Peter Radizeski is Founder and President of RAD-INFO INC. He is an accomplished blogalyst, speaker, author and consultant. He has helped many service providers with sales training, marketing, channel development and business strategy. He is a trusted source of knowledge about the telecom sector. His honest and direct approach make him a refreshing speaker.

Look for his innovative ideas and analysis of current technology on his blogs.

Meet him at one of the many conferences he attends and speaks at.

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Selling Through a TSB or Getting Attention

One thing I get asked a lot by channel managers is How to Sell through a TSB (brokerage formerly known as Master Agency). Basically, how do I get the Attention of Partners.

As a partner, I get too many emails from too many vendors – and most of it nonsense meaning it is all about the vendor.  None of it about my business or my customers.

Here’s a few ways to improve your results:

  1. Explain concisely who your Customer is and in what way they benefit from your services.
  2. Do not send me a list of services!
  3. Tell me a Story.
  4. Summarize a use case.
  5. Tell me what your company does exceedingly well and for whom.

The largest issue that vendors have is that they cannot answer any of these questions.

They do NOT know who their customer is. They say: Everybody which is marketing-speak for We Don’t Know.

If you have happy customers, what are they saying? Why did they buy? Who was the Buyer?

If you have satisfied Partners, why did they sell your services?

I understand that you paid money to the TSB who gave you a list of emails and that spamming that list sounds like a productive day at the office. I can tell you that is the worst idea you ever had.

This is 2024. Time to try something else.

A majority of the partners are busy. Every sale, every renewal is for a less dollar value. We are running faster and faster to maintain our business. So to take time out to have a chat about your business is a waste of our time. If you want to chat about your business, start a podcast. What ever happened to the Elevator Pitch? Quite literally telling me:

Most of the channel managers in our industry are on their 6th or 7th vendor. They do not have 15 years of experience. They have experienced their first two years of channel sales 7.5 times. That means that they aren’t growing, learning. I understand that Quota is a heavy burden, but the rolodex is burned out. It’s time to flip the script because doing the same thing you did pre-pandemic is not going to work anymore.

I have spent many hours explaining channel strategy and marketing to vendors.

The two best concepts are Aligned and Enrolled.

At CVX Expo in Scottsdale on Mov. 14th, I will be holding a session on Channel Management.

Or you can hire me to help your strategy or marketing or to train your Channel Managers.

Or buy the book!

Mitel Move to Zoom

November 2021:  “RingCentral will pay Mitel $650 million to acquire intellectual property rights and patents covering network and call management, security, and infrastructure. Demonstrating its commitment and excitement about the partnership, Mitel’s existing investor group led by affiliates of Searchlight will invest $200 million in equity in RingCentral as part of the transaction.”

Now did RNG get $900M worth of ARR from that deal? No. How many of Mitel’s 35M users went to RNG? No idea.

Now Mitel has a deal like Avaya has with Zoom.

Here’s the funny thing, NEC launched their version of this in 2021. It is called NEC Bridge and works by connecting NEC PBX customers to cloud functions and mobility. It seems funny that everyone is making a big deal out of Avaya and Mitel doing what NEC did 3 years ago. Well, a lot of pundits and analysts had their foundational work with one or both of those companies, so everything Avaya or Mitel do is amaz-balls! Except it isn’t.  If it was would Avaya have gone bankrupt 3x?

The bottom line is that complex on-premise PBX systems are not going to cloud any time soon. AI, mobility and other functions in cloud communications are wanted by companies and a Bridge product provides that.

AppDirect Makes a Marketplace Move

AppDirect’s MSP event is going on this week in Chicago (Avant’s backyard). AppD said 22% of its base of 10,000 technology advisors are transacting more than $1 million a year in end user billings. (I want to call BS on the 10K but why bother).

Yet $1M in annual billing is simply $83K per month. On average that comes to about $10K per month in commissions – or less if it is all SaaS sales. So 22% make about $100K per year. That means that 78% make way less than $100K per year!!!!  Not even a quarter of their ten thousand make $100,000. You can extrapolate that 22% make less than $1500 per year (the minimum check is $100 per month).

If a majority of those ten thousand are MSPs, then that AppD commission check is just a bonus on top of the UP TO $5M per year in revenue that 90% of US MSPs make. Now the Trusted Advisors without an MSP or VAR business better have another hustle!

A little more interesting is that AppD integrated into TD & Ingram.

“The marketplace company introduced integrations on its platform that give resellers the option to source technology SKUs from distributors Ingram Micro and TD Synnex.” No idea what this gets AppD, but I guess making it one pane of glass for VARs is nice.  I guess this is an extension of the “Marketplace” concept.

Even more interesting is that AppD will do the end customer invoicing for partners! This gets AppD closer to the customer. This also is in the hopes that a Trusted Advisor that is not an MSP now has access to a billing platform.

The goal of all the TSBs is to get closer to the customer because it makes their data more valuable to investors. It is also the first step in cutting the TA out altogether, especially if your marketplace is open to customers (like AppD is) and partners encourage customers to self-serve.

 

You Know or You Don’t

Recently Avant announced:

“First Orion has announced its partnership with AVANT Communications to expand the distribution of its branded calling solutions, giving AVANT’s extensive network of Trusted Advisor partners deeper access to First Orion’s industry-leading technologies.”

Avant signed up a branded calling vendor; there are at least four of those chasing the TAM (total addressable market) of about 30,000 Enterprise customers. The only people that care about Branded calling are companies that spend millions on branding – and that’s about 30K enterprises.

Here’s the funny part. The buyer is the CMO for Branded Calling. (I know because I had a discussion about this service with the TransNexus CEO, who sells BC.) TA’s doesn’t usually have a relationship with the CMO, so how would they be helpful selling this.

In addition, there are probably less than 200 TA’s that sell to the Enterprise segment of the market.

I know that TSBs say TA’s sell to Enterprise, but the history of the channel – and actual data – showcase that the SMB market is where 90% of the channel partners play.

Now, vendors come to me all the time about getting in the channel. I am foolish in that I don’t just take their money and say let’s give it a try. I usually start asking hard questions that they do not have answers to like”

Who your customer is? Who is the Buyer is?

Without knowing those 2 answers, your channel strategy is called Hope.

The channel is clogged with vendors who can’t answer these questions. Who have no idea what the Target Customer is or Why they should Buy from YOU.

Usually when I ask “Who is Your Customer?”. the answer is: Everyone. In which case, I know that they have no idea – and the answer will actually be: No One.

Most products are NOT Hershey chocolate or potato chips or cereal. Meaning they are NOT mass market, built for EVERYONE. Thinking that is a waste of time and money.

Most products are like Bourbon. Not everyone drinks alcohol. Not everyone drinks whiskey. Not every whiskey drinker drinks Bourbon. Some bourbon drinkers drink expensive stuff; many drink the cheaper stuff. Not all bourbon drinkers want barrel proof. Some like small batches. Do you get the picture now?

If I sell no-name cheap bourbon, I have to understand who that buyer is and what store caters to it.

The biggest problem vendors have is they aren’t honest with themselves.

They think they sell the fountain of youth when in reality they sell something that maybe 20,000 businesses will benefit from and pay them for it. Cbeyond sold at 55K businesses. Most service providers have less than that many active accounts. (USLEC used to say 26K and zero churn right up till PAETEC bought them.)

Knowing these things should change your channel strategy.

Full Circle

Starting in 2003, VoIP companies started offering the precursor to UCaaS – Hosted PBX. The providers were offering retail, wholesale, white-label, even switch partitions – literally anything for revenue on their million dollar switch investment.

Twenty-one years later, providers are offering a plethora of ways to get dial-tone: Operator Connect, Direct Routing, SIP Trunking, HPBX, UCaaS, UC+CC, CPaaS, and POTS replacement. Again anything for revenue in a market that has shrinking ARPU.

It didn’t work then; it probably won’t work now.

Leaning heavily into the transactional products – OC, DR, SIP, POTS-R – means more commodity play, but it is aimed at quick revenue. More importantly, it plays to the strength of the sales channels, who lean towards quick transactions.

Most partners don’t have the sales acumen and/or desire to sell a complex product, when a simple one will be effective short term. Even sales reps are motivated – nay, compensated – better for a complex deal, since most compensation plans are tied to either revenue or margin.

Most sales reps are not in a position to walk every Prospect through the various options. “Oh, Mr. Prospect, you have Teams? Okay, let’s discuss the ways we can add value to that.” More like, “Do you want dial-tone with that?”

It is back to the Integrated T1 battle days. What size bucket of SMS are you offering?

There is an opportunity to add functions like omni-channel and AI, but the outcomes aren’t in a simple story to be re-told. Truthfully, when you sell a UC+CC deal in January and it takes until May to be implemented and, as a partner, it is July and still waiting to get paid, the emphasis is on quick hits for compensation, simplicity and satisfaction.

The industry brought this on to themselves. Everyone wanted to sell potato chips. No one wanted to get out of the chip aisle into a vertical or niche. Providers have NO idea who their Target Customer is — who best benefits from your service offering? And now with 7 voice offerings, there should be 7 Targets.

Providers don’t have a valid Value Proposition. Why YOU over the other 2000 providers?

Some of you need to read the Weave Investor prezo then compare it to either 8×8 or RNG – vastly different. Weave has 31K profitable customers. They have a great bundle and you can’t find a single telecom acronym in their presentation!

Providers don’t understand that 5,000 satisfied and profitable customers in a region/vertical/ niche is better than trying to get 7,000 barely profitable ones, who churn at renewal because they were still stung by the delivery or lack of care.

This all starts with the lie called market size: a $58B market opportunity for all of the Cloud Business Communications [UC+CC+CPaaS], which 8×8 “realistically” shrinks to a “$10B Opportunity with our Target Customers [50-20,000 employee enterprises in our markets]”.  If you go to Wall Street saying it is a $10B market, how much do you think you can capture? And HOW is 50 employees an ENTERPRISE?

And in the same presentation that you talk about UC+CC, AI and more, the big slide next says: “390 million seats in orgs that have M365 but no Teams telephony solution.” Another monster of a market (actually a sub-set of that $58B except that $58B shrinks every year and includes high margin POTS, PRI and UCaaS seats at $29 that are being cheaply replaced!)

The providers are going to replace on-premise PBX seats that required a $300 phone with a $15 dial-tone bundle ($5 for MS license and $9.95 for Direct Routing).  No wonder the PBX partners can’t/won’t sell cloud comms!

If there are 390M seats waiting for dial-tone, why are providers spending on WFM/WFO, AI, etc.? If you are chasing Microsoft, how do you even think that Co-Pilot isn’t going to beat whatever GPT notion you have?

8×8, RNG and Dialpad have put out packages for verticals – for sales, healthcare, retail, hospitality – hedging every bet they can make, like they were AT&T and everyone has to buy from them.

How do you train a sales team with even 20% turnover on all of these products?

How do you cultivate stories on outcomes for all of these products?

How do you let customers know about the new functions available? How do you train them on it?

Cisco rolled out over 400 features to Webex since the pandemic. No one that sells Webex can name even 5. Lots of features that no one knows about or worse, no one uses, is the same as burning your R&D dollars.

I think it all swings back to dial-tone. The industry is focused on fiber broadband, which begets selling cheap, digital voice for residential and very small business. Hence, why the MVNO option for even regional cablecos. Since most everyone mentions that Microsoft is the giant in UCaaS, UCaaS will get less attention.