Selling to Network Service Providers
Eclicktick Corporation White Paper
Table of Contents and Executive Summary
Copyright Alistair Davidson, August 2, 2002 as an unpublished work.
Table of Contents
Selling next generation networks 1
Executive Summary 2
Introduction 4
Overexpansion 4
Competition 5
Low Profitability 6
Paradigm Shift 7
Risk Avoidance 9
Bureaucratic Decision Making Behavior 10
The Source of Innovation 12
What Kinds of Return Should the Telephony Industry Be Looking For? 12
The Importance of Skills and Knowledge 14
Portfolios, Scenarios and TINA 16
The Strategic Sales Implications 17
Project Strategies 18
Reactive Sales Strategies 18
Proactive Sales Strategies 19
Learning Oriented Strategies 19
Sales Success Rates 21
Project Success Rates 21
Project Value Creation 22
Overall Sales Strategies 22
Executive Summary
Recent events in the telecom industry - the dotcom bust, accounting problems, drops in demand, decreases in market valuation, excessive leverage, decreases in capital spending - make the telecom market more difficult to sell to. However, the fundamental trend towards use of the Internet for increasing productivity, towards increased use of wireless and the development of integrated information processing, content delivery and telephony applications remains a strong secular or long term trend.
Sales innovation will be required to obtain sales in this new harsher market. This white paper addresses some of the innovation that is required. A key piece of innovation required for vendors is the trend towards (1) the use of advanced business cases for justifying sales of new technology, and (2) a switch towards the total value of opportunity (TVO) away from simplistic measures such as payback and ROI, or even total cost of ownership (TCO). Total cost of ownership is frequently meaningless if marketing success is missing. Or to put it another way, replacing obsolete technology with less expensive, more flexible technology doesn't work unless the market is there for the service.
A tactical reason for business cases is the very practical one that sales people who understand the economics of their clients are in a better position to (1) sell the right solution, (2) structure a pricing deal that is win-win for both firms. A typical problem in the current environment is the reluctance to approve capital expenditures, no matter how good the business idea. Solutions that can be structured as operating expenses, leases or financed on the basis of usage will typically have shorter sales cycles and lead to fewer missed opportunities.
Understanding the usage and cost patterns for a client also makes it easier to propose out-tasking, out-sourcing, co-delivery or other innovative relationships.
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