Saturday, April 10. 2010Business Is Business.......John Linton ..........and 'Residential' is just an ongoing 'hat full of problems' - comparatively. As I've undoubtedly mentioned over the past year or so, Exetel began a process of attempting to balance our revenues by building a new business sales operation to put far more emphasis on growing our business customer base. Our logic was pretty simple in that even selling data services at something like 80% less than Telstra and the other dinosaurs charged (and some 30% to 40% less than the smaller data communications providers) we could provide better and just as reliable services to the customer and make far more money than the equivalent revenue from residential customers generated - and still remain 'true' to our corporate objectives of offering equivalent or better services at far less cost than any other provider in the Australian marketplaces. As it becomes increasingly difficult to provide the lowest cost services in the residential marketplaces it becomes more important to look at other marketplaces where Exetel can have a positive impact. We have been providing business SHDSL services since April 2004 and still have three out of our first five business customers some 6 years later and an overall 'churn rate' of less than 1% per annum of business services so we had a very solid network/technical support base to build the growth program on. While we also still have three out of our first five ADSL customers our ADSL churn rate is far higher than our business churn rate though exactly the same network capacities and capabilities are provided to residential users as are provided to business users. The obvious difference is that a business user has a dedicated line that is not subject to the vagaries of the Telstra exchange comings and goings and a business user is, in almost all cases not 'fiddling about' with their router/modem set ups and declaiming that any subsequent problems caused by that are somehow their providers. March marked the first 12 months of our beginning this program and we reached the first mile stone of new business revenue exceeding new ADSL revenue generated in a month for the first time and monthly business revenue reaching 15% of ADSL revenue for the first time. Obviously there is a long way to go before we reach the 50/50 levels we are aiming at but much of the really difficult work in building the sales methodologies and infrastructures has been done over the past year and, if all continues to go well (and that can never be certain) the pace of growth will continue to increase as we now acquire new sales people at a faster rate. This remains the most important of all our initiatives as, even at the lowest prices in the marketplace, business sales generate net profits of 30% compared to ADSL services that barely break even - in a good month they generate around 2% profit after all expenses. Exetel is still meeting its ADSL net growth targets each month but we expect that will continue to become more difficult as 2010 progresses. Our plan to replace any shortfall of ADSL growth at a 2% profit with a similar and now greater revenue growth at 30% profit remains a key stone in our plans to keep Exetel both growing and growing more profitably than in the past - because of the necessity to deal with a stagnating ADSL market place and ever fiercer competitive activities. The enormous up side of such a 'strategy' is referenced in the title of this musing - business customers are far easier to satisfy and keep satisfied and tend to never leave you providing you constantly reduce their costs as we are able to obtain better rates for the components of the services....which we have been able, and willing, to do over the past six years. The key issue now, is can we continue to recruit as effectively as we have in the past and will our methodologies and processes that have been so successful to date continue to work as well as the numbers of people quadruple over the next 18 months or so? I don't know the answer to that question but I have always believed that if you recruit very high quality people and pay them better than any competitor and create a 'vibrant' working environment then you will succeed in meeting whatever realistic sales targets you set. So far so good.
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" 'fiddling about' with their router/modem set ups and declaiming that any subsequent problems caused by that are somehow their providers"
It's my semi tongue in cheek belief that if residential users stopped running speed and ping tests all the time, to "prove" that their ISP is "screwing them over", exchange congestion would be alleviated immensely Comment (1)
Not at all tongue in cheek - the most ridiculous "OMFG" calls are from 14 year olds who haven't got any idea how any part of their own 'network' works - let alone the exchange back haul and other carrier dependencies.
They also don't bother to check the many tools with which they are provided to see what's actually happening on their individual link and other parts of the network. Comments (4)
Hi John
I must admit it is a little sad to think I have passed "Peak Exetel" since I'm in a small town and residential area; but I can see there's a fair bit of consolidation going on. (Peak in the sense that I don't think I'm going to grow again at the speed I did a couple of months ago, although I could be wrong.) In my case, now that TPG's bought out the once-local Chariot and presumably used that investment to justify investing in a DSLAM in Armidale, that's knocked out a significant area for me to operate in and potentially sees me losing 19 customers. (I lost one when he moved from Guyra - or at least I will shortly. In the mean time I am lending him an HSPA router as thanks for the years he's been with us.) HSPA growth seems to be settling down a little in Guyra - but then like when I was the only ISP in Bourke, it's possible I've reached the majority of the interested market. I haven't re-read the contract in detail for a couple of years. Do we agents have specific minimum growth requirements per month? I seem to remember that unlike other ISPs, that was not a requirement for representing Exetel; but it's been 5 years... Finally, in your push to get more business customers; is there anything you'd recommend I (and other agents in my situation) do toward that end? It would seem to me that the only thing I can offer many is VoIP, but I can't do that without proxying it since it's not a service you offer independently. Cheers, Mike. Comments (2)
Mike,
These are difficult times and there will be ongoing issues for a few months yet - probably until the end of this calendar year. Exetel agents have no minimum monthly/quarterly/annual business volumes and we highly value our long term agent just as we do our long term customers (we have 3 of our first ADSL customers who signed up the day we 'opened for business'). We will be putting in place more agent-centric offerings before the end of April to address the changes that are happening in many marketplaces. ....and yes, we will start discussing with you how to address small businesses better and will revamp the business plans and inclusions to help you offer more attractive add ons to business users: DN Hosting Email hosting Web hosting IP phone systems Multiple DIDs VoIP call prices for businesses and some other hardware and 'back office offerings'. as well as some new 'agent only wireless data services aimed at businesses. But we'll have thse discussions in the agent forums when Melanie returns next week. Comments (4)
That all sounds promising
Thanks for this information. Cheers, Mike. Comments (2)
I have had some friends ask me for advice on selecting a new provider for internet.
They are about to move to a new rental property & expect to stay only 6 months. This makes putting a line on and connecting ADSL2 a little expensive. They only use about 1-1.5Gb a month, making them a good candidate for HSDPA. They are currently looking at buying the $99 10Gb/180 day expiry ($0 sim) prepaid package from Dodo & using a different company for VoIP ($5-6/M). Usually Exetel is very competitive, but even with your $0 VoIP I cannot find anything that beats Dodo in this case. I imagine that this type of plan will be even more popular in future as people move to drop landlines. Just thought you should know for a comparison. Comment (1)
Thank you for pointing that out.
Such a price is impossible for Exetel as, assuming your friend used 75% of the 10 gB in six months, Exetel would lose around $100.00 providing the service. Comments (4)
Dodo has to be the worst ISP in Australia. I would advise your friend that price isn't the only factor to consider.
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You should try speak to exetel support. Price definately isnt the only factor to consider
Comment (1)
I do - four times a day, 7 days a week.
I have no problems - if you have problems then you should detail them through an of the channels available to you. This is not one of those channels. I also call Telstra ADSL support twice each day - as Telstra charge twice as much than Exetel it is odd that my average wait time to BigPond support is well over 30 minutes. Comments (4)
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