John Linton
In November 2008 we looked at what was happening in the residential ADSL marketplaces and saw nothing but future problems. At that time Telstra had begun their 'win back campaigns' and the growth in the ADSL market had reached a point where there was almost no growth in overall numbers and this was only going to get worse as, even at that early stage, wireless broadband was beginning to erode the lower usage customer base. We are, very definitely, not the most well informed of people in terms of fully understanding marketplaces in Australia - we don't have the resources - but even the apocryphal "blind Freddie" could only reach one conclusion regarding the future of the residential ADSL marketplaces - and this was before the 'NBN2' was invented in an attempt to salvage Krudd's election lies. So it was essential to make some sort of changes to our time frames and previous expectations which we did in December of that year.
We had always had the objective of providing services to businesses rather than residential end users when we first set up Exetel in January 2004. That was because of the business backgrounds of two of the three founders and the view that there was a greater 'need' to offer business services that weren't based on the rip off pricing then extant and still extant today. However we realised that a company that was tiny and brand new would not make much of an impression on prospective business and corporate buyers and that it would be much more sensible providing cost/effective services to residential customers first especially if those customers could include a high proportion of IT professionals. In 2008 we had been around for almost five years and over that time had managed to be well enough regarded to have well over 200 business customers - a few quite large. It seemed to us that if we could rapidly accelerate our rate of growth of our business services we would be able to offset the depredations of Telstra Retail and other ISPs that were forced to follow Telstra's downward pricing programs.
So, in March 2009 we hired our first corporate sales trainees and began the process of sales and engineering training that had very ambitious quarterly targets. Over the past two years we have met the majority of those targets and before the end of this month we will achieve our first major mile stone - we will sell 100 business/corporate data links in a single month in the exact month we 'predicted' this would happen. It has taken us two years to reach this milestone but the initiative has 'saved' Exetel from spiraling downwards in revenue and profit terms and has allowed us to continue to grow at a close to 20% revenue rate for the past two very difficult years. In financial terms 100 corporate data link sales deliver the same revenue as 1,000 residential ADSL sales and the profit of over 4,000 residential ADSL sales. So, in very broad terms, we have reached a major mile stone in changing our company to meet the changes that have occurred in the Australian residential marketplaces. Major changes in company directions are never easy and, more than occasionally, prove impossible, so it is a great 'relief' to have undertaken this quite risky strategy and, at least so far, made it work as we planned two years ago. It called for quite a lot of intestinal fortitude and a high percentage of correct decision making.
Assuming that we can sustain the current rates of growth, and assuming we can continue to find the required numbers of very high quality new personnel we have protected Exetel from the slings and arrows of Telstra Retail et alia as new business service revenue/profit now far exceeds the continuing decline in residential revenue/profit. That looks very comforting on the forward business projections but we are making no assumptions about it continuing without constant change on our part. At 100 sales a month we are not on any competitor's "radar" but we are not dumb enough to think that will remain the case if we actually grow to a size where our 'wins' will affect one or more companies capable of doing something about losing their own customer bases. We need to tidy up our plans for such contingencies.
We will hold a mild celebration when the 100th order is received over the next few days (currently on 88) and then move on to the (I am assured) even riskier strategy of fully integrating our Australian and Sri Lankan sales teams to give us 48 business sales people to accelerate the growth we have made happen so far to achieve our next major mile stone of achieving $100,000 of new revenue in a single month which is targeted for later this year - however we have a great deal of innovative work to get done before we can be sure of meeting that objective. It's nice, in these very difficult times, to actually make the 'numbers' you are aiming at and also to get so much pleasure from trying to do new, very difficult things.
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