No doubt you’ve heard the warnings: evolve your business model or else! The red alert to sell cloud and managed IT solutions is repeated so frequently it’s become a constant drumbeat you might be tuning out. After all, it signals a distant threat that doesn’t require your immediate attention, right? If you think so, that’s where you are wrong.
No, I‘m not saying your time is up — game over! But you are thinking about it the wrong way. Change is not something that happens at some point in time; it’s something that happens over time—a series of incremental changes that transforms a landscape, a marketplace, a business, or even a person over months, years, decades.
Think about the last time you ran into a friend you hadn’t seen in a very long time. The changes in their physical appearance are remarkable. (You probably remarked that they looked great, even if you thought they let themselves go). But, to those that see them every day, the differences are hardly noticeable. They happened gradually over time.
This same kind of transformation is happening in your business. The outcome—positive or negative—depends on whether you are an active or passive participant. Just like your aging friend’s health is impacted by his attention to diet and exercise, your business’s health is impacted by your attention to customer needs and technology trends.
Been There, Done That
The good news is you’ve probably evolved your business successfully before. If you’re like most telecom agents, you started by selling long distance. Later, you added integrated voice and data, then SIP trunking and MPLS virtual private networks.
“Adding managed services, including cloud, data center, mobility, continuity, etc., is just the next step in our evolution.”
And you’re not alone. Technology evolution isn’t just impacting channel partners, but all players in the value chain.
Put bluntly, the CLEC model is essentially dead. We’ve known this for some time and have been taking steps to ensure that we are transforming our business in lockstep with the shift in the marketplace toward managed services.
The market is rewarding those companies that are making this transition. While many traditional telcos are valued at five times their operating profit, managed services providers (MSPs) are valued at 10-12 times.
MSPs’ higher valuation is due in part to their ability to retain customers longer and to capture more of their spend.
But it can’t happen for you unless you make it a priority for your own business. Complacency is your primary adversary. Continuing to sell more services for less is not the answer. The telecom agents who are not just surviving, but thriving, today are genuine advisers and consultants, not just those who are optimizing a bill and saving customers some money. Focusing only on cost-savings from products undergoing commoditization has a built-in expiration date. Eventually, pricing normalizes and value is redefined.
Where Should You Start?
First, you need to understand how to drive value to your business. It may help to follow these Value Rules courtesy of the Harvard Business Review:
- Be the least replaceable player in the value chain. Experts say, typically, that’s the one that integrates several components and delivers the final product to the customer. In your role as a broker, you can bring a range of managed services together to provide a business solution to your customer.
- Become the guardian of quality. In general, customers perceive companies associated with quality products as delivering greater value. You can easily position yourself in this role by sourcing best-of-breed managed services for your customers.
- Follow the customer. As the needs of customers change, value also shifts accordingly. Today’s business customers are becoming more technology dependent, but they are consuming and purchasing technology differently – not only in greater quantity but also “as a service.” Adding managed services can meet this growing need.
- Manage the growth story. In general, companies can join competitors in pursuit of a growing market or dominate a shrinking one. Rather than continue to offer pipes for less, you can layer on services that rely on those connections, reducing your churn and increasing your average revenue per customer (ARPU).
Next, you need to figure out what services you can add that will help you move up the value chain as you streamline your business model. There are many options under the managed services umbrella, but for telecom agents, I recommend starting with one of the following practice areas:
- Managed networks, including IP MPLS VPNs with managed routers for multi-location customers
- Data center services, including colocation, redundant connectivity and security
- Continuity, including diverse last-mile options and 4G failover as well as cloud storage and more
- Security, including managed firewall, intrusion prevention, antivirus, content filtering and VPNs
Lastly, practice. Even the most celebrated performers — athletes, musicians, scientists, artists, etc. — train daily to stay at the top of their professions. Educate yourself, rehearse, role-play, etc. This will go a long way to ensuring that you remain a credible adviser for an increasingly sophisticated buyer in a continually evolving technology marketplace.
About the Author
Ken Bisnoff is Senior Vice President of Strategic Opportunities for TelePacific Communications, a Los Angeles-based provider of comprehensive connectivity, cloud and continuity to companies ranging from small businesses to enterprises with hundreds of locations. Bisnoff has senior management responsibility for retail sales through direct and agent channels.
About the TelePacific Telepartner Program
TelePacific Communications, an Intelisys Supplier Partner since 2003, provides comprehensive connectivity, cloud and continuity solutions to companies ranging from small businesses to enterprises with hundreds of locations. Headquartered in Los Angeles, the Company serves companies and organizations anchored in California, Nevada and Texas. Its multiple award-winning network and communications solutions and focus on customer service have powered 55 consecutive quarters of growth.TelePacific’s broad portfolio of customer solutions enables anywhere-to-anywhere communications, at any speed, and helps businesses run more efficiently, improve collaboration and ensure against business interruptions. Learn more here: TelePacific Agent program.