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.

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.

So, You Want to Get Into the Data Center Business?

Data Center

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.

Cloud computing, business disaster recovery and continuity, off-site data storage, co-location, managed services, mirror site operations, data warehousing ….. what does it all mean, and, more importantly, how can you get some of this business?

On the surface, data centers are closely related to telco operations – high capital costs, spiky investment, technology driven, and (hopefully) good long-term investments.  Furthermore, telephone companies are natural partners (or owners) of data center operations due to the requirement for robust (and redundant) bandwidth connectivity (preferably fiber based).  Site security is also a critical factor; something telcos are well acquainted with and can naturally support.  However, given the fast-moving nature of both businesses (telecommunications and data centers), there are several key aspects that must be considered.

Location, Location, Location

As with real estate, one of the most critical factors when considering whether or not to invest in or build a data center is location.  In addition to other issues, location impacts costs (e.g., power costs – which are one of the primary cost elements), vulnerability to natural and man-made disasters, access to qualified technical personnel and your sales opportunities.  Some of the key location-based factors include, but are not limited to:

  • Cost and availability of real estate – is there sufficient open space for expansion
  • “Green” attributes – availability of green power and other low sulfur emission power sources
  • Cheap and abundant power from multiple sources
  • Climate – e.g., climate can affect HVAC cooling costs and design
  • Available education resources – colleges, universities and technical training
  • Access to redundant sources of broadband facilities – especially fiber optics
  • Local/State income tax rates – including any ‘incentives’ available for tech-based companies

Locating a data center near or in conjunction with a telephone company can be advantageous from the perspective of securing an anchor client (telcos house and store a lot of data), proximity to superior broadband connectivity, and access to technical expertise (e.g., it is not too far of a leap for telco IP technicians to be trained to be able to handle many of the technical needs of a data center).

Access to sufficiently trained technical personnel is very important.  While telco technicians have many of the same skill sets necessary to meet the needs of data center operations, it is likely that you will need more highly trained and certified employees than are necessary for traditional telco operations.  Therefore, locating close to colleges, universities and technical training centers, while not a requirement, can be a great advantage.  That said, I am personally aware of several data center operations that are several hundred miles from such educational facilities.  These operations were able to attract very qualified people due to their unique location – e.g., sometimes people would prefer to NOT live in the big city!

Not being located in the ‘big city’ is also positive from the perspective of site vulnerability.  Assuming you have sufficient broadband and power availability (again, redundant feeds, if possible), then locating in rural areas is very attractive for companies wishing to house their data in secure locations with very low risk profiles from both man-made (e.g., terrorism) and natural (e.g., hurricanes) disasters.  Coincidentally, most rural telcos are NOT in high risk areas; particularly with respect to terrorism and other man-made disasters.

The cost of power is also very location dependent.  In many rural states (e.g., Wyoming, where I reside), the cost of power is below the national average (often way below).  For example, the cost of power in Wyoming is consistently below $0.04 / Kwh (again, depending upon the exact location), which is less than half the national average of over $0.11 / Kwh.  Furthermore, availability of power is a location-based factor – is your location subject to issues such as rolling brownouts, which are common in some of our country’s more populated locations?

Know Your Business; Know Your Market

Like many technology-based businesses, the data center business is rapidly evolving.  What might have been a great business model a year ago, may have no legs today.  Rates, services, packages, bundles and even target customers are changing daily.  However, there is no doubt that in one form or another data storage, remote site availability, business disaster recovery and ‘cloud computing’ (the meaning of which is also evolving daily) will be viable products for years to come.  The key is to know where to start and how to focus effectively to meet your customers’ needs for many years to come.  It’s not necessarily ‘rocket science’ but it’s also not child’s play.  As such, we are prepared to assist with the evaluation of these and many other similar opportunities and, if it looks positive, help you launch or expand existing data center operations.