Build It and They Will Come

This is the baseball field featured from the 1...

This is the baseball field featured from the 1989 movie Field of Dreams. This photo shows the field as seen from the bleachers that Kevin Costner’s character Ray Kinsella built at the beginning of the movie. (Photo credit: Wikipedia)

Over the years I’ve seen a number of networks built where the service provider didn’t really know how many customers they might get. I always called this ‘build it and they will come’ because they invested money into an expensive new network with the hope that sales and marketing efforts would somehow make the new venture profitable.

Sometimes this has worked and sometimes it has resulted in spectacular failures. In looking at the failures, I see that every one of them exhibited some degree of “build it and they will come”. There are a number of reasons why a telecom venture can fail, but the number one reason is not getting enough customers. The second most common reason is doing a poor job and not retaining customers after they have been signed.

You can’t always avoid ‘build it and they will come’. For example, if you are building a business-only telecom company in a larger market, there is no amount of research that is going to tell you ahead of time how you will do. Selling to business means slugging it out face-to-face with consultative selling and your success is going to ultimately going to come down to your ability to sale and the performance and the reliability of your network and your customer service staff.

But there are steps you can take that will help assure success in smaller communities or with business plans that include a lot of residential customers. Historically you could get pretty good market data using well-designed customer surveys. I wrote an earlier blog discussing why surveys are no longer a reliable took and I won’t repeat that whole argument here. In a nutshell, the fact that most homes no longer have a landline telephone has killed the ability to do a believable random survey in a small market.

So, if you can’t do a survey you can believe, then how can you know ahead of time how well you will do in a given market? If I was investing in a new venture today I would only commit the investment if I had pre-sold enough customers to assure myself of success. There are a number of ways to do this:

Strong Market Name. If you have strong market name recognition in a new market then you can get potential customers to pledge to your new network. This is the tactic used by Google in Kansas City. They have a strong enough name recognition that they could rely on customers to pledge that they would buy services if Google built to their neighborhood. Certainly every customer who pledges doesn’t follow through, but most of the do, and so, if you have a good market name, then some sort of a pledge campaign is probably good enough to give you assurance.

You don’t have to be Google to have a good name recognition. For example, a municipal provider might have a good name in their own City if they already do a great job in selling water, power and other utilities. In smaller towns a local nearly telephone or cable company might have a good enough name that most people in town know them and want their service. And in parts of the country where cooperatives are prevalent, a neighboring coop can have tremendous name recognition.

Canvas the Area. If you don’t have great name recognition, or if you are an unknown start-up, then you most effective technique is to do a door-to-door canvas and talk to everybody in the proposed service territory. That sounds expensive, but it is not nearly as expensive as building the network and then finding out that nobody wants to buy from you. A canvas is essentially a survey, but when you knock on most of the doors you overcome the limitations from a poorly designed survey and you can believe the results of a canvas if it is done correctly.

You also have to consider a few other issues such as if you want to take a deposit, and if so, will that deposit be refundable in the future. Taking deposits will eliminate some people from signing up, but you can feel pretty secure about building a network to people who ponies up money ahead of time – they want your service. If you really want to be sure before you build, make potential customers sign contracts. Just beware that such an effort is very labor intensive and will take a long time.

The days are gone where you can build a network and just assume that your marketing skills will make you successful. You need to put the marketing effort in up front, before you commit to the build. Only then can you have a good assurance that your new venture has a real chance of success. Anything less than that is a crap shoot.

Make Being Local Work for You

market 1

market 1 (Photo credit: tim caynes)

Today’s guest blog is written by Mindy Jeffries of Stealth Marketing. She will be writing a series of blogs that will appear here occasionally. If you want to contact Mindy you can call her at (314) 880-5570. Tell her you saw her here!

I look at small telephone companies and as a marketer I see tremendous marketing potential due to their advantage of being local. I would have a blast with marketing in these markets. Here are the questions I would ask myself and my team:

  • What is going on local in my community?
  • Can I create something that would be a resource to my community?
  • What could I do to bring my community together in the new virtual world? What could you do that is useful from the customer’s perspective?

I would find something the community needs, such as listing of local events and get it on the web. Then, using social media you have to advertise news of the local application that you have created and the content within.  This will start bringing people to your site to check out the latest news on what to do around town or the weather or whatever you choose.

Once you get your current and potential customers coming to your website or social media site for useful information, then the next step is to ask them for their email addresses. At this point, you don’t care if these people are customers or not, just provide each person with useful information. As you create value, your prospects and potential prospects will give you their information including email addresses because they want to interact with you.

Then you start housing this information in a database application that can automate, score and deliver very customer-specific news and offers to your prospects and current customers.  Your prospects get offers for new services, and your current customers get retention offers, or news on programing or movies or VOD coupons.

Start simple, but there are lots of ways to take a program like this to the next level.  You can incorporate your advertising clients and distribute their offers as well. This could be your retention program!  Some examples might be coupons for the pizza provider in town or coupons for the local theater.

Your imagination can run wild, but today digital environment exists to help you organize and filter messages and marketing.  Social media have changed the world.  Instead of always talking about you and your services, you need to look at the world through a customer/potential customer lens and asking the question from their perspective – what can I do through the resources I have, to make myself useful to them?

It’s an exciting times to be a marketer!

 

Sometimes You Need Sales

Customers

Customers (Photo credit: Vinqui)

Most clients I talk to have a marketing plan of some type. Some of them have a really great one and others just do the same thing year after year. But often when they talk to me about the issues they are having, it turns out that what they really need is a sales plan.

Sales is when you go out, look the customer in the eye, and explain to them why they should buy from you. There certainly can be some marketing aspect of sales, such as having door hangers to let people know you are coming, but there are some times in the life of a company when you don’t need marketing and you need sales.

So when is it appropriate to do direct selling and when should you use marketing? Here are some of the times when direct selling is going to give you better results:

  • When you extend your network into a new neighborhood. This might be new houses built in your existing service area or somewhere you have extended your network. In these circumstances you need to knock on the doors and make your pitch.
  • When you introduce a major new product and you want to get a lot of customers. If you are launching cable TV for the first time or getting into the cellular business, then knocking on every door in your service area is going to get you the most new customers the fastest.
  • When you haven’t talked face-to-face with your customers in a long time. I talk to clients all of the time who have never knocked on a door and talked to a customer in a cold calling situation. A company who doesn’t know what their customers won’t be selling the right thing. So if you have never had a door-knocking campaign or haven’t done one for a long time, then get out and talk to your customers. You will get some up-sales, but you will also get a lot of feedback on what customers would like to buy from you.
  • Any time you sell to a business. You should never use passive marketing campaigns to sell to business customers. It just doesn’t work. Every business thinks they are unique and the way to make them a loyal customers is to learn about their business and their communications needs and to then find them a solution.

So who in your company should sell? If this is something that is going to be needed only periodically, then you and your existing staff should be the salespeople. Nobody knows your company better than the people who work there. Remember that it doesn’t take a slick sales person or polished sales presentation to sell something that people want. It takes knowledge. And when I say you, I am talking directly to the owners and general managers of smaller companies. Get out and go door-to-door. There is no faster way to find out what the public expects from you and to find out what you are doing wrong and doing right.

If you are always expanding your network, or are always selling to business customers, then you need a full-time salesperson. There is a long list of issues to consider when setting up a full-time sales position and I won’t try to cover them in this blog. But there is definitely a right and a wrong way to operate a sales staff.

And finally, here are a few sales tips.

  • Be organized. If you are going to knock on every door in an area, make sure you talk to somebody at every house. This means keeping notes on who was not at home and making multiple visits. It may mean calling to set up appointments with people who are hard to catch at home. Don’t make one sweep through a neighborhood on a weekday afternoon and think that you have done a good job.
  • Take good notes. These will come in valuable later. It’s just as important to make notes about why somebody is not buying your service as it is to note the ones who do. If you are going to sell a lot there are good sales tools on the market that make it easy to organize notes. But if this is an occasional effort, then takes notes in whatever way works best for you but then transcribe them into a spreadsheet or database for future reference.

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.

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.

“Dumb Pipe” versus Full-Service Provider

Broadband and cable TV companies have been looking at their long-term strategy and they are going to have to decide if they are going to be what we at CCG call either a “dumb pipe” provider or a full-service provider.

A “dumb pipe” provider is a broadband company that sells a very fast Internet connection as its primary product and not much of anything else. A perfect example of this is what Google is doing in Kansas City. Google is selling a 1 Gbps Internet connection there for $70 per month. That is far more speed than is possible from the competition, but it is also more expensive. The only other product available from Google is one cable TV package that is bundled with the data for $120. Google only offers one other data package for low-income homes. Google doesn’t offer different size cable packages. They don’t offer voice. They don’t offer security, or cloud services or any of the panoply of new services that can be provided over fiber.

In my opinion Google has looked into the future and they believe that most of the other services that they could be selling will be available to customers over the very fast Internet connection that Google is selling them. One of the primary advantages to Google of the dumb pipe strategy is that they have a very simple product mix to sell. Fewer products means less staff needed to market, sell, provision and support customers.

The downside to the dumb pipe provider is that they will have a much lower average revenue per user (ARPU) than the full service provider. But both types of providers have a very similar cost of the network. And this is at the heart of the discussion that many of my clients are having about the long-term trends in the industry.

Most providers in the industry today are full-service providers. They support the full residential triple-play, have multiple options for cable TV, have multiple options for voice. They also sell a wide range of other products and their marketing strategy is aimed at getting the highest ARPU from customers they can.

But the full-service providers are worried when they look at some of the trends in the industry. They have already seen a lot of voice customers drop off the network. They are starting to see cable customers leave the network and they look ten years down the road and see a very different cable market. And so full-service providers are faced with figuring out how to go from where they are today to where they think they must be in the future.

I am starting to see evidence of the shift in the strategy of full-service providers. In the last year I have seen data prices being increased all over the country for the first time. And this is not because the cost of providing data is growing, because the margins on data have grown steadily each year over the last decade and are still growing. I think the service  providers have embarked on a long-term upward shift in data prices so that they will be getting more revenue from the one product that is likely to survive into the future.

The companies with the biggest dilemma are these just entering the market for the first time. Do they make the leap straight to being a dumb pipe provider, like Google, or do they become a full-service provider and enjoy the remaining years of high ARPU before voice and cable TV losses pull those numbers downward? It is a hard decision and a conversation I am now having with every new service provider.

Launching a New Product

At CCG we often introduce clients to new products. Historically our clients had the leisure to introduce products slowly since they were not operating in highly competitive markets. However, today we see speed to market being a major factor in being successful. Since there are many steps needed to launch a new product and because it will touch every part of your organization, it is mandatory that you are organized and have a plan to develop and launch a complex product on time and do it well. Lack of organization will inevitably lead to delays, or worse, to a product that is half-baked and full of problems.

At CCG we are experts at the process of launching new products and many of our clients now include CCG as part of the new product development and launch team. We can provide the needed discipline and the extra manpower and expertise needed to insure that a product is launched on time and is customer-ready.

The following (using the example of launching IP Centrex) is  a list of the basic steps required to launch a new product. This list is abbreviated but demonstrates how launching a new product will touch every part of your organization. Without a clear plan it is easy to get bogged down and delayed.

Steps needed to launch IP Centrex

Define the Product. Define the specific market for the product. In the case of IP Centrex, should you have different packages to reach different parts of the market? (For instance there might be a version for typical small business, a more complex product for more businesses like doctor’s offices, and a product for businesses with a centralized receptionist). Define the equipment and software needed to launch the product. What kind of handsets / functionality do you want to offer? Will you let subscribers use their own devices like smart phones and tablets? Will you support integration of phones and computer systems (Outlook, etc,)? Will you be supporting 911 portability (supporting 911 when the customer moves the phone off-premises)?

Determine Technical Readiness. Is your switch ready to support the product or do you need an upgrade? Will your OSS/BSS support the new product’s billing and operational requirements? If you are going to launch using something other than a softswitch, take the steps needed to choose the right gear and/or partner. Find a 911 mobility vendor to support remote 911 if you go this route. How are you willing to distribute the product – over your own network, over leased facilities, or over the open internet. Anticipate and address any IP addressing issues. Analyze the customer premise network requirements –  premise wiring alternatives, customer demarcation points, VoIP quality assurance capabilities, etc.

Product Pricing. Create a name and branding for the product. Determine the market prices of competing products (trunks for existing PBXs, B1s, traditional Centrex, other VoIP providers, etc.). Determine your pricing strategy (one price fits all vs. pricing based upon what the subscriber is using today). Determine your pricing elements (individual service elements like stations, talk paths, features and calling plans or a more all-inclusive element). Determine if you are going to sell and/or lease handsets as part of the product. Will this be bundled with other products like data or long distance?

Testing. Buy test handsets/stations. Activate and then test each switch feature with the handsets. Create a common or custom profile configuration for supported and chosen handset types. Make sure that you have an easy way to load the profile configurations into handsets/stations. Make sure the chosen features will work with each other (a common problem when combining multiple complex features). Test OSS and billing system.

Regulatory. Are tariff updates needed? If you are going into new markets will you need to open new 911 PSAPs? If sold as a regulated product, how does SLC charge apply? Are there any CALEA issues?

Sales and Marketing Readiness. Define the value proposition for the subscriber. Develop marketing literature. Update website. Develop order form that will capture the complexities of the product.

Internal Training. Train salespeople and CSRs on how to use the product. Train help-desk staff. Train anybody who will install or train on the product. Should your own company be the first test customer?

Customer Training. Develop customer training material/manuals.  Consider a web tool andor video tool. Develop training plan. Will you train every employee or train the trainers? How much will you charge for training? How do future subscriber employees get trained?

Implementation. Develop installation plan/checklist. Order IP stations. Perform any customer premise network changes required. Install and verify data connection(s). Install stations and any managed network equipment required. Develop plan to verify that every station is updated and provisioned correctly. Conduct subscriber training sessions. Ask for subscriber feedback on the quality of the implementation. Render and verify first bill.

NOC/Customer Support/Troubleshooting. How will you handle customer support? Will the first level of trouble shooting be done at the CSR level or by specially trained individuals? Who will have access to the tools and training required to assist subscribers?  Will billing issues and technical issues be handled by different employees or by the same employees?

Ongoing Product Maintenance. How do you stay abreast of new features, services and apps that may benefit your subscribers?  How and when do you introduce updates to subscribers?