Focus on the pain not the price

Last year I was sitting in Cape Town airport waiting for an aircraft that was late to land [due to rotational reasons - I believe that’s a euphemism for sorry we are late again] and take me home. My mind was mulling over a question I had been asking myself again and again.

Why do we struggle to get our message across to our clients?

Some background at this stage; the company I work for manages telecoms costs for businesses that spend anything from R100 000 to R12 million per month. In essence we measure, manage, optimise and report on telecoms infrastructure and its associated costs. Our offering typically costs a company less than 3% of what it spends every month on phone calls and for the most part, we reduce these monthly costs by an additional 15 to 25%. I am the sales guy responsible for bringing in the budget every year.

So there I am wondering what I can do differently. What can I tell my clients that would speed up my sales cycle? Why are they not hearing me? Surely it’s not that difficult?

Let’s go back to the facts, I think aloud. We offer a good service at the right price! We have a good track record. Oh, except for that one incident [sigh] where we spent a small fortune fixing a mistake we made and got the boot anyway.

Businesses have a very definite need for telecoms cost management right now. Telecoms costs in South Africa have been exorbitant for years. And the government has no interest in doing anything about it. Too many vested interests are at play for politicians to care what happens to businesses and the people they employ because of prohibitive telecoms costs. Lack of leadership is the latest excuse being offered to explain the debacle.

Telecoms costs are so far down our list of social problems that we can’t expect any good news in the short term. Those cell phones you cannot do without will carry on costing you money, but your employees need them. Telkom will continue to put its prices up, and if Telkom is sold to new owners who have to pay back their funders it is not going to get any better.

So where was I? Oh yes. What can I do differently? In a perfect world, one would rather spend less time selling and more time delivering services. My logic is that the quicker I deliver, the more we invoice and the less time I would need to spend in this airport. More time in the bush, a better social life and financial security, surely this is the way to go?

I have been managing telecoms costs more efficiently for various companies for nine years. And I consider myself very good at what I do. Many of these companies are still our customers. Our business is successful, our clients are happy and we have built up a steady reputation as the guys who deliver the goods. So clearly it’s not what we do, it’s how we explain it to potential new clients that is the problem.

Our company DataRoom has spent the last nine years perfecting its value proposition and the delivery of solutions to clients. We have many success stories to talk about. We have a slick presentation. We have the testimonials. We even really understand the business needs. We do our job better and cheaper than most companies out there. Yet sometimes it still takes months for new clients to make up their minds. That’s frustrating.

So why is it hard to sell managed telecoms services to businesses?

Our customers have been listening to their service providers telling them for years that their solutions and products are going to save them money. All they need to do is give them the business and they will look after your telecoms. This endless sales pitch has clouded the real problem, and customers have bought into it. Never mind that telecoms in SA are so complicated and so mired down in inter-connect rates that the chances of making a cheap call are about as strong as unemployment halving by 2015.

There is no political will to do anything about the high interconnect rates charged between networks, since they were designed to protect the incumbent fixed line operator that the government happens to have a share in. And interconnect rates and bandwidth costs are responsible for the high cost of calls in South Africa. How do you rent network capacity from the only provider and then compete with it? The government has created a very expensive telecoms environment and low telecoms costs in South Africa are not going to happen for quite some time.

Since we have some of the highest telecoms costs in the world, businesses need to learn how to manage those costs. So surely they need the help of experts?

But there’s a catch. Commission-based sales incentives for sales people, network incentives offered to service providers for every new connection, and the fact that a service provider only manages call made over one network, not on rival networks, leaves a lot of room for improvement in the management of telecoms.

Every telecoms sales person in South Africa is promising to deliver cost savings. Yet customers are sick of hearing about how much money they are going to save - they would far rather hear about how we can take away their pain and deliver the goods.

Negotiating some discounts is not a euphemism for managing telecoms. To do the job properly you have to get to understand a company’s requirements, and invest time and money in managing and monitoring those requirements into the future or the costs rise.

This is a difficult and time-consuming process. So if you do not have the toolset, the business intelligence and the knowledge, then negotiating discounts are just about all a procurement guy, IT manager or CEO can do. Never mind what that sales guy with the Porsche selling Premicell and VOIP solutions tells you. How do you think he got to afford the car?

You see it is not all our fault. Our customers play a role. They let the equivalent of the "local building supply store" design their dream house and supply the building materials. They get a house all right, just not the one they wanted. If you want a dream home you go to an architect. And if you don’t like what he or she shows you, you go the next architect until you do like it. But you need to recognise that you do not like it. Or that you could do better. But without an architect you are unlikely to find out.

So why, when it comes to understanding one of the world’s most complicated telecoms environments, and when they need a world-class telecoms infrastructure, do our customers go the “local building supply store” for their designs? And more importantly how can I get them to see that they need an expert to manage their requirements?

Why do companies in South Africa rely on their service providers to tell them what to do? Having the fox watching the henhouse has never worked well for Farmer Brown and it will not work for your business.

Needless to say I did not get the answer that afternoon in Cape Town. But the answer has crystallised over a period of time through lots of debate and discussion. We had a sales conference in Johannesburg in September, where we threw out the agenda and decided to reinvent ourselves. We decided we had to present ourselves for what we were. After all, we are a business that understands telecoms better than any of our competitors. Even better than our customers understand their own business needs. We decided to show our customers we had a plan.

So what should our customers really be looking for when it comes to making telecoms decisions? How do you manage those cell phone costs? How do you ensure your mobile employees have connectivity on the road without killing your cash flow? Which PBX and which service provider will do your communications platform proud?

Customers want to know that their supplier has the knowledge and strategy to know what they are talking about and they want to see a plan. Customers want a partner that understands telecoms better than anyone else. They want a partner that invests in getting to understand their business and their business needs better than anyone else. A company that puts together a documented plan and sticks to it until circumstances change.

That supplier needs an independent insight into how to do things better and a sustainable solution that delivers real management benefits cost effectively.

To manage your communication costs properly, you need more than a discount from your service provider. You need not sign long-term deals with a fixed line operator and cell phone provider to gain what you rightly deserve. But you do need an expert to help you understand what to do, where to start and how to implement the changes.

And your expert must manage everything; fixed line, least cost routing, cell phones, 3G cards, VOIP and infrastructure. So here is my advice to the businessman or businesswoman who wants to know where to start or just needs to know they are on the right track. If you are looking to manage your monthly telecoms costs, make sure the people you hire are experts who have a plan for where to start and what to start with, and most importantly make sure they are 100% supplier independent.

Peter Walsh
www.dataroom.co.za
Saturday, June 07, 2008