if half of the people you surveyed were women, then your survey of women is only half as big as the overall survey, and correspondingly less reliable. In this example it wouldn’t be a lot more unreliable, but if you try to really subdivide the sample population the results become nearly worthless. For instance, if you try to analyze the results by various age groups of ten years each you will find that you can’t rely on the results at all.

Survey fatigue. Another common problem is survey fatigue where a survey is so long that a lot of people hang up in the middle of it. It’s important to try to keep a survey under five minutes or this will happen a lot.

Summary. If you are going to spend the time and money to do a survey then you should spend the extra effort to do it right. Make sure your sample size is adequate. Make sure the survey is given randomly. Make sure the questions are unbiased. And keep it short.

And as a reminder, CCG has done hundreds of surveys, so one way to make sure it’s done right is to engage us. We can help at every level from helping write the questions setting sample sizes or even making the calls.

Customer Portal

I have talked in other blog posts how I believe that the successful residential service provider in the future is going to have a choice to make between being what I call a dumb pipe provider or a full service provider. And there are merits to both approaches.

But should you elect to take the service provider approach you will be selling many smaller and niche products to your customers instead of the handful of major products you sell today. It may be a decade until voice and cable TV become 100% commoditized, but every year there will be fewer and fewer customers buying those traditional products.

One of the tools that service providers are going to need for selling multiple services to customers is a customer portal. This is a website that allows customers to see a menu of what is available to them. Last week I wrote a blog entry about upselling your current products to your customers as a way to immediately affect bottom line and a well-designed portal is a great tool for enabling that process.

Here is what I envision as the perfect customer portal:

  • The ability for a customer to see what services they are already buying today.
  • An easy-to-use menu that shows what else is available, categorized to make it easy for a customer to browse your products.
  • Product descriptions that explain the benefits of each available product.
  • Ideally, a video or demo for more complex products showing how they works.
  • The ability to offer sales specials as a customer browses to entice them to try the product.
  • A tie-in to your provisioning system so that the customer can buy, or even just try the product as they shop.

There are a number of customer portals in the telecom world today and I have yet to see one that works in this ideal way. Just last week I went in and changed several things on my AT&T Wireless bill. I found a lower cost voice package and the portal let me easily change plans. But in doing to it deleted my text messaging plan and decided I desired to pay 25 cents per text message. That took a call to fix. And I wanted to delete a feature that gave me lower cost international calling and that also took a phone call to fix. There is nobody bigger than AT&T and they don’t have their portal figured out correctly. But what they did have was a lot better than nothing because it enabled me to familiarize myself with their various plans so I could decide what I wanted, without having to involve a person in that process. I was glad to have the portal, and I just wished I didn’t have to make two phone calls to finally complete what I wanted to change.

Some of the better portals I have seen are from the major cable companies. They often offer so many different programming packages that having them all explained on a portal is a great way for a customer to shop without tying up a customer service representative. But from what I can see, none of them yet give customers the ability to change products without talking to a live person before it is finished.

I think a lot of companies hesitate to build a portal because they don’t want to commit the resources needed to build the ideal one. But there is no reason to wait since even the largest carriers haven’t perfected the customer portal yet. There is nothing stopping you from starting your portal now to let your customers see the wide range of your existing products. Every one of my clients has a number of products that they barely sell. I believe that there are a lot more customers who would buy products like unified messaging if they understood what it could do for them and if they knew that you offered it. Think of building a portal as a way of communicating with your customers.

If you are going to start a portal or improve an existing one you should consider including some of the following functions:

  • Let customers check their bill on-line.
  • Let customers make a credit card or bank debit payment.
  • Let customers change product parameters like their Internet bandwidth.
  • Make it easy for customers to order Pay-per-view events.
  • Let’s customers place a tentative order even if that just prompts you to call them back.

So I recommend that you create a portal today that does some of these functions. There is probably not going to be some magic program available that is going to let you create the perfect customer portal all at once. Rather, this is likely to be an ongoing process. Because of that, do what you can for now, but do so in such a way that you are prepared to evolve your portal into a powerful tool for you and your customers.

Finally, I would note that there is an additional set of functions that are sometimes referred to as a customer portal. On smart switches you can build a web interface so that customers with advanced voice features can maintain the settings for those products. While this is certainly a portal function, this is more of an operational function and not a marketing function.

Managed LAN Service

local area network

local area network (Photo credit: benschke)

If you serve business customers you should consider offering managed LAN service. This is a service where you manage your customer’s LANs for them. The service has been around for years and was often provided by local IT companies. But as LECs, CLECs and cable companies have become more data-centric and are delivering Ethernet to businesses, the line between wireline provider and IT provider has blurred.

Customers want managed LAN for a number of reasons:

  • Eliminates staff and costs. With managed LAN a business would no longer need a dedicated IT person on staff. Before my own business went virtual we had a staff of about 15 in our office and we needed a full-time IT person to support us. This was an expensive overhead that I finally avoided by going virtual, but that many businesses still incur. Some businesses have solved this by hiring part-time IT help, but that is still more expensive than a managed LAN service.
  • Saves on Investment. The servers and software to support a LAN are costly. In our industry we are already familiar with helping customers made decisions about buying PBXs versus lines and this is the same sort of decision for a business.
  • Takes Away from the Core Focus. Businesses should focus on what they do best and not become IT shops.
  • Trusted Vendor. Many businesses prefer to work with somebody they know and trust. There are numerous online data centers and vendors promoting things like Managed LAN and IP Centrex, but most businesses will not trust their data and communications needs to an anonymous company in the cloud. Many businesses also prefer their data being stored somewhere locally and not in a faraway state.

The decision to offer Managed LAN Service should be driven by your philosophy as a carrier. I have talked in other blogs about the choice that you have to either be a dumb pipe provider or a full service provider. If you want to be a full-service provider, then helping your business customers with their data needs is probably a better long-term strategy than helping them with their voice needs. Many businesses are now totally reliant upon their data and as a full-service provider you can assure them that their data is secure, stored redundantly and accessible where and how they need it.

There are several ways that you can offer the service:

  • Operate the Customer’s LAN Remotely. This is the traditional model that has been used by local IT shops. Normally the customer is still expected to own the equipment and software and the service provider just takes care of the LAN remotely. The problem with this approach is that the customer doesn’t save money on equipment, and you are going to have to visit the customer’s location from time to time, adding to your cost, and the price you must charge. One option is for you to own the LAN, but that still has you buying one device for one customer which is not any more cost efficient than the customer buying it directly.
  • Put the LAN in your Hub. The most competitive scenario is for you to put the needed LAN in your own central office or headend. This allows you to buy servers and storage devices that can serve multiple customers, thus allowing for a savings on hardware and software. It also allows you to run all of your managed LAN customers with the same underlying hardware and software, making it easier to operate and troubleshoot. And if you are also the one supplying the data pipe to the business you control the customer’s data from end to end.
  • Outsource to a Data Center. If you only have a few businesses that want this service, or if you don’t have the expertise to do this, you can buy these services on a wholesale basis. There are numerous data centers around the country that offer these services and you can repackage this and still make a profit.

Selling Managed LAN opens up the door for a host of other services. A very popular service is redundant data back-up, and you will need to establish a second storage hub or else work with a data center to back up data you store at your location. You will also find that businesses that use you for Managed LAN will look to you for all of their IT advice and will ask for your help to buy and repair computers, implement custom solutions like transparent LAN or video conferencing, etc. So this business line will create an opportunity to sell your technician time on an hourly basis.

The main advantage of this business line for both you and your customers is that you can provide them with a unified solution to all of their data needs. If they use you for Ethernet and voice and somebody else to manage their LAN then they are not getting the ideal data network with seamless integration of voice and data. We always talk about customer stickiness in the industry and I think this is the best ‘stickiness’ product you can offer.

Value Added Selling – The Only Way to Go!

Customer Service Think Tank hosted by Dell

Customer Service Think Tank hosted by Dell (Photo credit: Dell’s Official Flickr Page)

Today’s guest blogger is Mike Fox. He was one of the founders of CCG and we still work together on a number of projects. Mike is working at Fox Management Advisors and can be reached at (307) 431-6543.

In my last blog I discussed how it is important for your customers to make an emotional attachment to your brand.  You want them to think of you first when they are in the market for any telecommunications product or service.  A corollary concept is for you to focus on adding value to everything you sell.  Many telcos are order takers.  By that, I mean that they sell a suite of products that customers know and understand.  The customer is already sold. This has been the nature of the telephone business for many years.  Furthermore, for a long time, customers really had no choice but to call the telephone company when they wanted telecommunications services. So, we all got into the mode of order taking rather than selling value.

But, the world has changed in this regard (as you well know)!   The telecom world has entered a new age.  Residential customers are dropping traditional voice (landline) and video (cable TV) services at an alarming rate. Businesses are no longer happy with just vanilla voice lines or trunks. The successful communications company of the future must sell products that are different from what they sell today. These products must be attractive to the new generation of customers.  This will force many companies out of their comfort zones.  How (and what) do you sell to customers who only want broadband from which they will tie in various Over The Top (OTT) devices like Roku?

Are there additional revenues beyond simply providing the Internet pipe?  Of course there are, but they may be harder to identify and even harder to monetize.  This might mean selling products like IP Centrex, cloud services, SIP trunks, unified communications, advanced security, transparent LAN, MVNO wireless or a host of other new products. And a decade (or less) from now it will mean selling products that we haven’t even envisioned yet.  Some smart guy or gal is in their garage as I type thinking up the next “killer app” for our industry.  We just have to be ready to sell our customers on the value of this new product. Not just on the value of the new product, but HOW the new product will be valuable for them.

Selling a new product that customers don’t fully understand requires different sales skills.  You need to educate the customer on the benefits of the new products – i.e, consultative sales, which is quite different from order taking. Consultative sales means sitting and understanding what the customer most needs, and then offering a package from the suite of possible products that best fits the customer’s needs.

Actually, the very first step in selling a new product is for you to understand the VALUE PROPOSITION of each product in your portfolio. The value proposition means knowing how a product will benefit the customer. You cannot sell new products just by showing that they are new; unfortunately, many sales people take this approach and try to sell the ‘cool’ of the new product rather than the value. You have to show the value and make the customer understand how this new product or service will make their life or business better.

Finally, in order to understand the value proposition you must know your customers well. As I said in my previous blog, make them part of the club. Get to know them, and encourage them to get to know you and your company. Basically, you need to get out and talk to your customers.  Find out what they are looking for, what excites them, and what their needs are both now and in the future. Once you understand those needs you can craft products and services that will provide what your customers want; and you will have built the foundation to support a strong, loyal customer base.

Will Poor People Get Google Fiber?

FiOS installed in Montclair, New Jersey

FiOS installed in Montclair, New Jersey (Photo credit: Wikipedia)

This was a great question that was posed by a recent article in Forbes Magazine. In this country we have a long history of having telecom provided by monopoly telephone companies and more recently by cable companies. Both incumbent providers have been mandated to serve almost everybody in their footprint. In the case of telephone companies this has been done by regulatory fiat by the various state Commissions that regulate telephone service in each state. Every state has rules for incumbent telephone companies that include a requirement for universal service using a concept known as carrier-of-last-resort. When a telephone company got the right to serve an area they were expected to provide service to everybody in that area, within reason, and then the costs of the more expensive-to-reach customers was averaged with everybody else. I say within reason, because even the telephone companies were allowed an out for really expensive-to-reach customers. For instance, if a farmer lived back a seven-mile long lane, the phone company might only provide a mile or two of the service line and expect the customer to pay for the rest.

And cable companies had similar requirement that came through the franchise agreements that they signed with local governments. If a cable company wanted to serve a town, then they were required to serve everybody in town in order to get the franchise.

Today fiber is being built by both regulated monopoly carriers like Verizon, but also by competitive providers like Google. But none of the fiber builders has the same carrier-of-last-resort or cable-like franchises requirements that the incumbents faced when they built their copper networks.

So to answer the opening question, will everybody get Google fiber?  The answer is no, for the following reasons:

  • Copper is still in place.  As long as the copper is still in place for the telephone and cable company, they can satisfy their service obligations by connecting customers on copper. They are thus relieved of building fiber everywhere as long as copper still exists.
  • Exclusive contracts with MDUs.  Anybody that builds with fiber needs to get the approval of the owner of multi-tenant buildings, be that apartments or multi-tenant business buildings. And some of those building owners are not going to give permission. Some building owners will have signed exclusive access contracts with the incumbent cable company. The FCC invalidated some types of exclusivity a few years ago, but there are still contractual ways for the cable company to keep out competition. Further, some building owners just don’t want to let a provider into their complex.
  • Places too expensive to serve.  Fiber overbuilders can pick and choose where to serve. It is often very expensive to bring fiber into apartment buildings, particularly older apartments, and many fiber builders choose to not build or selectively build to apartments. Verizon is famous for avoiding high-cost places. If you look at a suburban map of Verizon FiOS you would find a real patchwork of served areas. They will build to one pocket of houses but then skip over ones right next door, certainly due to cost. For the most part Verizon has elected to not dig up streets to build fiber, and so FiOS is more commonly placed in neighborhoods with existing Verizon aerial wires, or in neighborhoods where there is existing conduit in the ground. Verizon also often skips past apartment complexes. But I don’t want to single out Verizon since this is true of just about every fiber overbuilder.
  • Redlining, or the nearest thing to it.  As the article suggests, the build-out patterns of Verizon, Google and just about any other fiber overbuilder have a significant taste of redlining about them. It is easy for the fiber builders to say they are building where the cost is the lowest and the returns are expected to be the highest, but this means that they generally end up avoiding large apartment complexes and poorer neighborhoods. If they had set out to deliberately redline they would end up with basically the same networks that actually get built.

And so we are entering a future where there will be definite fiber haves and have-nots. There has been a lot of this for the last few decades since the introduction of DSL and cable modems. Rural areas for the large part have received very little broadband compared to urban and suburban areas. But the future digital divide is going to be starker, with the divide being everywhere, including the cities and suburbs, with some homes having fiber and others not.

For the last decade there has been conventional wisdom that having fiber connected to your home will add to the value of your house. I guess we are going to get to see this tested on a very large-scale.

Know Your Fifty Biggest Business Customers

Customers

This is an idea that is so simple that I almost didn’t make a blog entry out of it. But every service provider should personally know their largest business customers. I arbitrarily set the number to fifty customers, but fifty is not a magic number and there is some number that is right for every carrier.

When I say that you should know them personally I mean just that. These customers should get a visit from you every year. You should do your best to get to know each of these customers well and understand their needs. Talk to them about their business and understand how they use your existing products. If this blog has highlighted anything, it is that the needs of business customers are evolving and changing quickly, so you should also be talking with these customers about how you help them to meet their needs in the future.

Starting this process is easy. Generate a report each month that lists the highest billing customers. As you compare these results month over month you will begin to see the top customers in terms of billing.

As you find out what your largest customers want, you are going to find out that you have holes in your product offerings. You might find that these customers are buying some things elsewhere or else are going without features and products they would like. It would not be surprising to find that some of them are thinking of changing service provider. Often you will find out that they don’t know what they need in terms of product, and part of the reasons for these visits is for you to educate them on the wide range of business products that are available to them today.

The businesses should welcome your visits if you come by to get to know them and advise them. You are not be building loyalty if you only visit your customers when they have a contract expiring or some similar event. Loyalty instead comes when they know you care about them and their success.

Most service providers I know can name their top few customers, but it’s rare to find somebody who can name their top fifty. And it is far fewer who have made it a priority to visit their largest customers every year. Visiting fifty customers is one visit per week. Find a way to work that into your schedule. You will love the results.

Customers – Make Them Part of Your ‘Club’

Today’s guest blogger is Mike Fox. He was one of the founders of CCG and we still work together on a number of projects. He is working today for Fox Management Advisors. Mike can be reached at (307) 431-6543.

MotorcyclesFor the past decade or so, the telecom industry has made great strides to become more competitive and focused on evolving customer needs and desires. However, we still have a long way to go. Our industry is changing and many products and services that were once ‘cash cows’ are now becoming almost ‘commodity’ services (although, in reality, treating any of your services like commodities is both dangerous and fundamentally wrong – I’ll address this in more detail in a future entry).

For example, long distance used to be a huge money-maker for telephone companies. Today, with unlimited (although, not ‘free’) calling throughout the US as part of most calling plans (landline or wireless), the world has changed. For those of us old enough to remember, it wasn’t that long ago that every long distance call was carefully scrutinized by our parents! Today, we don’t care who or where our kids call, just so long as they don’t go over the minutes in their plan.

So, how do we structure our sales culture to attract and keep more customers? What makes them sticky? Is it price? No, that’s commodity sales think. There will always be someone willing to offer lower prices. Sure, you have to be price competitive, but you should never sell on price.  Rather, sell on value and work to generate loyal customers. Many of the most loyal customer bases in the world are very willing to pay above market prices for the stuff they want. Think of Harley Davidson, Apple Computers and Starbucks. All provide products and services at prices above their competitors, but their customer base is extremely loyal and willing to pay such prices. And, it’s not just about quality. Sure their quality is good, but it’s more the subjective aspects that make these customers loyal – e.g., it’s fun to be part of the Harley club! Simply put, passionate, loyal and, ergo, sticky customers have an emotional attachment to the brand.

Do your customers feel passionate about your products and services? If not, that can be changed.  Find a way to make help your customers connect with your products and services in a personal way. While there are many ways to accomplish this, one important aspect is to nurture your personal relationships with your customers. Make them feel like they are part of your community and an important part of your community. When I lived back east, I became friends with a manager at an Acura car dealership. Over a period of 9 years, I bought several cars from him, even two used vehicles that were not Acuras. I love the Acura brand, but that isn’t what brought me back since there were several other Acura dealers in the area. Rather, every time I walked in that dealership (and I did many times when I wasn’t buying), they made me feel welcome and ‘part of the club’.  It was fun and whenever I was in the market for a new car, that’s who I went to first. Let’s figure out a way to make your customers think of you first when they think of ANYTHING related to telecommunications. Even if you don’t sell what they need at the time, encourage them to come in to the office and just talk. Who knows, it might result in a sale and it certainly will encourage them to come back the next time when you do have something they want.

Give the Customers What They Want

I have a friend Danny who is a CPA and he is doing something that I think is brilliant. He has taken over the accounting practice from his 72 year-old father and he also has a number of other older accountants who help him during tax season. (And I don’t use the term “older” accountant nonchalantly, being one of them myself).

For several years he has tried to force the older accountants into learning new tax and accounting software and they have resisted vehemently. Their arguments are that they had multiple years of tax returns from their clients in older legacy programs and they also were just not interested in learning yet another new program. In fact, his father told him that if he was forced to learn a new system he would just stop helping him. And the clients all love his father.

And so my friend Danny did a brilliant thing. He went out and set up his own private cloud network. He put all of the new software into the cloud that he and most of the staff use, but he also sent the various older legacy software that the older accountants wanted to use into the cloud. And he chose to use a cloud so that anybody could work with any of the software packages from anywhere.

He would have preferred to do this with an existing cloud computing service, but none of them were interested in helping him set up the legacy software, some so old that they are DOS systems. There are a number of cloud services that support new accounting software. In fact, one of the major selling points of most of the cloud service providers is that a customer will never again have to worry about having software that is out of date and the cloud providers tout how they will introduce every update from the software provider when it becomes available.

Accountant upstairs ↑

Accountant upstairs ↑ (Photo credit: jah~)ems. 

And the cloud providers are completely missing the point. Real life people don’t want software that is always up to date. My worst nightmare is to log onto a cloud server with a project with a deadline and find out that the program I use every day has changed and that I will have to spend hours figuring out the differences. People don’t mind upgrading software over time and we have all migrated through the many versions of Microsoft Office. But people are creatures of habit and our relationship with software has become almost intimate. Danny’s father is a perfect example. He won’t use anything newer than Office 2007. And this is his right – he paid for it and it still works. Upgrading software you use every day can be unnerving at best and traumatic at worst and is always a bit disruptive.

And so the cloud providers have some big lessons to learn if they really want to be successful with the average customer. The cloud providers have chosen to stress the benefits of always having the most recent version of software. And from an operational perspective this makes sense for them. They only have to maintain one version of the software which makes it easier on them in a number of ways. But this doesn’t make sense from the perspective of what their customers want.

In the telecom business we have a long history of offering a handful of standard products to businesses. And from the perspective of the telcos this makes sense for the same reasons that the cloud providers want to push one version of software – it’s easier on the telco in terms of staff training, operations and billing. Selling standard products is what Ma Bell did for a century.

I would argue that selling only ‘standard’ products is not in the long-term best interest of a telco. If your company only sells standard products then you have turned those products into a commodity. In a competitive world, customers have no reason to be loyal to you if they can get that same commodity from somebody else for less. But if you are willing to listen to your customers and give them a custom product that they want, then you have created a loyal customer who is likely to stay with you for a long time. I don’t think most telecom providers add in the cost of churn when looking at profit margins. It is worth spending more up front to get a customer who will stay with you than to sell standard products to customers who will always be price shopping.