MARKETWATCH
EXIT MATTERS...
www.comms-dealer.com
BROADBAND
update:
By Nigel Cook, CEO of Evolution Capital
The General Election confirmed the
truth of Wodehouse’s view that it isn’t hard to tell the difference between a ray of sunshine and a Scotsman with a grievance. From the coalition that has resulted, it’s possible to draw parallels with some corporate mergers, and by that I emphasise mergers rather than acquisitions.
In cases like this it’s almost certain that underneath the bonhomie there will be a few sore losers. In business, you can fire them. In government, the trick is marginalise them. Both sides in business or government must be able to adapt to cultural shifts, to test new ideas or assume new responsibilities, and compromise without feeling that they are abandoning their principles. Each has to accept that if strains are to be avoided in the not too distant future, they must grit their teeth and co-operate fully in the early stages.
That co-operation almost invariably centres on cutting costs and improving efficiency. If it’s not done quickly it may not be done at all because an unsustainable overhead is the perfect breeding ground for rancorous disputes. In a merger, just as in a coalition government, there is always a senior partner and in business just as in the aftermath of an election, it pays to get the bad stuff out of the way quickly.
In a publicly quoted company directors often behave as though it is their personal property. It isn’t. It belongs to the shareholders. In government, the shareholders are the voters and they tend to have more clout than private investors.
In the USA, the democratic party politician Dick Tuck was noted for practical jokes and managed to infuriate Richard Nixon with some hoaxes that our spin doctors would envy. But he is particularly remembered for the 1966 California State Senate election in which he polled around 10 per cent of the vote. On hearing the result he solemnly commented, ‘The people have spoken, the b*!**!ds’. I wonder if, behind the smiles, Dave and Nick agree.
Most businesses now have an Internet connection and telcos are trying to steal market share by selling broadband at, or below, cost, says Andrew Dickinson, Sales & Marketing Director Griffin at Internet. He offers some pointers on how resellers can compete.
riffin has around 500 voice and data resellers as partners and we regularly consult with them on the challenges they face and the products and propositions they want us to bring forward. One area some of our resellers are concerned about is churn, and yet for our more successful partners churn is going down. So what are they doing differently?
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1. Bundle: In the same way as selling calls and lines as a package reduces churn you can add products to your portfolio that make broadband stickier too. Apart from obvious things like anti-virus/spam filtering, one of the most effective we have found is online backup. Choose a product that is easier for the end user to buy, use and manage and you are onto a winner. Some ISPs that supply white label online backup will ignore backup data transfer as part of any usage allowance or Fair Usage Policy. This means that the end user does not have to worry about their broadband bill suddenly increasing when they start backing up their PCs and servers to a secure remote site.
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2. Think about the selling process: Broadband
add-ons are typically high margin, low absolute value (eg, you buy at £4 per month and sell at £9.99) so there is no point bundling them if the cost of converting each customer negates the first year’s margin. The most effective tactic is to ‘give-away’ the product for the first 1-3 months and leave it for the end customer to opt-out before the product automatically starts to bill. Have your website professionally designed to make it easy for customers to upgrade and think about investing
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58 COMMS DEALER JUNE 2010
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Andrew Dickinson
in a CRM system that automatically targets customers with emails for new products and offers to encourage them to upgrade.
3. Focus on customer service: This is one area
where most of the telcos fall down. Their call centres are often off-shore and used for residential customers and business. End customers can sometimes wait 30 minutes to an hour to get through to someone whose only real advice is to re-boot their router. If you only have a small base of broadband lines you might consider using an ISP that offers white label first line support. That will allow you to take back the inbound number and support email address when you have the critical mass or expertise to do it yourself.
4. Sell the future: Many of the bundled all-in-one offerings from telecom companies share the same network as millions of residential users, and while adequate for email and casual browsing are totally unsuitable for hosted products like voice and desktop applications. What’s more, with some of them moving back to a more suitable product may incur considerable cost and down time. In the very near future the IP link into a business will carry all their voice traffic and be used to remotely deliver word processing and spreadsheet applications. Saving a few pounds on broadband now may cost them dearly in the future.
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