UC Price Wars – What Can You Do?
By: Peter Radizeski
There are more than 2,000 providers in the U.S. offering some version of hosted PBX or unified communications. Of those, 400-plus are on a Broadsoft platform.
More than 700 are on a Metaswitch softswitch. Almost 200 are running Netsapiens. There are numerous on versions of Asterisk, Freeswitch and other proprietary systems (Fuze, Broadview, 8×8, RC, Dialpad to name but a couple). There are another hundred offering one Cisco platform or another (HCS, Spark). Coredial is just one white label UC provider, which has more than 500 customers. Add in 70 million users of Office365 with Skype4B, 3 million daily users of Slack and all the other collaboration space, and you can see how crowded the space is.
Sales are hard to come by. This isn’t a product with a true pain point. It isn’t a replacement service. The worst way to sell UC is as a key system replacement, but that’s what people do. It’s why there is churn and a slew of unhappy customers.
At its core unified communications is about change. For the business to get more efficient and productive, it has to alter how it does business. Problem: no one likes change. We aren’t selling it as change. Hence, the disconnect and the hang up on sales.
Almost half of UC sales are now without phones – softphones or mobile apps only. Yet the industry, after more than a dozen years, has not penetrated more than 30 percent of the market. In fact, premises-based PBX sales still eclipse cloud sales. In 2020, it is expected to cross-over.
What’s a channel manager to do? It’s a challenge. You want to hit your UC quota; your company doesn’t want to drop the price or match the spiffs. Here are three tacks channel managers can take.
One, be specific about where in the market your product fits. Product market fit is a key ingredient for sales success. The market is at least seven segments (maybe eight). Repeat over and over where your sweet spot is. Partners tend to self-select where you fit if you don’t tell them.
Two, follow this repeated message with signs of success. By that I mean, let them know you are closing deals. Every time you close a deal inside your sweet spot (or higher) email your partners with a quick note. What type of business bought the platform? How many seats? Why did they buy? It breeds competition. People want to work with winners. They want some of that good joojoo to rub off on them.
You can add on to this by getting a quote or testimonial from the partner – or record one as an audio file (mp3) or a video (on your smartphone). This is called “proof.” Proof builds trust. Trust is the foundation on which sales are made. Build a library of trust.
Three, you are going to get price pressure (just like you do in bandwidth) on seat pricing. Remember to explain the value. The value may be in post-ink. By that I mean, after they sign the deal is where the real work begins. The deployment process, the training, the details are what make or break the implementation. Discuss those success stories when you can.
Remember that you aren’t going to win every deal. Some partners will sell your service despite it costing more because of the post-sales service or the relationship they have with you. There will be partners that only sell on price. Identify them – and explain that you have a price floor. It makes it easier to do quoting when you admit this.
Remember though, we are still in the early days. There is still 70 percent of the market to capture.
[Peter Radizeski, president of RADINFO INC, started as a VAR, then became an agent. Now he writes about the channel and the telecom space while consulting to service providers and occasionally still selling some circuits.]
About ChannelVision Magazine:
ChannelVision is a bi-monthly digital and print magazine, read by channel partners selling all manner of voice, data, access, managed and business services (both on premise and “in the cloud”), as well as, technology, gear, and equipment. ChannelVision is a highly focused and efficient way for service providers, hardware, and software companies to reach experienced channel partners targeting the small/medium business space. Serving a controlled circulation of providers and indirect distributors of communications, network, IT and cloud-based business services, ChannelVision is telecom’s gateway perspective on how to adapt, what to sell, and how to sell it.