ITEXPO begins in:   New Coverage :  Asterisk  |  Fax Software  |  SIP Phones  |  Small Cells
April 2007
Volume 10 / Number 4
Special Focus

The Key Attributes for Reseller Success with VoIP

By Kent Hellebust, Special Focus

VoIP is the hottest, fastest growing service in telecommunications today. Recent research by the Savatar Group shows that over 40% of American businesses are evaluating VoIP for either immediate or future implementation. Services with this kind of market awareness make understandably attractive additions to telecom sales portfolios. However, providing a complete, robust business phone service is no small task; carriers are spending millions to invest in the basic equipment needed to provide service, to say nothing of the years required to create the network needed to deliver the service. As a result, many service providers looking to capture a slice of this burgeoning market are choosing to sell VoIP service through a reseller or agent relationship.

When it comes to purchasing phone service, businesses tend to look at three key criteria: lower prices, an uncomplicated integration process and features they can use to enhance their communications. This is a large part of VoIP’s appeal: customers can’t help but be receptive to the idea of a model that provides cost savings and superior communications management features without any significant investment or change to their existing infrastructure. Resellers must offer services that meet (and exceed) these customer expectations, and doing so starts with choosing the right service provider.

The expansion of the marketplace gives value-added resellers (VARs) a larger number of providers to choose from, but the criteria for selecting a provider has also become more stringent. In the past, selling VoIP was often difficult, complex and time consuming, due in large part to the piecemeal service packages offered by the host company. These outdated packages often restricted the sales channel, making it too difficult to approach smaller companies by making selling to those companies largely unprofitable. To avoid this potentially limiting relationship, resellers should seek out providers that offer complete packages, ones including local, long distance, and toll-free networks, applications, online administration options, and marketing and billing support. These hosted package deals not only address end user concerns involving easy transition, they create such good economics that smaller companies return enough margin and revenue to make them worth pursuing, giving resellers an expanded market reach.

VoIP providers should also be assessed for their industry experience and telecom knowledge. Prime candidates should be able to provide examples of their expertise and support structure. Resellers should look for companies with a proven history of successful customer installs and a list of dedicated clients (preferably ones willing to offer testimonials in regards to ease of integration and customer service).

Ready To Resell
Once a reseller has successfully chosen a provider, it’s time to take their service to the marketplace. The first thing every customer will want to know is, “How is this going to save me money?” According to Yankee Group (News - Alert) and AMI-Partners, the cost conscious SMB market consists of over 7.6 million individual businesses, each spending an annual average of $7,800 in telecommunications. This customer group will be glad to listen to suggestions on how to lower existing business phone costs. Resellers that do nothing more than showcase how little work is required to experience a cost savings (simply replacing a POTS line with hosted VoIP service can save most businesses up to 50% off of their current phone bills) will find a steady influx of customers.

But since everyone in the market can offer substantially lower prices than their counterparts in the traditional phone service world, resellers looking to maximize their investment in VoIP need to stress its other benefits when presenting it to interested clients. Successful agents and resellers will take a proactive approach, explaining to clients that they’ve not only saved money by switching service, they’ve gained access to a whole catalog of new call management abilities, such as virtual fax, voicemail, and auto attendant. They’ve enhanced their existing service without having to change it or invest in it in any way. When the complexity of VoIP engineering jargon is replaced with a simple presentation of real world applications, SMB customers are able to clearly see all the advantages VoIP has to offer.

Through his work with resellers and agents, David Archer, Vice President of Sales for AccessLine Communications, is confident that the SMB market has terrific potential, given the proper approach. “The savings and benefits are undeniable, and as long as resellers can present the facts to customers in the clearest possible way, they should have no trouble closing sales,” he explained.

“Customers are primarily looking for two things: lower costs and ease of integration. Feature selection is also important, but resellers shouldn’t lead with it. It’s better to start by presenting customers with an easy, apples-to-apples cost analysis of what they are paying now, and what they will pay if they switch to a hosted VoIP service. Making it easy for customers to see what they’ll save in local, long distance, and international rates alone will help hook them.”

He went on to say that, after savings, customers are concerned with the ease of implementation. “No matter how much they may save, they will hesitate if they think their day-to-day operations will be impacted,” he said. “It’s important for resellers to emphasize that hosted VoIP can be implemented without requiring changes to their existing infrastructures.”

“It’s important not to get hung up on trumpeting feature packages in the beginning of the sales process, but there’s definitely a place for this discussion after savings and implementation have been addressed. Again, simplicity is the key. Rather than attack the customer with techno-jargon and telecom acronyms, emphasize the practical, day-to-day business benefits of VoIP service: how it expands mobility, how it helps connect a business to its customers, how it replaces bothersome call management tasks with easy, online administration tools.”

Uncovering, targeting (and eventually dominating) “niche” markets is also very beneficial to ongoing reseller success. Creative resellers who examine industry trends and look for unique positioning opportunities can uncover a wealth of untapped sales potential. For example, look at the significant and underserved segment that’s been created by the advent of the converged offer, those “allin- one” bundling deals that residential phone subscribers are now being inundated with. Traditionally one of the biggest stumbling blocks of successful business VoIP integration, due to the troublesome QoS issues and unwanted strain on office LANs caused by mixing voice and data, these bundled solutions have actually created a renewed need for an “unbundled” option, one that keeps voice and data channels completely separate. Resellers that seek out businesses in this segment can target any business that wants to save money on its voice service, not just those who happen to be looking to replace both of its phone and data providers. Uncovering these kinds of exclusive customer segments can account for thousands of dollars in new business for resellers.

Rethinking The Road To Reselling
The explosion of VoIP’s sales potential has also created several new reselling models to choose from, including licensed agent programs (such as interconnects) and reselling through established retail chains. These methods differ from a wholesale reseller option in that they utilize a co-branded partnership format that stresses both the sales drive of the reseller, and the service strength of the provider.

Success in reselling VoIP in the interconnect channel is viable for two major reasons. First, a hosted VoIP solution easily helps defray customer concerns regarding investment costs, particularly since many customers either don’t have or don’t want to part with thousands of dollars for a new key system. The second reason addresses the needs of those who are interested in investing in a new key system, but can’t get approved for financing. Many interconnects are currently forced to turn significant amounts of SMB business away for these very reasons; having a hosted VoIP solution with a virtual PBX (News - Alert) to offer their clients will help them overcome both of these objections.

The potential of retail channel reselling also looks promising. Just like with any other product, retailers take hosted VoIP business phone service and offer it to their customers under a recognized brand built on customer loyalty. It’s a method that’s beginning to gain traction, and there’s no limit to the amount of success it can achieve.

With the VoIP market only continuing to grow, resellers who choose the right service provider, establish the correct sales approach, and determine the sales model that best fits their business styles will find a receptive customer base ready and willing to invest in this rapidly developing technology.

Kent Hellebust is CMO of AccessLine Communications, a hosted VoIP service provider specializing in the business market. For more information on programs for agents or resellers, visit AccessLine at or call 800-914-0777.


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