On Rad�s Radar

The Replacements

By Peter Radizeski, RAD-INFO Inc.  |  June 04, 2012

This article originally appeared in the June 2012 issue of INTERNET TELEPHONY

The channel basically sells replacement services. Here are some examples: VoIP for POTS: SIP trunk for PRI; cable modem for DSL; Ethernet for T1; and T1 for T1. It’s always about replacing like for like.

That is why selling hosted PBX (News - Alert) and other cloud services are so challenging: It is not a simple replacement. It’s not like for like. The sales process for selling replacement services is pretty easy. When the sale becomes about business process change or fork-lift upgrades (like hosted UC or virtual desktop), the sales skills are different. Intelligent questions, actively listening, excellent follow up, creativity, product knowledge, and more now come into play for the agent or sales professional. This means that the sales cycle will be longer (likely, so will provisioning, which means commission payments are much later). To some agents and sales reps the sale will be harder – and less satisfying, not just due to the smaller commissions that take longer to arrive, but transactional sales types are motivated and driven by quick hits and a lot of ink in a month. Extended sales cycles are less motivating to this type of sales person.

In addition, commissions are already sliding due to declining revenue. With the prevailing sales pitch being “I will save you money” for more than 10 years, revenue is going to steadily decline. As revenue declines, so do agent commissions (which are based on monthly billing). As commissions decline, agents have to sell more and more to maintain their revenue goals. Shifting to new products, new sales skills, and a different sales approach will be a leap, especially without training, a financial cushion, a deep desire for change, and vendor support.

Conferencing and e-fax are not quite a simple replacement. In an evolution from POTS/DSL/T1, these two products would be the next step, a step that many agents have not taken yet. This also begs the question that I hear from providers: Why isn’t there more cross-sell and upsell to an agent’s customer base?

This makes me wonder who will be the agent of tomorrow, who will be grooming accounts and consultatively selling complex solutions to their customers?

Edited by Brooke Neuman