I picked up some interesting items from Zayo's 4Q 2011 report:
"Our business units primarily engage in direct sales without the use of agents or resellers. In the aggregate, our three business units employ 36 sales representatives. Each of these sales representatives is responsible for meeting a monthly quota. The sales representatives are directly supported by sales management, engineering, solutions engineering and marketing staff."
That's a pretty straight forward sales structure.
"ZB sales force is distributed across the country and focuses on a select group of 100 accounts. These accounts consist of the largest consumers of both lit and dark bandwidth in the United States, including national carriers, wireless carriers, PTT’s media and content businesses, RLECs, CLECs and other bandwidth-intensive businesses. The Zayo Bandwidth sales team is focused on delivering the Company’s lit bandwidth infrastructure product offerings to these select 100 accounts. The ZFS sales force collaborates with the ZB sales force in order to market and deliver the Company’s dark bandwidth infrastructure and lit bandwidth infrastructure product offerings to the 65 accounts identified by management as the largest bandwidth consumers in the United States."
65-100 accounts. Zayo knows exactly who their customers are. Do you? Do you even have a list of who you want to be your customer?
"In January of 2011, the Company established the Zayo Networks sales and solutions organization. Zayo Networks includes approximately 20 sales representatives organized into geographic teams. The Zayo Networks sales team has a mission of selling all of the Company’s product offerings to companies outside of the top wholesale accounts that have fiber-based bandwidth and colocation needs, including healthcare, education, financial companies, regional carriers, Internet service providers and other bandwidth-intensive businesses located near our existing network assets. Each regional team has dedicated project managers, sales engineers, and Outside Plan Solutions Engineers to develop cost effective and reliable customer network solutions."
Notice that they have identified exactly who the customer base is. Have you done that? Want big customers? That’s what you have to do.
“Our largest single customer accounted for approximately 13% of our monthly recurring revenue as of June 30, 2011, and total revenues from our top ten customers accounted for approximately 47% of our monthly recurring revenue during the same period.”
That makes Zayo very susceptible to a revenue downturn when so much revenue comes from just 10 customers, but it also means that you must interface with those 10 customers at multiple points in the organization to know exactly what is happening.
"As of June 30, 2011, (i) our total debt and capital leases were $365.6 million on revenue of $287.2M." I just had to add financials.
the filing notes, "If We do not Adapt to Swift Changes in the Telecommunications Industry, We could Lose Customers or Market Share." <-- That goes for everyone!