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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Do You Have the Right Sales Rep?

During channel manager training, there is emphasis on alignment. When hiring sales reps, managers need to ensure alignment as well.

There are different types of sales reps: transactional, whale hunters, farmers, inside, field, BD and SDR. The reason that a job description is important is that it requires the manager to think about what they actually need and who they want to hire. Too often managers lazily Google search a job description and copy/paste. That doesn’t work.

Yesterday I received a call from a sales rep. He was sent my blog posts. He has been in his current position for 5 months with no success. That made me wonder: (a) what is his manager doing? and (b) what kind of management do they have over there?

He has to make 50 calls, send 50 emails and 3 handshakes per day. He thought that was far-fetched.

The disconnect is that for over 20 years he was working for a cellular company. Cellular can be sold to anyone. There isn’t a territory. And people change cell phone providers often as well. The market is dynamic.

Now after 20+ years as a transactional sales rep with short sales cycles and a large pool of prospects, he is working for a fiber ISP. Now the prospects are limited to where the fiber goes. This isn’t a transactional sales for Lit Buildings. It is a relationship business.

Connecting with property managers is a part of that sale.

After 30 minutes of giving him ideas from my sales trainings, he seemed dejected that I didn’t have a silver bullet. There isn’t a silver bullet in sales. It is about daily activity, relationship building, time management, and  learning about the customers and how they interact with the products.

I have coached a number of ISP sales teams. It is challenging when they are like Cogent: you can only sell in the Lit Buildings. But I wrote a whole book on the strategy and tactics around selling to LIT Buildings HERE.

A disconnect he is experiencing is that these are quick sales to anyone, but longer sales to a very specific prospect pool. And with little success in five months, he is frustrated. Come to the realization that this is a different kind of sale. A different buyer, sales process, and sales cycle and recalibrate for it – or look here.

The hiring manager didn’t do him any favors. You have to align skills and motivation with the position.

The manager should be coaching him up and helping him daily to get with the program.

There has kind of been a disservice to the company and the sales rep here, but nothing that a course correction can’t fix!

Why Buddy Can’t Sell

I have been thinking about this since I bought the book, Why Johnny Can’t Sell. After spending the last 5 years doing a lot of sales training, sales coaching and managing sales teams for ISPs and MSPs, I have some insights into why sales people struggle.

Quota is usually arbitrary. It is a function of the recouping of the sales rep’s salary. It isn’t often based on Average Sales Size and Median Sales Cycle. In other words, if the average sales size is $500 and Quota is $2000, the sales rep will need to close one deal every week. Yet if quota is $4K, that is 8 deals, 2 per week. If the rep can close 50%, that is 16 proposals per month – almost one per day. Most door knockers do not generate that many quotes.

Failing to hit a monthly or quarterly sales goals do not always have to do with activity, will, or skill, but with the people you’re calling on and following up with. Time Management is one of the most vital skills a sales rep can have. Time is Money. Use the time wisely. Spend time with prospects who will benefit most from your services.

If you’re following up with the wrong prospects, you’re not investing your time working with the right ones. And the only constant is time.

That there is Problem 1: Most service providers do not know who their target customer is. They don’t mine any data from their current and past customers to know who to target, so they go with everyone – or where ever the fiber goes – or where the fixed wireless signal will work.

Problem 2: The lack of a Value Proposition. The foundation of Marketing is the value prop. Why YOUR Services over everyone else’s? How do Customers benefit from working with you over XYZ? What outcomes do you see your Customers achieve?

You need to talk to your customers. To stay in front of them so you are not just an invoice. To see how you help them now – and can help them next! To see what technology they have, use, leverage – or don’t!

Then you take that knowledge and duplicate those customers!

Problem 3: Prospecting! It is Sales Math. Every rep needs to make a significant number of touches every day in order to keep the funnel going. Email, phone calls, texts, social, and even door knocks are all part of a sales cadence that results in prospects becoming customers.

Daily Activity is required.

Problem 4: Mis-Managed! This brings us to Management. Just checking the number of CRM entries, quotes and contracts will mean that you are missing the data that will let you know that something is wrong with the process.

Daily check-ins allow the sales rep to vent, ask questions, get feedback, report in and feel listened to.

Problem 5: Product Knowledge. It helps if they eat the dog food. Sales reps need to be leveraging the technology they sell. They need to be able to demo it. When using the tech, you will find it easier to talk about the uses and benefits.

Problem 6: Ask Better Questions. The discovery process is about asking questions to qualify – or even better disqualify a prospect. It is about finding out what solution may provide the desired outcome because you have learned about the business, its goals and where the business wants to go. The best questions win because it identifies need and priority.

Managing a sales team isn’t about watching the quota. It is about training up and coaching your team to success by identifying what elements are not part of their habit. Time Management and improving on the sales fundamentals are how your sales team hits their goals. Coaching them daily on every aspect of the sales process: retention, prospecting, discovery, time management, negotiation and closing. Also, coaching them on pitching and demos, knowing the target market and the Why (Value Prop).

There are a lot of ingredients to make the sales team successful.

It is rare to get a seasoned rep who does not need to be coached up and trained. I have never seen that work. The back office for every provider is different. The process, the CRM and other systems, the paperwork, the credit check, the products and the implementation of those products.

Sometimes the business itself is not set up for sales reps to be successful. A good manager can see that and work through some of it to bring sales success to the org.

If you need someone to take a look at your sales org, train your reps, coach them up, or even coach a manager up, give us a call at RAD-INFO INC – (813) 963-5884

Let’s help Buddy Sell!

 

 

Transparency

When you consider the Scansource NewCo uproar, you have to look at the landscape where TSBs are soft on transparency.

All of the PE-backed TSBs have bought bases. If they aren’t actively farming those bases directly, then what did they buy the bases for?

They don’t really talk about that.

They say they invest in partner businesses to help them grow, but that transaction also ties the partner to do business with that one TSB, instead of maybe spreading it around.

I get messages often from principals telling me that everything is fine and that no one is beholden to anyone.  I present exhibit A:

 

This is from a SEC filing by AB Private Credit Investors Corp.  “AB Private Credit Investors is the $18.5+ billion direct lending platform of AllianceBernstein. We provide flexible financing solutions primarily to private equity–backed companies and directly to private equity funds managed by leading sponsors.” Sometimes when a PE investor pledges $100M they spread the money out to several entities. In this case, Exhibit 2 shows  the Delayed Draw Term Loans for Avant and Bridgepointe:

Some times DDTL have complex terms according to Swoop. Regardless, the maturity on these loans are 2026 for Avant and 2027 for BDGPT. $5M and $10M respectively with at least 7% interest plus fees. FYI, annual interest on $5M is $350K.

If you want the latest 10Q, go HERE to page 10. Avant has $15M out at 11.29%!  Bridgepointe has 7 loans out for $19.5M at 12%.

Maybe the principals have control, but they are on the hook for paying it all back in 2-3 years. With declining ARPU on networking and UCaaS, how optimistic is that?

That’s just 2 areas of TSB business that lacks any transparency.

Consider that a partner’s whole income stream is on a contract that the TSB holds that the partner has never seen? Remember before the M&A, when you would place an order only to find out that the TSB didn’t hold paper on that vendor directly? They went through a different TSB or the Agent Alliance for that contract? So your commission depended on many factors working out?

Where was the transparency to partners that at least one TSB had vendors paying SPIFFs to their Channel Managers directly? Or that the Channel Managers aren’t employees, but 1099 contractors on commission only – and with their own side hustle/agency?!

The TSB execs have a distaste for what they call revenue share. That is when a partner puts deals in whatever TSB he feels like. The partners spread out their own risk. In other words, don’t put all your business with any single TSB, just in case! [Note: partners remember Keane and the TNCI clusters.]

The TSB execs make it sound like the partner is abusing the TSB’s resources. For example, I use an SE and CM at Intelisys to get my quotes and answers, then shop that deal over to AppDirect. More likely, the partner used a quote tool to get a quote and then leveraged the vendor’s CM and SE.  Guess what? For some carriers, the CM and SE are the same across TSBs.

What the TSB execs are really saying is that they thought by now they would have exclusivity with more partners, but it hasn’t worked out that way – and they are mad about it.

All the tools and noise and parties haven’t resulted in 100% loyalty. Go figure.

I am transparent about how I do business with TSBs. [You can read about it right here!] Yet the TSBs aren’t really transparent about a lot of their business – and partners are just supposed to be okay with that.

That’s the way it is, but don’t say stupid stuff about one TSB, when in fact your own TSB has similar practices.

For a couple of years, I hosted a round table of TSB heads sponsored by AireSpring. Last year, it got a little heated. This year they would rather NOT have me moderate. Very fitting when you don’t want to be transparent to the very partners who have their livelihood tied to you, but who don’t get to see the finances or the contracts or the inner workings – or any of the jeopardy that their income is under.

 

Quarterly UCaaS Round-up May 2024

Looking at the latest quarterly results of the publicly traded cloud communications providers.

OOMA:

Total revenue was $61.7 million, up 9% year-over-year. Subscription and services revenue increased to $58.0 million from $52.6 million in the fourth quarter of fiscal 2023, and was 94% of total revenue, primarily driven by the growth of Ooma Business and the acquisition of 2600hz, Inc. (“2600Hz”).  [source]

  • GAAP net loss was $3.1 million
  • Total revenue was $236.7 million, up 10% YoY – only $125.9M is B2B!
  • 1.2M core users – only 484K are Biz and 759K are Resi!
  • ARPU $14.72 with a 72% margin – Biz ARPU is ~$23; Resi ARPU is $9

Ooma started in Consumer voice (Telo), acquired Broadsmart (a Broadsoft provider), then OnSIP, then 2600Hz. They also push POTS Replacement.

WEAVE:

Weave is unique because they are verticalized and do not talk about UCaaS, CCaaS or CPaaS – just on results for dentists, vets and medical offices. And they are winning with Integrations:

“Integrations with practice management systems strengthens our product market fit and increases the value our platform provides to customers. We launched new and deepened integrations with Athenahealth, DrChrono, and Patterson Veterinary-owned practice information management systems NaVetor and IntraVet. Scoping and development have started on our integrations with IDEXX-owned practice information management systems ezyVet and Neo and we have a product integration and commercial partnership agreement with Prompt EMR.”  [source]

  • First quarter total revenue of $47.2 million, up 19.2% year over year.
  • Estimated full year revenue is $197M to $200M
  • GAAP gross margin was 69.9%
  • GAAP loss from operations was $8.2 million

RINGCENTRAL

  • Total revenue increased 9% year-over-year to $584 million.
  • Subscriptions revenue increased 10% year-over-year to $557 million.
  • Annualized Exit Monthly Recurring Subscriptions (ARR) increased 10% year over year to $2.37 billion.
  • Mid-market and Enterprise ARR increased 11% year over year to $1.48 billion.
  • Enterprise ARR increased 13% year over year to $1.02 billion.
  • GAAP operating loss was ($11) million.
  •  Spend net free cash $250M on stock buy-back to prop it up for execs.
  • 15K partners and they can only grow globally 9%?!

8×8

  • Fourth Quarter revenue of $179 million;
  • Fiscal Year 2024 revenue of $729 million;
  • Total ARR was $697M, a decrease of 1% from same period last year.
  • 2024 Cash flow from operations increased 62% YoY to $79 million;
  • Year-end cash, cash equivalents, restricted cash and investments of $118 million;
  • Total revenue decreased 2% to $728.7 million.
  • Service revenue decreased 1% to $700.6 million:
  • GAAP operating loss was $27.6 million;
  • GAAP gross margin was 68%, compared to 70% in the same period last year.
  • 3M+ paid Biz licenses.
  • 400K+ Voice for Teams licenses

ZOOM doesn’t release results until May 20, 2024. Today is 5/9/2024.

  • Zoom’s last results in February was 4Q2024 total revenue of $1,146.5 million, up 2.6% year over year.
  • Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of January 31, 2024 was $7.0 billion.
  • Total revenue for the fiscal year was $4,527.2 million, up 3.1% year over year.
  • As of February 2024, Zoom Phone had over 5.5 million paid user seats

The Softswitch Situation

Remember Taqua, Tekelek, and Coppercom? How about Cypress Communications that used Nortel for phone service in office buildings?

Lucent 5ESS switches are housed in Central Offices and at one time were attached by copper to every household in America to provide phone service. Today, copper is going away and the need for the 5ESS is going away as well.

Cablecos provide more voice service than telcos. Cellular is the primary voice service for many people.

The CLEC industry boomed due to the Telecom Act of 1996. Switches getting installed in every POP and CO with space. Integrated T1 sales brought revenue to many CLECs.

Broadband kind of killed the T1. Also 1.5MB was not enough anymore — or so the buyers were told.

Telecom architecture changed. Cablecos don’t have a CO. They have POPs.

ISPs had POPS (Points of Presence) usually data centers. But last mile circuits often came from the ILEC, so it kind of came through the CO anyway.

VoIP Providers use data centers for their POP or CO. The age of the Central Office is declining. Telcos needed a solid, secure building to house the switch and terminate all those copper lines. Now the copper is replaced with fiber. The switches are just servers on racks. Things changed.

The age of the softswitch ushered in UCaaS. Broadsoft, Metaswitch, Ribbon, Netsapiens, 2600Hz, Freeswitch and others powered many a VoIP Provider out of a data center rack.

Broadsoft sold to 450+ providers globally. Netsapiens is in 200+ providers. Metaswitch is inside the network of thousands of telcos. But today BSFT and Meta have been closeted inside Cisco and Microsoft, respectively.  Now that Microsoft is NFV-ing the SBC and the Metaswitch, what will telcos do?  Get a huge pipe to Azure? Or go another route?

It all depends on what you need the switch for. Many smaller cablecos wholesale voice from a provider like Momentum, because they just need cheap residential dial-tone. Lumen chose Alianza as a wholesale softswitch.

The PE-backed FTTH providers will need a way o provide digital voice.

Much of VoIP and UCaaS backends into a CPaaS shop like Bandwidth.com, who handles all the DIDs and telecom back-end for Microsoft and Google.

There isn’t that much TDM inter-connection left. Now it is inter-connected VoIP.

So if Residential Voice is your primary reason for a switch, what do you do?

What if the ISP has 10K, business voice lines? What will they use?

Getting a big pipe to Azure for 10K B2B seats might be cost prohibitive. Might require too much expertise.

With the average business having 12 employees, what kind of B2B offering do you need? Or do you have to be like FTR, VZ and AT&T and have multiple offerings for small, medium and large businesses?  Depends on your geographic market.

This is what providers are going through today. Join a webinar I am doing with ECG on May 30 titled:  BroadWorks, Metaswitch, NetSapiens, Ribbon: What does the future hold?