May 2001

BY MARC ROBINS

The whole spin worked because it was borne out of sheer high-tech industry common sense -- and just a tad of sheer economic necessity: Technology for technology's sake can only take you so far, before you start to slide back down the slippery slope. At some point, commercially viable applications and solutions must be developed before actual customers and real revenues can start to materialize.

Unfortunately, having a great application only fills the glass halfway, and many companies tried to fill the glass to the top by finding a shortcut to the marketplace. When the stock market and capital markets were rosy in the cheek, the inherent weaknesses of these shortcuts were masked by the "green-out effect" of money falling from the sky. Back in the salad days of yore, partnering with your application in tow at an industry trade show was mistaken for "customering" -- companies went on a yearlong partner-signing, press release writing spree without any handle on the actual capability of their newfound partners to execute on their business plans (assuming they had one) and generate real business. Many of these companies that went down this path came up empty as their partners failed to deliver a single order.

Other companies that have positioned themselves in the service provider/carrier space also fell into the black hole known as "The Lab Trial." In this scenario, a carrier lures the equipment vendor to send them a number of systems at no charge so the carrier can run them through their paces, all the while dangling the carrot of a potential order for full network deployment in front of starry-eyed sales managers. At many of these companies, this hypnotized everyone from the CEO on down. Now, with every carrier and service provider announcing retrenchments in their bold network expansion and upgrade initiatives, the trance has been broken and many IP telephony companies are getting the first real wakeup call in their relatively young lives.

All of this is a roundabout way of saying that while applications are nice, and even essential, it's the really the customer that ultimately counts, and that's why I am proclaiming that this year is to be known hereon in as "The Year of the Customer." The Internet telephony companies that will survive this economic downturn and the various vagaries of the marketplace are the ones that have developed the tactics and strategies to attract, win, and retain real customers. Here's a short checklist of some strategies that might help get the ball rolling:

Forge a Tight and Balanced Alliance Between Engineering, Sales, and Marketing Teams. It should sound alarms if the engineering department dominates your company's new "customer-focused" marketing and sales strategy. Not that engineers aren't capable of adopting a "customer-facing" attitude -- it's just that it's simply not their stock-in-trade. For example, it's one thing to produce a spec sheet, and quite another to produce a compelling customer success story.

Put Customer Service and Support First. If you are selling IP telephony services, whether it be simple resale, or local/long-distance bypass alternatives, there is an incredible opportunity for you to beat the traditional carriers by playing a completely different game, and one they have no clue about -- it's called "Providing Genuine Customer Service." Imagine what would happen if you proactively contacted all your existing customers about a rate change that would save them money. Or you promised to do this to convince new customers to sign up.

Forget Trying to Be All Things to All Customers. This is a losing proposition. Focus on what you do best, and then over-deliver.

Focus Your Marketing Efforts on the Things That Count. In this economic climate, customers are most interested in solutions that will 1.) Save them money; 2.) Make them money; 3.) Make them more productive so they can do more of 1. and 2.

Think Three Times Before Irrationally Cutting Your Marketing Budgets. History has proven that companies that maintain or increase their marketing and promotional investments in periods of economic downturn increase their sales and share of market, both during and after the downturn. 

Marc Robins is vice president of publications at TMC and associate group publisher for INTERNET TELEPHONY magazine. Marc has been covering the communications industry since 1980, and his column takes a look at some of the more interesting trends vying for attention in our industry. Please contact Marc with comments at mrobins@tmcnet.com.

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