Service Providers Doing a Poor Job of Selling VoIP to SMBs
By TED GLANZER
TMCnet Communications and Broadband Columnist
It is no secret that Voice-over-IP service providers have not tapped the enormous potential of the small- and medium-sized business market.
What appears to be a secret is the reason why.
Indeed, according to a study by technology consulting firm Savatar, service providers have done a poor job in marketing and selling VoIP to the 1.8 million or so SMBs in the United States, focusing too much on features rather than the service's reliability, lower cost and ease of administration.
"Why no one has figured it out is shocking," John Macario, Savatar CEO and study co-author, told TMCnet in a telephone interview.
The study, in which 300 SMB decision makers were surveyed, revealed that the SMB market is ready to migrate to IP telephony; that market, however, is poorly educated with regard to VoIP service.
While 75 percent of the SMBs surveyed are generally or somewhat familiar with VoIP, a whopping 25 percent are "unfamiliar" with VoIP and its advantages.
Another major problem is that SMBs are all over the map with regard to identifying who is a VoIP provider.
Indeed, the survey data reveal that 25 percent of the respondents said that nontraditional telecoms are VoIP providers; telecom equipment providers, 17 percent; and ISPs, 10 percent.
The general confusion is highlighted by the following: 13 percent of the respondents viewed cable companies as VoIP providers, even though they are not major players in the SMB market as of yet.
In what can only spell bad news for the Verizons and SBCs of the world, just 14 percent of the respondents said that traditional telecoms are VoIP providers, just one percentage point above the 13 percent who responded that they were not sure who offered VoIP.
"[SMBs] don't know who to turn to," Macario said. "It is a marketing and selling failure."
Service providers, according to the study, aren't doing themselves any favors by having sales forces that are not educated on their VoIP offerings and by having Web sites that do not highlight their VoIP services.
Also, Macario told TMCnet that if someone is interested in obtaining VoIP service, "It's incredibly difficult to find a person to talk to."
The end result is that providers who understand the market have a unique opportunity to cash in on the chaos.
"The traditional telcos don't understand what it takes to sell this stuff," Richard Grange, CEO of study co-sponsor New Global Telecom, told TMCnet in a telephone interview. "It takes a new approach."
The telcos do not have effective channels to sell to market, Grange said. Instead of direct sales forces or telemarketing campaigns, telecoms should be using effective channel partners, such as NGT, to deliver the product, Grange said.
NGT has over 45 service provider customers and 39,000 end-user seats, 75 percent of which are business seats.
"Better training and understanding the portfolio is really what's needed," Grange told TMCnet. "We've spent a lot of time working on the delivery process."
And while features such as click to dial and remote capability are not important to SMBs initially, they become an important issue downstream, Macario said.
"Those features become very sticky," Grange said. "People love that stuff."
Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:
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