I wrote in my Target article: “It will probably be upsetting to some in the org because they want to sell to Enterprise but so far the sales have been to small business. (Lots of reasons for that but that will be a different blog post.)” This is that post!

One thing that many people do not understand is that salespeople come in many varieties. That old saying that a good sales person could sell ice to Eskimos is garbage. Sales people are motivated by different things. That motivation plays into what and how they sell.

The channel was built on transactional sales — and still draws a lot of breath from replacement transactions for less money. With MPLS being replaced by SD-WAN, some providers are going to be hurting!

Anyway, if a sales person is transactional, it can mean that the quick sale, the act of getting ink frequently and without much friction is what keeps him going.

There are transactional; there are whale hunters; and there are folks in-between.

Boeing, Caterpillar and others hire whale hunters, someone who can spend two years on an account to close the big sale. For example, selling 777 airplanes to Delta probably only has a few windows of opportunity in ten years. A transactional guy won’t be good in this. He won’t enjoy the hunt. He won’t like following up. He won’t like not getting ink for 3 years. Meanwhile the Boeing sales rep could NOT go work at CDW or Verizon Wireless.

Selling to mid-market is different than small business – no matter how you define both sizes. Some salespeople are only comfortable selling to one size.

Now take a database of 2700 to 9000 partners** that have not been segmented out or anything. This includes partners who never sold anything; who sold one thing years ago; partners selling Long Distance; TEMs; etc. Now the vendor comes along, doesn’t know what a good partner looks like — because they don’t have a Partner Profile. They pitch their stuff to all of them. Some will never sell their stuff — or any services like that at all! Some already have a preferred vendor or two. Some have a boutique business. Some might already white-label services from another vendor that are being pitched. Do you see how much of the partner marketing is a waste of time?

No segmentation. No Partner Profile. No idea what you are looking for. Low batting average this way.

Now if the vendor has a target market, the vendor can quickly disqualify partners who do not service that target.

What if the service offering has a long sales cycle, but the partners usually sell cable? That’s not a good fit.

What if the service offering is great for hospitality or healthcare, but the partner pool doesn’t really touch that? Do you see how this would be what Richard “Dick” Marcinko (RIP) calls a goatf-ck?

Know what kind of partner you need: transactional, middle, whale or other. Know the Target. Know the sales cycle. That helps to narrow the search for partners.

Now if the vendor knows what is Adjacent to their service offering, that can narrow the field fast. Our Buyers typically buy THIS and our stuff. Who sells THIS? Boom!

Most Partner Programs don’t do this. They look at the large number of partners that master agencies throw around see Gold without realizing what that number actual represents. They think every Partner could possibly bring them a sale.

Right now I see this with Mitel partners. Everyone is pitching Mitel partners as if these partners didn’t have the opportunity to sell Avaya or anyone else before. Of course they did. And they chose their path. And that path just shrunk. Do you think they are just waiting for a Channel Vision email blast or a Google ad for a light bulb to go off in their head that they could be selling XYZ also? Much of the thinking is that these partners will change course now and sell something else.

Ideally, vendors want ALIGNED Partners. It only takes about 20 aligned partners to move the needle. An aligned partner is enrolled not recruited; is on-board; adds your offering to their portfolio; sells to your target market; gets certified and gets going! No program needs hundreds, they need 20 of these!

Most of this is in my book, Secrets of Channel Management available on Amazon. Also, my webinar series Secrets for Channel Managers covers this stuff too.

From an earlier article: “What’s your ICP?” What is your Ideal Customer Profile? Who is your target market?

This infographic from Masergy (now Comcast) showed up in the partner portal this morning:

That’s 5 verticals but still. It isn’t all of them. The company size is clear: we don’t work with companies under $50M in annual revenue.

One other company was pretty clear about the target size: Smoothstone (now somewhere inside Intrado). “What we’re really trying to do is use the ‘as-a-service’ delivery model to give enterprises from 50 seats up to 5,000-plus, multi-location businesses, the full benefits of convergence,” the Smoothstone VP of Marketing said in 2007.

Everyone else thinks they are P&G selling Ivory soap, Charmin, Tide and Crest toothpaste — all mass market products. Unfortunately, most UCaaS providers do not have a brand like Tide, Crest, Ivory or Charmin. P&G spends $4.7 Billion a year on marketing globally. If the marketing budget is a fraction of what P&G spends per year, why would the plan be to market to everyone?

There are fundamentals to marketing that are forgotten. There are 4 P’s to marketing – product, price, place, and promotion – see HERE.

Easiest step for any marketing head: look in the CRM or billing system to see what the average seat size is; who was the buyer (title or department); what industry/vertical have you sold to. If this information is missing, hire someone to collect it. Now you have Data to work with. It will probably be upsetting to some in the org because they want to sell to Enterprise but so far the sales have been to small business. (Lots of reasons for that but that will be a different blog post.)

Yet now you have some idea what the Average Buyer looks like – and that allows the company to create marketing to/for that persona; and around that vertical. (If they were smart, they would find software to integrate with inside the two largest verticals to get an advantage there.)

In 2015, 8×8 was one of only two UCaaS providers integrated with Allstate’s eSurance platform. (The other was Fonality, now a part of Netfortris.) Newly minted insurance agents for Allstate would have a choice between a premise system from Fonality or a cloud PBX from 8×8. It made for a good amount of leads. Surprising to me that more providers had not branched out beyond Salesforce. (I once railed at Broadsoft to integrate into Slack for an obvious advantage. Never happened.)

Here’s one reason yo have a real target market: If the target given is 1-1000 employees, that is too Generic. The sales rep or partner will sell it where they think it fits (or are comfortable). The provider ends up in the under 25 seats segment, due to being too vague. When Smoothstone hammered home that it was 55+ employees, that stuck with partners. It produced salience – being top of mind when the Prospect showed up in front of the partner.

Weave is known for the small medical and dental offices. Revenue has grown to $100M but it sells to other verticals like accounting and salons. Verizon OneTalk is the only mobile UC offering on the market. When I was consulting there in 2016, salons was the number one vertical. Bluip is a Broadsoft shop that started out in the white-label business until VoIP Logic sold. Now it focuses on hospitality. You can make hay in a silo where the word of mouth echoes louder and the price sensitivity goes away.

Who is your Target? Next to your Value Proposition it is a critical component to success.

In 2020, I presented two webinars (HERE and THERE) for channel managers that included tips for Recruiting partners. If you pay for the webinar now, I will send you the mp3 from that webinar. Or buy my book, Secrets for Channel Managers.

Understand that when a vendor emails a partner, it is one of many unsolicited emails that the partner receives. Most end up deleted. Craft a better headline for that email! Make the first sentence interesting enough to grab attention.

What is the Value Proposition? Why should a partner sell your stuff? If thevendor sells SD-WAN, UCaaS, CCaaS or network, why YOU and not the vendor the partner is currently using?

• Be Creative!
• Don’t send attachments!
• Use Humor!

Several DON’Ts:

• Don’t Puke the company spiel!
• Mass emails or impersonal templates don’t work when recruiting a partner.
• Don’t list every product.
• Don’t Be Lazy!
• Keep it short and sweet.
• Don’t send attachments! We don’t know you & security!

Here are a few other ideas:

• Treat Recruiting like Dating.
• Give them a reason to choose you!
• Ask a great question to get me interested!
• Leverage quotes from successful partners!
• Tell them about a win!
• Take pointers from email marketing pros like HERE or there.
• Do you have a Partner Profile? Or is it anyone who fogs a mirror?

An example email:

Hey, Peter! I heard from [master agency that gave out my info] that you sell a lot of network. Our partner, XYZ TEM in NJ, just started adding our SD-WAN offering to their network clients. If you want to hear how that worked out for them, call or email me back! thanks and have a great day!

Hire RAD-INFO Inc to help with your Recruiting efforts. (813) 963-5884 or buy the MP3 on recruiting HERE!

What do the numbers look like? Despite all of the noise, the year over year growth of UCaaS isn’t great. While RingCentral is in the 35-38% YoY ARR growth, they have 9 of the largest partners – Verizon, AT&T, Avaya, Mitel, et al to help them grow. That’s a lot of unfilled potential.

8×8 grows around 15%. Vonage on the UC+CC portion is single digit. (That doesn’t matter because Ericsson acquired it for Nexmo.)

Zoom is trending down to 35% but there was no way to keep doing 50-380% growth quarter after quarter. With 2.2 million Phone users, they are certainly grabbing share.

Mitel got out of the UCaaS game. So what does that say about the growth? So did Avaya. They turned it over to RNG also. Verizon has Cisco and Broadsoft but chose to use RNG for SMB. AT&T once owned CallVantage consumer VoIP. AT&T has Cisco, Metaswitch and Broadsoft, but keep cycling VoIP service offerings as they search for one that sells as well as Office@Hand by RNG. Comcast had a Broadsoft – and acquired Masergy which had a BSFT! Yet Comcast acquired Blueface — and we haven’t heard a peep since that happened in 2020. That is a lot of Big Companies that struggle to sell UCaaS to SMB. Enterprise is different since Cisco HCS and Microsoft are in the mix.

There are several providers who are close to the $100M mark. That is a significant milestone.

Dialpad announced in 2021 that they were at $100M ARR. They have raised $400M to get to that point. They have used that money to acquire a bunch of AI and other functions. The valuation they are throwing around is $2.2B.

Nextiva is privately held in Arizona. Recently, Goldman Sachs invested $200M in the company. The valuation is estimated at $2.7B. The revenue is $200M, double what Dialpad is doing. Nextiva has had a bunch of musical chairs in the executive wing lately. Maybe better positioning for an IPO? Or for a new phase of growth. As they say, “The thinking that got you here won’t get you there.” Honestly, the Musical Chairs at many companies has been stupid crazy in the last two years. Hard to execute a strategy when the chess pieces keep changing on the board. It takes 2-3 years to execute a strategy successfully. Some people in telecom aren’t in the position a full year!!!

Intermedia is known for Microsoft Exchange hosting with 7000 partners. Intermedia also has a fully flushed out and robust UCaaS+CCaaS offering in Unite. Intermedia is doing $251.6M according to its S1 filing. The UCaaS biz is doing almost $90M annually, about 35% of that.

Another UCaaS provider actually went public last year. Weave is a cloud comms platform for small healthcare offices. The company specializes in dental and medical offices. Revenue is just about $100M in ARR.

Sangoma acquired Star2Star early 2021 for $400M. S2S was doing $79M in revenue.

CXDO before they acquired NetSapiens softswitch had less than 12% YoY growth just selling UCaaS per their 10-K for 2020.

There are over 2000 providers offering UC in the US. Most are private, so who knows what the revenue numbers look like. Even the public ones like LogMeIn (going private equity) don’t break out the numbers. Windstream offers Broadview, Mitel, Avaya and Allworx now. (They paired it down, but don’t talk numbers.)

CenturyLink/Lumen launched Engage, but I have seen nothing about it. This has to be a third offering from C-Link. They can’t seem to move the UC needle. You would be amazed how many of these ILECs resell a mix of competitors like Zoom (Wind) and Chime (Nextiva, C-Link) to flush out the UC bundle.

So the numbers are foggy and the analysts keep saying CAGR of 30-something per year. It would be nice if it grew that much – and maybe price decompression and product replacement are shading the growth. The hockey stick growth of Zoom’s $10 Phone has certainly caused a stir in the market. As the price per seat diminishes, it is harder to make that revenue needle move as fast.

Offering MS Direct Routing – like almost everyone – notably 8×8 with 100K subs – is a sub-$9 sale. Takes a lot of these sales to move the needle — plus when selling MSDR, you aren’t selling UC seats!

PBX hardware sales actually did really well during the pandemic to the surprise of everyone I speak to. This would lead to SIP Trunking or CPaaS sales. These aren’t UCaaS seats either.

CPaaS sales are growing at Vonage, Twilio, Sinch and Bandwidth. CPaaS and CCaaS are growing. (Five9 is at 35-37% YoY.) Some would say that UCaaS is getting marginalized, but I think it has to do with a lack of sales skills. Our industry is all about replacement sales transactions for a savings. Nothing about cloud comms is same-same. As different as AWS is from your colocation rack, as Salesforce CRM is from ACT!, cloud comms is from the PBX. Education is all.

This isn’t me being down on UCaaS. This is just notice that UCaaS providers need to educate their sales teams and Prospects in order to attract growth. They also might want to alleviate the Quota thinking at all levels because that thinking means sell at any price anyway you can.

Microsoft Teams takes up a lot of space in the UC&C discussion. With over 250 million active monthly users and 80 million Phone users, any provider has to take notice. Many UC providers offer a Direct Routing option for MS Teams. Essentially that is dial-tone and SMS for MS Teams. That isn’t robust or valuable. It’s like the days of switched long distance.

UC Providers are so needy for revenue of any kind that they have started selling SIP trunking as a Microsoft add-on. They sell UCaaS on price, even as Zoom Phone has entered the fray, signed up 2 million subscribers and at $10 each, compressing the pricing.

By the way, if you think price is sticking point, you should take some sales training with me. It is never about price. There are FREE alternatives. There are low cost options. When a true TCO is done, taking into account downtime, management time, clumsiness and lost productivity, the winner is not the cheap solution. Most businesses want tech to work seamlessly in the background. That’s what the job of a service provider is.

You are selling Productivity and Customer Experience now. Not a phone system.

Most UCaaS provider don’t see growth like Zoom or Microsoft, because they are selling phone systems. Dialpad, Zoom, MS are selling software. They talk about it like it is software. AI, UX, analytics, visual voicemail, meetings, presence and other capabilities and oh, yeah, dial-tone too. UCaaS comes at it from phones first. That has always been a hurdle. Who wants to be a Poly or Yealink distributor? Who wants to spend cycles haggling over handsets – which one, own or rent, etc.?

Where is Microsoft going?

Since buying Metaswitch, Microsoft has slowly been moving ILECs – the smaller incumbent phone companies – to the cloud. Metaswitch tried to get these customers to move to NFV and SDN in 2016. Now with Azure for Operators, MS CPaaS, virtual SBC and more, these telcos ARE using NFV. Right now, MS offers Metaswitch’s MX as a softphone, but that is all going to morph to MS Teams being the default softphone – for about 900 telcos globally. Do you still want to be selling SIP trunking, I mean, Direct Routing then? Then you will really have a race to zero.

The key to winning sales is to ask great questions and do real discovery. In the four secret shopping projects I have done since 2019, the discovery by the UC providers has been pitiful. We are still at the early majority of the tech chasm on UC&C. This means that education is still a priority. That means that the salesperson’s job is to educate the prospect on the potential of the tech. Most people don’t know what they don’t know. It also isn’t their job to be the UCaaS SME — that is YOUR job as a UC salesperson. You need to discover needs and where the business is looking to go, then explain how the tech can take them there.

Every business would like Amazon like capabilities – that is the underpinnings of Digital Transformation. It is the UC provider’s job to explain to businesses how their platform can deliver on those functions. That is selling Value, that is selling Solution, not pushing product.

In 2022, UCaaS, CPaaS and CCaaS won’t matter. They are morphing into one big bucket of functionality that businesses want to obtain. Most buyers are not searching on any of those terms! They don’t care about the packages or the buckets, they want to buy functionality, customer service, outcome. Some companies are using CXaaS but it really is just Business Comms.

Does your team need some sales training? Hire the guy that wrote the book on selling cloud! Call RAD-INFO Inc at (813) 963-5884 to schedule that training.

Are you doing a sales kick off? I have a great deal on a 30 minute talk about the trends in the UCaaS market mixed with sales tips and competitive intelligence. Call RAD-INFO Inc at (813) 963-5884 to add some flavor and impact to your event! Download a one page speaker sheet HERE.