Monday, May 26, 2008

Keys to Selling VoIP to SMB

Ike Elliott has a post about 8x8 re-focusing on the Business Hosted VoIP customer. 8x8 is chasing the Very Small Business (5 and employees and less). Ike makes a couple of important points:

  1. "Virtual Office product is designed to appeal to very cost-conscious buyers, and these buyers are concentrated on the small end of the small business size scale."
  2. Over-the-top VoIP providers can not control the quality, so expectations and experience of the customer sometimes result in unhappy customers, which equates to churn over 3% (both Vonage and 8x8 have churn of about 3.3%).

Every VoIP and PBX vendor is in the SMB space for investor purposes. (It's a huge market). The problem is one of marketing. (It's a huge market to talk to). How do you get to market? Keywords (Adwords), search engine marketing (SEM), call centers, direct mail, strategic partners, and local.

It costs millions to advertise to the entire SMB segment. As per my ISPCON session, it is best if you Be Specific. Who is your best customer? What do they look like? How do I get to them? The better you can describe your Best Prospects, the easier it will be to define a plan to market to them.

I say Local because if we take a VoIP Provider like 8x8 or M5, we would wonder why with one based in Santa Clara and one based in NYC, why they have not taken enough market share locally to keep them busy. M5 has roughly the highest concentration of businesses in its home market of NYC plus probably one of the more "wired" cities. The only reason I can think of to branch out beyond Metro NYC/NJ/LI is because your Investors insist.

But back to the marketing, if you go Local, you are closer in proximity to your prospects. Charity events, networking, and interacting around town will get you noticed. You can be High Touch because your clients are local. Offering connectivity to your customers becomes easier. Quality goes up. Churn goes down. And finally you can partner with other companies to introduce your services. Milk the cows at home.

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