An Opportunity for a Technological Leap

In the Small/Medium Business Telecom Market

A White Paper Study

Unified Communications [“UC”] solutions are, without a doubt, beneficial to

business. UC, defined as “communications integrated to optimize business processes”
represents communication capabilities like integrated messaging including text,
presence, video conferencing, call control, and even cheap toll calling and the ability to
integrate decentralized and mobile offices and workers. A subset to UC, Voice over
Internet Protocol or IP Telephony is technology taking your typical phone calls and
delivering them via the Internet rather than depending on the traditional telephone
network.

Though the technology is proven and the benefits significant and tangible,
Small/Medium Businesses [SMBs] are rarely equipped to execute such solutions. The
SMB market, defined in 2005 as a company with less than 500 employees, represents
99.9% of the 25.8 million businesses in the United States. 1 Such businesses simply lack
the money and IT staff to evaluate, purchase and implement the types of equipment and
services that are inherent in modern VoIP solutions. Because of such, 70% of SMBs
indicate that they would prefer a hosted solution to a premise-based one. 2 Businesses,
as a whole have been slow to incorporate UC components as compared to consumers.
The most common reasons cited for such a disparity have been “poor marketing and a
lack of education.”3 This is particularly acute in the SMB market, where there is a lack
of awareness and confidence in VoIP, a barrier to entry because of higher price points for
the equipment necessary to implement such solutions, and a general lack of convenient
distribution for SMBs to acquire the needed technology. 4

SMBs, which make up the vast majority of businesses, would utilize UC solutions,
but for the following reasons:

1
Stuart Basefsky and Sean Sweeney, “Employment Relations in SMEs: The United States, Cornell School of Industrial and
Labor Relations.

2
Colin Beasty, “SMBs Dial Up VoIP,” December 7, 2005, Destination CRM.com,
http://www.destinationcrm.com/Articles/CRM-News/Daily-News/SMBs-Dial-Up-VoIP-42360.aspx

3
Christopher Musico, “VoIP Penetration Steadily Increases, May 28, 2009, Destination CRM.com,
http://www.destinationcrm.com/Articles/CRM-News/Daily-News/VoIP-Penetration-Steadily-Increases-53940.aspx

4
David H. Yedwab, “2008, The Year for SMP VoIP,” February 22, 2008, TMC.net. http://smart-data-
centers.tmcnet.com/topics/trends/articles/21411-2008-year-smb-voip.htm

1
  The inability to technically implement and support such solutions
 Poor marketing and lack of education
 Lack of confidence in the technology (and one might surmise, the provider)
 High cost of entry
 Lack of a convenient and cost effective product distribution system

One would think that if a company could conquer these challenges, it would be an
overwhelming success. The overarching question is why hasn’t this happened?

What In It For the SMBs?

A recent study suggested that the average SMB could be wasting $524,469
annually as a result of communications difficulties, well defined as latency and barriers
surrounding everyday business process and collaboration. 5 Ignoring these problems
leads to higher operating costs, unsatisfied clients, and competitive disadvantages. 6 As a
further complication, this business market is changing – over half of the study’s SMB
respondents consider themselves as “mobile workers.” 7 As a result, one might
conclude that effective communication and collaboration would be of paramount
importance, yet fragmented communication systems become the foremost barrier to
assisting these workers and their companies.8 In fact, the study identified five main pain
points that interrupt and prevent effective communication.

1. Inefficient Coordination. Companies have (a) difficulty in organizing

communication among team members, affecting the ability to respond quickly to
time sensitive customer requests and (b) time efficiency wasted in attempting to
coordinate intra-team communication.
2. Waiting for Information. The delay in waiting for requests and responses for
information from others is a big time waster and negatively affects critical
business processes.
3. Unwanted Communication. A real time drain, unwanted communication, from
low-priority calls to voice mail creates distractions and disrupts workflow, leading
to lower productivity and missed deadlines.

5
SIS International Research, “SMB Communications Pain Study White Paper: Uncovering the hidden cost of
communication barriers and latency.” March 10, 2009. http://www.marketintelligences.com/industrial-b2b-
journal/2009/3/10/smb-communications-pain-study-white-paper-uncovering-the-hid.html

6
Id.

7
Id.

8
Id.

2
 4. Customer Complaints. The inability of clients to reach the
right person in a timely manner not only negatively affects the business client
relationship, but also leads to a loss of productivity.
5. Barriers to Collaboration. The ability to set up collaboration sessions is not only
frustrating, but also represents a real productivity loss. This is even more acute
when applicable to the vast numbers of mobile workers.9

Therefore, greater worker productivity, a better client experience, and real dollar
savings await the SMB that wades into the UC waters. But enterprise-sized companies
have spent billions of dollars and countless man-hours reaching for the benefits of UC.
The cost of implementing a solution can easily be assumed by such organizations which
are rich in manpower and able to more easily bear the cost. In contrast, while SMBs
might identify with the problems that this SIS study detailed, they have been unable or
unwilling to attempt any resolutions because of simple technical inability or financial
cost. Besides, most SMB owners or managers are simply too busy performing the
primary functions of the business to worry too much about UC, VoIP or any other
alphabet soup solution.

So What is UC Anyway?

So what makes UC something that SMBs should care about? While defined above,
UC has become the latest technology buzzword and all the tech companies have jumped
on the bandwagon. Why not? CIO’s are seeing documentable and significant increases
in worker productivity and a strong ROI within a year of implementation of such a
system.10 Benefits such as quicker response to sales leads and a streamlined sales
process, increased productivity through real time interaction and employee mobility, and
an increase in collaboration and idea-sharing make UC adoption seem like an easy
decision.11 But what does UC mean in the “real world,” away from technical jargon and
hyperbole? Here’s a case study that illustrates the power of UC in an SMB world.

Kroma Makeup went from using plain old telephone service lines
supplemented by cable Internet access to running all its voice, data and Internet
traffic over an integrated T-1, saving money and using unified communications to
improve sales.
The Maitland, Fla.-based company has expanded its consulting business by
using video conferencing to advise clients on what shades of cosmetics they need
and it has improved its batting average converting prospects into customers using

9
Id.
10
“CIO’s jump on the UC Bandwagon,” Communication News, June 2008.
http://www.comnews.com/features/2008_june/0608_trends.aspx

11
Id.
3
 Web conferencing to weed out unlikely buyers and focus on
hot prospects, says Kroma CEO Chris Tillett.
Communications costs have dropped from $12 per day per POTS line plus
cable modem access to $60 per month for the T-1 service that carries all of the
firm's traffic. Because the gear used is more consolidated, power costs have
dipped 10% as well.
The company used to mail out brochures and free samples to people who
expressed an interest in retailing its custom, natural cosmetics. That cost $4,000
to $10,000 per month with just one in 10 prospects ever filing an order. Now the
company walks prospects through the product line via a 15-minute WebEx
conference, during which they hear the business pitch as well as learn about
technical aspects of the products themselves, Tillett says. The give and take at
these meetings provides Tillett a much better sense of how serious the retailers
are in selling Kroma products. Those who seem serious prove it by paying $20 to
have a sample kit shipped to them, he says, and the company keeps much fewer
printed brochures on hand as well.
Tillett's wife, Lee, conducts virtual consultations with individuals who use
Kroma products via video over WebEx. For example, she can look at a client's
images and determine what color foundation makeup they need. She can also
teach makeup lessons the same way, expanding the client base she can readily
address. Kroma installed a Cisco UC 520 system that blends call processing,
voice mail, auto attendant and remote monitoring. It also includes a firewall/VPN,
wireless access point and an eight-port power over Ethernet switch.   Workers use
both IP Communicator softphones as well as Cisco IP handsets to make calls.
With the gear, Tillet has configured voice mail to be sent to his e-mail
account so he can pull it up and listen to it from his iPhone or anyplace he can
access the Internet. With IP Communicator, Tillett can receive calls wherever he is
connected to the Internet via a single phone number. The company uses Session
Initiation Protocol (SIP) trunking from its carrier Flowroute to receive inbound
calls to the Kroma IP phone system, and it is a beta customer of Skype for SIP,
using the service to make outbound calls, Tillett says. 12

The above illustration details a small business that takes the technological leap via
a capital expenditure for equipment and a willingness to spend more money on experts
to help them set it up. The solution that Kroma chose is simply not a system that the
business owner can set up themselves. The Cisco solution illustrated is described as a
system that a “reasonably skilled administrator or VARs will be able to get running
quickly.”13 So what can a small or medium sized business do if it lacks the technological
capability and can’t afford to go out and hire it?

12
Tim Greene, “Unified Communications making a cosmetics firm look good,” NetworkWorld. December 17, 2009.
http://www.networkworld.com/news/2009/121709-kroma-makeup-uc.html

13
“Product Analysis: Cisco Small Business Communication System,” Network Computing, August 10, 2007.
http://www.networkcomputing.com/wireless/product-analysis-cisco-small-business-communications-system.php

4
Tomorrow’s Forecast: Clouds

The concept of cloud computing – hardware, software, and other IT needs

supplied via the Internet on a subscription basis – is quickly becoming the technology
that is allowing SMBs to finally adopt IP Telephony. 14 The theory of cloud computing
(also commonly known as “hosted services” or “Software as a Service” – SaaS”) has
been around in telecom for decades, but it was known by a completely different name –
Centrex. Centrex was invented in the mid-1960s to replace large PBX systems. 15 The
phone company used its own central office equipment to switch calls instead of a
premise-based PBX to the job.16 Because there was a limited need for telecom
equipment on site and literally no need for a company to have its own
telecommunications expertise, Centrex was the one of the first enumerations of cloud
computing.17 With a low capex requirement, Centrex was greatly scalable, had a low risk
of ownership because obsolescence was the problem of the phone company provider,
and allowed the business enterprise to link separate locations easily. 18 The problems
with Centrex are that there has always been a cost question (Centrex has been
traditionally distance-from-the-Central Office oriented) and a lack of control as the
feature capabilities are determined by the phone company and the state regulators. 19

Today’s new cloud computing takes the inherent advantages of Centrex,

maximizes them, and virtually eliminates the disadvantages. Most of all, a VoIP solution
is cheaper in and of itself as compared to traditional Centrex and offers much greater
user flexibility.20 This has led Central Office-based Centrex services, in a “can’t beat
them, join them” move, to rebrand and restyle itself as “IP Centrex,” with the service no

14
Jack Zubarev, “Helping Small Business Use the Cloud,” Sept 2, 2010, Forbes.com.
http://www.forbes.com/2010/09/01/software-small-business-technology-parallels.html?partner=telecom_newsletter

15
“Centrex”, Wikipedia. http://en.wikipedia.org/wiki/Centrex
16

Id.

17
“The Cloud Today,” Conversif.com. January 23, 2010. http://thecloudtoday.blogspot.com/2010/01/cloud-computing-
centrex-they-both-star.html

18
“Chapter 4: Voice Communications Systems: PBX, ACD, Centrex, and KTS,” Doktertomi.com, April 19, 2008.
http://www.doktertomi.com/2008/04/19/chapter-4-voice-communications-systems-pbx-acd-centrex-and-kts-page-nine/

19
Id.

20
Phil Hochmuth, “VoIP converts say good riddance to Centrex,” ComputerWorld, September 20, 2006.
http://www.computerworld.com/s/article/9003487/VoIP_converts_say_good_riddance_to_Centrex

5
longer geographically based in a telecom switching center, but rather in a computer data
center.21

Beyond historical Centrex comparisons, cloud telephony has advantages over the
traditional standard of premise based phone equipment as well, whether it is a PBX or
KTS. The idea of a personalized, customized telephone switchboard in the sky sounds
almost heaven-sent. In many ways, it is. Cloud telephony offers tremendous
advantages for SMBs: (a) lower opex as they don’t demand a lot of user attention or
resource and they don’t need a dedicated IT specialist to set up and maintain it and (b)
lower capex because the amount of equipment needed is limited and therefore very little
capital outlay is necessary.22

So what could UC, in the form of cloud telephony, do for the typical SMB?
Imagine the common small or medium sized business. Maybe they bought a key system
or a small PBX a number of years ago. They probably haven’t given this telecom vehicle
a great deal of thought since shortly after the day it was installed. The chosen system
might have been “feature-rich” when the company purchased it, but they probably use a
fraction of the capabilities now because either no one remembers what the system will
do, or if they know, they don’t know how to get it to do it.

With a cloud-based, UC solution [“CBUCS”] the most obvious advantage would be

that the SMB would actually be receiving a tangible return on its investment. Advanced
feature functionality, such as find-me/follow-me, mobility, presence, uniform messaging,
collaboration, cost effective networking of geographically-disparate offices and click-to-
call (or email or IM) is easily provided. As pointed out previously, such a solution would
not become obsolete or be subject to “rip-and-replace” because the technology is in the
cloud, or “behind the curtain,” and therefore the responsibility of the provider who bears
all such risk. Quite honestly, there is little equipment for the user to replace anyway.
Finally, set up would be simple and maintenance even easier. Even more telling, full
utilization of the service would be ensured by a cloud-based UC solution because the
leaned provider delivers the services that the customer actually needs. For the SMB
user, such advanced telecom technology becomes, like flipping a switch or turning on a
tap, a utility. Or to coin a phrase, telecom technology implemented via a cloud-based
UC solution represents, for the SMB, a “technutility.”

21
Matthew Nickasch, “Strategize 2009: Hosted and Cloud Telephony,” NetworkWorld, January 12, 2009.
http://www.networkworld.com/community/node/37159

22
“Cloud Telephony: The Battle Over SMBs,” Heavy Reading. http://www.heavyreading.com/entvoip/details.asp?
sku_id=2485&skuitem_itemid=1226&promo_code=&aff_code=&next_url=%2Fentvoip%2Fsearch%2Easp%3F

6
 Marketing Technutility to SMBs

Approximately 12% of small businesses and 24% of medium-sized businesses

currently use software as a service.23 However, this number is growing quickly as SMBs,
“companies with less-complex IT needs, legacy applications, and less IT support than
larger enterprises are happy to hand over delivery and operation of IT to third parties,
freeing SMBs to focus on running their business.” 24 In fact, companies with fewer than
250 employees are more than twice as likely as larger companies to adopt subscription
or on-demand technology services.25 This is a huge consideration rate, and the actual
quantity of businesses moving this direction is especially large when one considers the
sheer number of SMBs. So the question of the hour is naturally how any company that
sells UC services present its product to the SMB marketplace?

It’s quite a challenge. SMBs are all around us, but this market is extremely
fractured and direct marketing to them is very difficult – there are so many of them that
it gives them a “can’t see the forest for the all the trees” characteristic. Even though the
SMB is prevalent, they are widely dispersed and the technological concept is new so they
don’t have an established buying pattern. To be successful, technology marketers will
have to segment the SMB marketplace, using a myriad of distribution channels including
“feet on the street,” value added resellers, outbound telemarketing, and online portals. 26
Nevertheless, there are some possibilities for selling the idea of technutility that CBUCs
provide:

A. The traditional telecom service providers. Eighty percent of SMBs purchase

Internet access and 65% purchase local and long-distance telephone service
from cable and telephone network companies. 27 The majority of these
customers is satisfied with this arrangement and is more likely than not to buy
advanced services from them.28 Surely, this is an obvious edge to the service

23
Susan J. Campbell, “Cloud Hosting Market Expected to Expand as SMBs Look to SaaS Solutions,” Hostway, September 7,
2010. http://www.tmcnet.com/channels/cloud-hosting/articles/100048-cloud-hosting-market-expected-expand-as-
smbs-look.htm

24
Stuart Taylor, Andy Young, and James Macaulay, “Small Business Ride The Cloud: SMB Cloud Watch – U. S. Survey
Results. Cisco (whitepaper). February, 2010.
http://www.cisco.com/web/about/ac79/docs/pov/SMB_Cloud_Watch_FINAL_FINAL_021810.pdf

25
Id.

26
Michele Pelino, “Five Keys To SMB Telecom Service Marketing Success,” Forrester Research, August 30, 2007.
http://www.forrester.com/rb/Research/five_keys_to_smb_telecom_service_marketing/q/id/43025/t/2

27
Id.

28
“Small Business Ride the Cloud,” at page 8.

7
 providers and those companies that provide outsourced
services to them. However, for a new company providing CBUCS, the market
is quickly approaching a saturation point because most telecom service
providers already have arrangements to provide their own “home-grown”
services or have made arrangements to offload the provisions to these services
to other outside firms. Quite simply the large players stifle smaller companies
to enter the market by their greater scale, resources, and price flexibility. 29

B. Selling through value added resellers (VARs). “Feet on the street” is important
in any sales effort and IT service VARs are already out there. 30 But, like any
salesperson, VARs are interested, first and foremost, in prospects and
customers that offer economy of scale – accounts that offer the most money.
In contrast, the fragmented SMB marketplace is full of “a whole bunch of
small” accounts and therefore has been largely ignored by VARs. However,
this trend is shifting as the SMB market awakens. Eighty percent of small IT
VARs have already sold a VoIP solution and practically every VAR has an
interest in this marketplace.31 The challenge with VARs, and for that matter,
any independent company that is working in agency, is that you can never be
certain of their allegiance.

C. Build your own sales force. Independent sales agents, like VARs, can be a cost
effective method to getting a product to the street.32 This cost savings comes
with a cost – you lose a good deal of control over the agent, you can never
gain unwavering allegiance, and if you terminate their contract, they might
take your clients with them. 33 Building your own sales force obviously
overcomes these shortcomings – but at a price. Hiring, training, and equipping
your sales force

costs time and money. If they fail to produce, it hurts your business in two
ways – lost revenue inherent in their failure and the cost of having to start
29
Nathan Eddy, “Telecom Service Providers Emerge as Key SMB Cloud Players,” eWeek.com, September 24, 2010.
http://www.eweek.com/c/a/Midmarket/Telecom-Service-Providers-Emerge-as-Key-SMB-Cloud-Players-275241/

30
Alan Earls, “Are value-added resellers (VARs) and SMBs best friend?” SearchSMBStorage.com, July 12, 2010.
http://searchsmbstorage.techtarget.com/news/article/0,289142,sid188_gci1515544,00.html

31
“Small IT VARS Interested in VoIP, SMB Nation Survey Says,” ChannelPartnersConference.com, June 16, 2010.
http://www.channelpartnersconference.com/hotnews/small-it-vars-voip-smb-nation.html

32
“Selling By Independent Agents,” Marketing Resources. http://www.bizmove.com/marketing/m2w.htm

33
Id.

8
 over with someone else. Of course, there are a
number of different “varieties” of a sales force, from the “freemium” model
(where you give product away in order to cross- or up-sales later), no-touch
self-service (think simple website commerce), light-touch, inside sales (add
a inside rep to answer question), high-touch, inside sales (outbound
telemarketing, technical support, multiple calls), and finally field sales reps
(and possibly field sales engineers in support).34 The more complex the
model, the more expensive it is, with the field sales force being
exponentially the most expensive. 35 If the objective is a low cost of
acquisition, putting together your own sales force may not offer the most
cost or time effective method.

D. Establish technology franchises. When most people say the word

“franchise,” they think “fast food.” No doubt, most of the burger joints you
pass every day are franchises. The model is widespread because it provides
common name recognition among the franchisees, is based on a proven
idea, combines and centralizes marketing, provides bulk purchasing power,
and supplies standardized (and proven) training and management. 36
Franchising usually gives exclusive territory rights and might even present
easier financing possibilities. 37 Of course, there are downsides to
franchising – higher possible costs, business restrictions, not to mention
that the franchisor could go out of business or that the product or service
could get a bad reputation.38 Of course, this is not to mention the fact that
franchising entails a contractual relationship between parties that are not
typically in equal bargaining position.39

34
David Skok, “How Sales Complexity Impacts Your Startup’s Viability,” forEntrepreneurs.com, April 1, 2010.
http://www.forentrepreneurs.com/sales-complexity/

35
Id.

36
“Advantages and disadvantages of franchises,” Small Business Bible.
http://www.smallbusinessbible.org/advantages&disadvantages.html

37
“Buy a Franchise,” BusinessLink. http://www.businesslink.gov.uk/bdotg/action/detail?
itemId=1073791408&type=RESOURCES

38
Id.

39
“Advantages and disadvantages…” Id.

9
 Franchising is a popular business model – in practically
everything but technology. There are a number of wireless telecom franchises, 40
computer and IT maintenance franchises, and Internet provider franchises. 41 But, there
are few, if any CBUCS-type franchises. The reason is simple. Until now, the technology
was such that you had to have very specialized knowledge to market the technological
product. Quite simply, you had to be technically inclined and IT trained, therefore not
just anyone could do it. However, this has now changed. With a high-tech service being
supported by the cloud-owner franchiser, why couldn’t the field-sales-franchisee be
turned loose to do the street pounding sales portion of the business? The model seems
to fit perfectly of the idea of a “man/woman and his/her briefcase;” an individual who
would be the face of the technology company to local businesses and who would own
and build a business that would create a continuing and important revenue stream for
the franchiser and franchisee.

If a CBUCS provider were to franchise the model, what would the average
franchisee look like? A study has shown that folks who own franchises are typically
between 35 and 55 years old, be college educated, have some financial ability to
purchase the franchise but might require some outside financing, and becoming from a
career in middle to upper corporate management where stress, career uncertainty, and
lack of advancement has led them to go out on their own. 42 As the franchisor, the
CBUCS provider would obviously provide all the technical know-how, craft a cogent value
message that franchisee’s could utilize, but most importantly, listen to the field
franchisees and build the business together.43

40
“For Entrepreneurs – Franchise Opportunities – Telecom Franchises,” Gaebler.com. http://www.gaebler.com/Telecom-
Franchises.htm

41
“Computer, Internet, and Technology Franchise Opportunities,” Franchise Leader.
http://www.franchiseleader.com/franchise-industry.asp?fcId=6

42
Ken Hollowell, “Who Is the Ideal Franchisee,” kenhollowell.com, http://www.kenhollowell.com/articles/WHO%20IS
%20THE%20IDEAL%20FRANCHISEE.pdf

43
Michael Hemenway, “Qualities to Look for in a Franchisor,” http://www.evancarmichael.com/Franchises/654/Qualities-
to-Look-for-in-a-Franchisor.html

10
 An Undiscovered Country

In 1962, Wal-Mart opened its first store and initially expanded methodically by
utilizing its distribution channel and rural area dominance. 44 It has risen from this
humble beginning to be the largest company in the world. 45

A quarter of all Americans live in rural areas.46 While SMBs have generally missed
the VoIP revolution, rural SMBs have been categorically ignored as they use far less
technology than their urban counterparts do. 47 A full 68% of rural businesses still use
analog telephone lines, which is 30% more than urban businesses. 48 One problem with
rural business obtaining CBUCS-type services has been the lack of broadband, a
necessary requisite. However, this obstacle is being overcome – the overall rural
penetration rate for broadband is now 75%.49 Therefore, for the nascent CBUCS
provider, secondary markets which are represented by more rural America, symbolize a
possible, less-competitive yet viable market. By selling in this “undiscovered country,” a
new provider could gain a foothold in the marketplace using this “hit-them-where-they-
ain’t” strategy.

Utilization of Social Networks

Networking is not new, in fact, the precursors to what we consider social networks
began in the late 1800s.50 It was then that sociologists began to note that interaction
between individuals was greater in ramified, loosely-knit networks rather than formal
groups.51

44
Kenneth Stone, “Impact of the Wal-Mart Phenomenon on Rural Communities,” Iowa State University - Increasing
Understanding of Public Problems and Policies - 1997, Farm Foundation, Chicago, IL.
http://www2.econ.iastate.edu/faculty/stone/10yrstudy.pdf

45
“Global 500,” Fortune, May, 2010.

46
“Advancing Rural America,” United States Small Business Administration.
http://www.sba.gov/advo/research/rural_sb.html

47
“Rural SMBs get VoIP Shaft,” Infixion Media, quoting a Yankee Group study – “RLECs Must Have a Plan to Introduce VoIP
to SMBs or Risk Irrelevance.” http://export.imix.co.za/node/51087

48
Id.

49
“ComScore: Rural Broadband Penetration Rate Growing,” FierceTelecom. August 20, 2009.
http://www.fiercetelecom.com/story/comscore-rural-broadband-penetration-rate-growing/2009-08-20

50
“Social Networking,” Wikipedia. http://en.wikipedia.org/wiki/Social_network

51
Id.

11
 In 2008, 79 million people used a social networking website at
52
least once a month and the number is climbing, the vast majority of users are
“spectators,” who do not create content, but instead consume it. 53 The rise of social
media has led to a sea change in marketing and advertising, as companies adapt from
mass marketing strategies to being adept at “conversations” in smaller, niche and
people-centric activities.54

Selling using social media is different because it is not a “traditional” selling

medium. This explains why it doesn’t work when someone directly pitches their product
to members of their social network.55 It always feels heavy-handed. That is so because
they are using traditional sales methodology in a non-traditional setting – almost always
a disaster. The social media is a listening platform, not a selling platform. 56

It should be used to engage people, grow your network, and give generously. 57
Because social networking is a completely different kind of forum, it demands a
completely different kind of sales process, one which is much more passive and
dependent on the prospect’s knowledge of the product or service to be practically equal
to that of the salesperson.58 In many ways, it resembles a retail model where the idea is
to entice the customer into the store and then to help meet their needs via a sales
clerk.59

It is easy to see that if social media marketing was incorporated into the sales
process of CBUCS, an effective store-front (now known as a website) would be
necessary, that the pervasive attitude would be to educate the prospect, and the
relationship between the sales force and prospect would be personal. It is not hard to
imagine that in this methodology, the concept of traditional, strict geographic territories
for sales people or franchisees would become anachronistic.

Conclusion

52
“eMarketer: U.S. Social Network Users to Grow By 44% by 2013,” Online Daily Media, February 17, 2009.
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100485

53
Matthew Ingram, “On Social Networks, Most Still Just Like to Watch,” quoting a research from Forrester Research,
Gigaom, September 28, 2010. http://gigaom.com/2010/09/28/on-social-networks-most-still-just-like-to-watch/

54
Mike Laurie, “How Social Media Has Changed Us,” Mashable. http://mashable.com/2010/01/07/social-media-changed-
us/

55
“Selling With Social Media. Can You Sell Products Using Social Media Networks,” SenseAble Selling, January 30, 2010.
http://senseableselling.com/selling-with-social-media/

56
Id.

57
Id.
58
“Selling With Social Media,” Id.

59
Id.
12
 SMBs offer a huge opportunity for purveyors of the latest
telecommunications technology. Such businesses are just now awakening to the
benefits that this technology can bring. A cloud-based offering, delivering the
technology from a centralized location that is staffed with technical expertise, is perfect
for companies wishing to reap the promised cost savings and efficiencies without the
huge cost expenditures or time and manpower necessities. However, SMBs demand that
these advantages be brought to them in a way that makes it simple or familiar, after all,
they have a business to run and that business isn’t managing their technology. Quite
literally, SMBs are desirous that this technology be comparable to any commonly used
utility. Therefore, such a solution must possess “technutility.” Even though the telecom
marketplace is filled with giant, well-known companies, a new enterprise could
conceptually become a significant business by offering these technologically advanced
products and services via a franchise business model, a concept that is celebrated in
other industries but not technology. Perhaps too a viable strategy for a brand new
CBUCS provider would be to target more rural areas, using local agents or franchisees –
individuals or companies who have obtained local visibility. It is also possible that a
combination of social networking and direct selling would establish a new business
paradigm is in order. As part of this model, the use of social networking would dictate
that this new-millennial-type business model would be truly service-oriented, customer-
focused, geographically unbounded, yet personal in nature.

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About this White Paper:

Technutility is a telecom and technology consultancy

Headquarters: Atlanta, GA

Author: Michael A. LeBrun,

October 1, 2010 malebrun@gmail.com 678-223-3040

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