Today, startup businesses and even established businesses have more opportunities to use technology to resolve and improve their situations. These companies must learn the skill sets to not only survive but prosper too. Our industry offers a plethora of products and services to help businesses reduce and control costs, improve collaboration and to make good on better-faster-cheaper and easier-to-use and -maintain. Companies at all stages of their existence can become complacent with static attitudes and missed ventures that only add up negatively on the bottom line. When companies lose their ability to act and think the way they did during the exciting start up stages, they may put themselves in danger just as much as when they can’t move beyond being a start up.
In my last post, SMB Failures I discussed the likelihood of most businesses failing. Key reasons for SMB failures vary, and experts list several reasons. The reasons themselves are important to understand, and vendors that don’t grasp them are undermining their own sales efforts and possibly those of their clients. Six Disciplines is a strategy execution coaching program that lists "Top 10 Reasons Why Businesses Fail."
Three reasons cited are: "Poor Capital Structure, Failure to Control the Controllable Costs; and Failure to Prepare for Volatility of Uncontrollable Costs." These are three areas of customer engagement that vendors can focus in on immediately to tailor their selling efforts. However, concentrating your selling efforts won't fix any SMB that is unfixable or un-trainable. I also mentioned in my prior post that businesses must make heads or tails of how to use cash or credit and then when to do so. In another post, Squeezing & Compressing, I stated that I’m still not satisfied that our mix is right. Services today along with technology moving towards convergence entices companies, and those that resist face the burden of falling out of date and behind in potential improvements. The PBX and PSTN can longer remain static fixtures in a company. I don't mean to say the PBX or the PSTN are obsolete, but we're only beginning to realize the potential of cloud services as communications moves away from old infrastructure. The potential of bridging cloud services to embedded SMB infrastructure remains largely untapped.
The startup market isn't one to depend on for recurring revenue and growth. Existing SMBs often overlook the potential benefit that’s available from hosted UC solutions without disrupting or changing out their existing assets.
Today's menu of telecommunications services is flexible and dynamic. Vendors need to understand that a customer company’s success is vital to their own, and I think this lesson in the startup and SMB space may just apply as much to large enterprise. There's been a tremendous amount of lip service attributed to UC, and vendors can save their breath when it comes to the SMB space unless they’ve got something tangible that delivers not just value but something that impacts the P&L of the organization. Razor-thin budgets are the new force to be reckoned with, and this means the sales person not only has to stand but deliver on accountability. Take note of vendor focus because it is changing and no vendor can be everything to everyone, especially when everyone can’t afford what you have to offer.
8X8, Inc. released their fourth quarter financial results for 2011 recently. I spoke with Joan Citelli of 8X8 because I wanted to learn more about the churn rates of customers in the hosted services market that they serve. Joan told me that approximately 50% of their lost customers (that averages about 1,467 per quarter for the past 9 quarters) are due to customers closing their businesses. The remaining half was for various other reasons.
The under-10-station market is an excellent area for hosted providers to focus that could help startups and SMBs achieve controllable costs while improving their cash positions. For example, 8X8 offers a Virtual Office Solo starting at $7.99 per month, and this includes enough cohesive features to empower the many one-person companies. Compare this to about $28 per month for just a landline. When these same one-person companies grow--and it happens--does it mean they retain their same services? It depends upon the company, needs and solutions required to grease their wheels. What's important is that the business owners don't become complacent or ignore other solutions that could weave success into their businesses by improving customer communications, employee productivity, reduced processes or other benefits.
