The buying experience for business communications has been disrupted by technology.
It wasn’t long ago that if your company needed to acquire a new communications system, you as the buyer could easily find a broad selection of communications vendors, match them up, and make a decision based on your organization’s needs. Distributors of NEC, Avaya, Cisco, Shortel, and Mitel were easy to find and invite out to your office to meet, demo and professionally build a proper solution.
But then something happened. These manufacturers began seeing a decline in their distribution channel just as cloud-based solutions began in earnest to take market share. This led the buyer on a different journey; a journey now marked in most cases by the buyer having to research solutions online without any professional help, while attempting to meld technical jargon with their day to day operational requirements. In most other instances, communications technology is purchased through a different relationship from a party who is not even a communications expert at all, whether a IT vendor, a third-party accounting vendor or back office outsourcer, or maybe even the company that leases copiers.
The key here for end customers, as the ultimate buyer, is who do you trust to provide you with advice on your communications technology?
At Altus, we work with companies directly and as such, there are many times where a company will call us and tell us they have three quotes they received from one of their trusted “non-communications” vendors but really can’t make heads or tails out of any them. They want to meet in person, over a video or have a phone call to discuss everything.
In one such example, the company had a very good local IT vendor who provided the requisite three quotes and recommended buying from the largest company of the three. When asked some simple questions like how fax would work, what hardware options there were for conferencing and video, or who will be the first point of contact when problems arise the IT vendor didn’t know the answer. The IT vendor went looking for answers, and interestingly went not to the actual service provider but to a master agent. You see, the service providers rarely, if ever, sell direct. Most of these providers sell primarily through the channel and use master agents who aggregate sales for the service provider. In this case, the IT vendor had a relationship with a Master Agent who sent them three quotes from three different providers. The problem with these three quotes was that they were completely different, not apples to apples, and did not meet the needs and requirements for the end customer. So why did the Master Agent and the local IT company put these three service providers in front of the customer without really diagnosing the customer requirements?
Green is king with Master Agents and I don’t mean the climate; green as in cash. It happened that during the month the customer had their IT vendor show them the new solutions, the IT vendor received quotes from his vendor, the Master Agent, and during that month those three service providers had the largest commission plan for the Master Agent and IT Vendor. In this case, each quote would pay out anywhere from 3x to 6x times the monthly recurring revenue generated from the customer – up front. On the backend, the winning service provider will pay the Master Agent anywhere from 15% to 30% of monthly recurring revenue for the term of the contract.
When we reviewed the quotes, the monthly recurring cost for the services was around $800 meaning a commission of $5,600 to the trusted IT vendor up front, and on-going commissions split with the master agent for another $160 a month. The kicker to all of this was the final straw for the customer; the trusted local IT vendor was going to bill another $4,500 for project management services for the implementation that is already being project managed by the service provider.
As we had discussions with the company to fully understand their current and future needs, they asked why their IT vendor just didn’t give them that money back since they’re not doing anything? Good question. What about day 2 services? Another good question. The IT vendor is nowhere to be found. In the case we outlined, two of the three VoIP service providers in the example are publicly traded and have yet to ever make a single dime in their history. The third company is another well-known private national company that had three major multiple day outages in 2019 due what they characterized was “too much” demand on their systems. Are these really the right platforms for you as the end customer?
At Altus, we market our services directly to end customers, install more than 90% of customer sites with our own engineers and technicians and provide complete support and training from our U.S. based team. Our platform is the best in the world – powered by Cisco Webex – and we deliver a completely unified solution for VoIP calling, teams, meetings, video and contact center.
Altus is the premier choice for cloud-based business communications and technology, providing companies with flexible and secure technologies that help employees and customers stay connected more easily. Whether looking for basic voice service, comprehensive collaboration, contact center, or network services, business executives trust Altus to deliver the latest features and functionality without costly capital spending programs. Simplify your business with Altus. Visit www.altustechnology.com or call toll free 866.922.4001.