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VoIP Resellers Still Dealing With 1.0 Manufacturers

In a post yesterday, Andy Abramson took a critical look at the VoIP reseller landscape and how a perceived lack of buyers is a result of a lack of an evolution and innovation in the marketing of the solutions they represent. While I applaud Andy for shedding light on the current state of the VoIP reseller marketplace, I do not agree with everything he mentions, and feel that although many of his points/suggestions work from an ideological perspective, when it comes to the reality of being a VoIP reseller and growing a business in this marketplace, they just do not hold-up.

Let’s take look at what Andy has to say:

1. For the most part resellers are marketing one brand of solution instead of offering a range flower meadow for free. For example, CallTower only sells a Cisco powered solution. I like CallTower and I am favorably disposed towards Cisco CallManager but other solutions work well and CallTower could expand their market with additional options.

Most VoIP resellers are marketing one solution for one reason: Ease. Being technically proficient with multiple platforms is difficult and many times cost prohibitive from technical perspective. It is difficult enough to find affordable VoIP engineers right now, good luck trying to do that across multiple platforms. Anyone who has ever had to support multiple platforms will also know what a headache it can be alte klingeltöne kostenlos downloaden.

VoIP resellers want a system that is easy to sell, configure, install, support, offers healthy product margins, and the opportunity to sell additional services that compliment the offering. The brand names do this better than the up-and-coming company’s in this space and therefore resellers take the safe road and hitch their wagons to one company.

2. Most of what the resellers are selling is aimed at the 100+ PBX replacement market, missing the very needy and unde- served Small Business and SOHO market icloud iphone backup herunterladen. Fonality is kicking butt in this sector and other options are looming like client Telephony2 and their CallButler product aimed for the 15 seat and under market.

There is a reason everyone wants the 100+ space; that is where the money is. While I think solutions from companies like Fonality, SwitchVox, and Callbutler are outstanding, for a reseller it is difficult to be profitable because of the low price points these companies entered the market at. The reality is that the under 100 seat opportunity has just as long of a sales cycle, support requirements, and time investment that a 250 – 500 seat deployment has. If the average 25 – 50 seat deployment comes in around $8K to $16K retail with a margin of $2,400 to $4,800, you better hope that your company is closing at least one a day, everyday, unless of course, you are a 1-2 man shop.

3. Prospective buyers don’t know about trade shows like VON and Internet Telephony. If you don’t read their publications, visit their web sites or be a part of their world there’s lower awareness. These events need to get out of their insular world and market in publications like Business 2.0, Wired, Fast Company, Business Week and the Wall Street Journal, as well as run ads on those sites, plus GigaOm and TechCrunch.

Right on. Not only do they not know, they do not care. In addition, what 25 – 50 person company do you know of that is going to pay to send someone from their company to an event that is thousands of miles away? Not many. This a primary reason that VoIP Supply no longer participates at industry trade events.

4. The products still require too much of of a techie/geek to administer. This is one reason why cBeyond and Fonality are doing so, so well. Simplification, like options from CallButler and Junction Networks, is where the future lies.

Simple for who? The end customer or the reseller? The easier the vendor/manufacturer makes the product, the less of a need their is for a reseller. If the solution is easy enough for an end user to configure, install, and maintain, why would a reseller want to sell that? Many of the companies that Andy mentions are doing very well with direct sales, but how about their channel sales, through pure VoIP resellers?

6. Market differentiation–everyone is a VoIP Reseller. No one is a market specialist. As a result it becomes hard to find the right VoIP Reseller to talk with. Companies reselling VoIP need more market focused messaging to drive their service offerings and availability.

Very true, but I think this is the result of the fact that phone system vendors and service providers are all offering the SAME SOLUTIONS. It is tough for a VoIP reseller to differentiate and innovate if the company they represent if not. One of the ways VoIP Supply has differentiated from other VoIP resellers is that we sell more products from more manufacturers with more staff than any other VoIP reseller. Neither of those differentiations though are that sexy. Differentation needs to come from the manufacturer or service provider before you will see it out of their resellers.

7. Too much email and too much web. Sure Google ads are great for inbound lead generation, but too much about the service offerings and the communications is done by email. When I ran the Philadelphia Flyers offices in the 80’s one of my big projects was converting them from the Dimension 400 to the System 75. We spent hours with our AT&T reps, Bell of Pennsylvania/Bell Atlantic ops team and then a killer reseller for add ons. When the system was finally up and running it worked great from the start. The AT&T person figured out that the off-premise extensions were best served using the then new Merlin mini PBX that eliminated the need for Centrex interoperability. Bell of PA’s loss was our simplification. That type of “consultive” selling is what is lacking today with VoIP resellers.

The marketplace has changed since the 80’s as I bet that phone system cost ten times more than the equivalent today. Consultive selling is great, but in reality most under 100 seat companies are unwilling to pay for this sort of selling. For a reseller to rely on their product/maintenance margins and provide consultative services, is unrealistic because it just is not profitable. As price decrease, so do margins, and the amount of time a reseller can spend with a client. Sad, but true.

8. Not enough in the field. Too much off shore. Too many companies off shore their back off and lead processing. Of they expect the CRM solution to handle the “thinking.” Get out of your office and in front of your customers. Better yet, bring them to the events. PulverMedia and TMCnet will give exhibitors all the exhibition passes they can give away. The key is to get the bodies to the shows, and “engage” with the buyers, not just tell them what they missed over the web.

Feet on the street are expensive. Unless a VoIP trade show is in your home town, flying or driving a potential client to one, is expensive, or unrealistic. A better strategy would be to have monthly “VoIP seminars” where you can get in front of multiple companies at one time. During these lunchtime 1 – 2 hour segments, you can explain VoIP, the business benefits, your solution, and schedule time for “personalized” demonstrations to take place at a later date. This can only be done though, if the money is there to support it. Often times though, with margin decreasing daily, this just is not true. That is why resellers look to the web, offshore, and do not get out in front of the customer…it just costs too much.

The Truth About VoIP Resellers

The truth is being a VoIP reseller is not easy. VoIP manufacturers are very 1.0. Price points and margins are falling. Customer expectations and demand are the sames as they were when they were when they bought a $100K legacy system. This makes successfully and profitably applying much of Andy stated difficult, if not impossible.

Garrett Smith

Garrett Smith is an author, consultant, and marketer with almost 20 years of experience selling and marketing VoIP solutions. Garrett has helped thousands of businesses select the right VoIP system over his career, in addition to helping hundreds of vendors, and dozens of service providers with their go to market strategies. This experience gives him a unique position in industry that allows him to cut through all the noise. Garrett has been named one of the most influential people in the VoIP, and has written over 3,000 articles about VoIP since 2004.

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