Savatar Study Shows SMB Owners Primed for VoIP, but Providers are Scrambling
to Find Compelling Product Offers and Sales Strategies for this 1.8 Million
Company Market
BOSTON, Sept. 20 /PRNewswire/ -- Most of the 1.8 million small and medium
businesses (SMBs) in the U.S. have not yet answered the call for emerging
VoIP, as new and traditional telecommunications, data and equipment providers
struggle to differentiate their offers, and create compelling price and
product strategies that ring true to SMB owners.
A study of 300 SMB decision makers, and an analysis of the product and
pricing strategies of major VoIP providers, conducted by the technology
consulting firm Savatar and presented at the Fall VON 2005 Conference this
week in Boston, reveals that the SMB market is ready to move to VoIP. Yet, in
contrast, the study also shows that VoIP providers have not tuned their sales
processes or their pricing and offering strategies for this market, and that
SMB decision makers are unclear where to turn for the best VoIP options.
The major findings of the study demonstrate that the SMB market is still
wide open for VoIP players who want to seize this growing segment of the
industry:
Key Findings
* There is more work to be done in educating the SMB market about VoIP.
While there is general familiarity with VoIP (24% and 51% are "somewhat
familiar" or "familiar"), a striking 25% of SMB companies are
"unfamiliar" with VoIP and its advantages.
* Current pricing and service offers will likely create a commodity
spiral in the next 18 months -- offering breakout opportunities for
companies who shift their positioning from a Return-on-Investment (ROI)
pitch to Total Cost of Ownership (TCO) models. Lowering monthly
recurring charges is a primary driver for most of this market (74%
indicate MRC as "compelling" or "very compelling"), yet lowering TCO
and easing administrative costs were almost equally important (73% and
68% respectively) for SMB decision makers.
* The SMB segment is wide open for traditional or new players to capture
the market. Respondents were evenly divided among traditional and non-
traditional telcos, ISPs, cable operators and equipment providers as to
who they might turn to for VoIP service. Thirteen percent weren't sure
who to turn to for VoIP solutions.
* Traditional telcos, ISPs, and cable operators who have already deployed
VoIP aren't succeeding in the high-touch, high-cost sales process
needed to convert this market. They may need to turn to channel
partners who have stronger knowledge of the product and can offer a
more "consultative selling" process.
* There is a growing opportunity in the SMB market for providers to offer
related services such as Web collaboration tools, email hosting, and
high-speed data services as part of new VoIP offerings.
* VoIP delivery models -- premise-based or managed services -- are not
well understood by the SMB market. More than 50% of the respondents
weren't aware of the different internal and external delivery options
available to them.
"The small and medium business market is that gem the entire VoIP industry
is chasing, yet this segment isn't well educated about the benefits of VoIP,"
said John Macario, president of Savatar. "VoIP providers are struggling to
reposition their product, services and pricing for SMBs, and are looking at
some dramatic changes in their sales processes, service offerings and pricing
structures to reach and serve this market."
One element of the study was an in-depth analysis of product, pricing and
service offerings, as well as an examination of the sales processes used by
leading VoIP providers. The analysis revealed that traditional telemarketing
and high-touch sales meetings are either not working or not sustainable in
this market.
"The data shows that SMB decision markers are pretty sophisticated and
need a more consultative sales process, not just a sales call touting a bunch
of features," said Richard Grange, president and CEO of New Global Telecom
(http://www.ngt.com), one of the sponsors of this study. "We see the VoIP
industry turning to channel partners who can help penetrate this market."
This study, unveiled at the Fall VON 2005 conference, offers one of the
first detailed views of the SMB VoIP market and the product, positioning and
total cost-of-ownership factors that will drive this industry segment.
About Savatar
Savatar is a management consulting company that helps telecommunications
clients succeed in selling VoIP solutions to the small and medium business
(SMB) market. The firm has worked with large carriers, wholesalers, equipment
providers, and software developers to define product, establish sales
channels, and optimize sales techniques for VoIP products in the SMB market.
For more information, please visit http://www.savatar.com.
Note to Editors:
A media summary of this research is available from Savatar by calling Kim
Novino at Bridgeman Communications at 617-742-7270 or by email
(kim@bridgeman.com). Interviews with the study's authors, John Macario and
Suke Jawanda of Savatar, as well as the study's principal sponsors, can also
be arranged.
SOURCE Savatar
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Related links:
http://www.savatar.com
CONTACT:
Kim Novino of Bridgeman Communications,
+1-617-742-7270, kim@bridgeman.com
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