John Linton
.....surely you would LOVE to do business with us?"
I have a number of acquaintances who work in the finance sector in Sydney with whom I keep in contact on a sporadic basis - almost always when they want a favour in getting a deal on some service Exetel sells for a member of their family or when they want cost information about high end communications lines to get better deals from their large carrier providers (they, of course, could never consider buying the identical services from Exetel although it's the same infrastructure and often the same 'line'!) so I give them our buy prices so that they can see just how badly they are being screwed by the carriers.
Anyone who takes even a cursory interest in the business media would know that many financial institutions are laying off quite a lot of personnel and look likely to lay off even more in the first half of next year. Sad for the people involved but then presumably they saw the financial problems coming before the rest of us and took appropriate measures to provide for their immediate futures.
One thing that has begun to happen is that 2 of the people I know in very conservative financial institutions, who apparently have survived the recent cuts, called me on Friday and for the first time were interested in semi-seriously talking, perhaps, about looking at Exetel to replace their current carriers/service providers for some of their "less vital" circuits. This is such a major departure from their previous attitudes that I didn't know how to respond but the further explanation was that along with the manpower cuts they had been forced to carry out the operational budgets had also been severely cut for the balance of FY2009 with the high probability that the cuts would be even more savage for FY2010.
It would seem that these high and mighty MOTU are beginning to be capable of believing that if Exetel use the same fibre as their current carrier to link their various offices it maybe isn't the brightest of ideas to pay, literally, 6 times more per month to 'rent the same cable'. The two companies combined spends, currently, on their base communications services exceeds $A3 million a year for which a provider, such as Exetel, would have to do bu**** all to earn a 50% margin at a fifth of that price.
So both of them were surprised when I said that while I appreciated the opportunity to 'bid' for their business we wouldn't be doing that. I explained my reasons as being that irrespective of the 'gigantic' cost saving we could achieve for them they would never buy from us because, irrespective of how hard times became there would still be someone in the upper levels of their hierarchy who would veto using an unknown and very small company and would simply use our pricing to get an almost as good deal from their current provider (or their current provider's largest competitor) and we would just be wasting our scarce resources helping them get a discount they were too lazy to get for themselves.
My advice was for both of them to simply call their providers and tell them if they didn't get an 80% discount from January 1st 2009 on their services they would be accepting an offer from another "major" provider to replace all their services. It would save us time and save them time and everyone would be ahead.
Despite how my precis wording of much longer conversations above may read - the conversations were both amiable and very helpful. I have never understood (and this is throughout my career not just recently) why large companies insist on wasting huge amounts of money paying for services from other large and totally inefficient companies because of the 'peace of mind' that comes from buying "key services" from companies best able to address their needs in an emergency.
Exetel spends more money on communications services per month with "large carriers" than all but the very largest companies in Australia and, as I've told various of my acquaintances when this subject is raised, a tiny company like Exetel has more engineering competence and infinitely more dedication than I have ever seen exhibited by any "major" supplier we deal with. However - our engineering and fault resolution capabilities are always regarded as inferior to those of the large carriers and I stopped trying to persuade such people differently a long time ago.
So its interesting; now the Crystal has stopped flowing, at least for most of the employees in the large companies that are suddenly, and belatedly in many cases, realizing that they needn't be as large as they were last month perhaps "small companies" like Exetel will be given the 'privilege' of supplying the identical services these companies currently use at a fraction of the price that is currently being charged without doing too much damage to their "vital" operations.
But we won't be bidding for the sort of 'opportunities' that were offered to me late last week - we're already too busy dealing with the huge surge of large SHDSL and Ethernet business service orders we received in October and November and which we expect to keep coming as far more realistic (and certainly not as large and 'prestigious') companies seem to be able to find our web site and compare our published pricing with what they are currently paying and simply order their "vital and key" services on line without, in many cases, even talking to us let alone expecting us to grovel for the privilege of being allowed to waste our time providing a "full and comprehensive" proposal. One of the two mentioned a full "Powerpoint" presentation FGS!!!
"Jeez".....as Dennis once (in his particular circumstances - mistakenly as it turned out) said -"No wonder you're extinct!"
The 'cold winds' are chillier these days it seems. - at least in the financial district of the Sydney CBD.
....and just for the record Peter....."yes, we really don't accept 90 day payment terms - especially from an organisation in as much financial trouble as yours appears to be".
PS: If anyone runs into Whine Swan - would you mind asking him where the "inflation genie" is at the moment and has he found the "bottle" he apparently mislaid at 2008 budget time?