How to successfully sell to telecoms operators
By Paul Nolan
The telecoms industry is in a well-documented state of flux. Consolidation, competition and cooperation conspire to create new commercial and technological challenges. Vendors are facing some of the toughest trading conditions ever. It has never been so difficult to ‘sell’ to operators.
It’s not just uncontrollable macro-economic factors that are frustrating vendor sales and marketing efforts. The manner in which operators buy has changed. Increasing complexity, consensus buying, third party consultants and the professionalisation of purchasing are all critical, disruptive trends.
However, many vendors are not changing how they market and sell in response to new operator buying habits. In fact, many vendor sales and marketing efforts are dated and disconnected. Vendors are wasting valuable time, effort and money – but don’t know it, or perhaps worse still, do know it but don’t know how to change.
To address the challenge, we undertook a comprehensive analysis of operator procurement processes, interviewing both operators and their advisors as well as examining market influence studies and media research. The goal was to reveal the communications platforms that drive vendor inclusion in operator procurement, the influencing factors when shortlisting, and the critical factors in vendor selection.
What are the most influential platforms that drive RFX inclusion?
The analysis shows that the most reliable way for vendors to be included in an RFX is to have an existing relationship (direct or via a partner) with that operator. Operators, perhaps unsurprisingly, demonstrated a clear comfort in dealing with those vendors already known to them. A number of operators and consultants also described an informal process of advice gathering and reference checking between operators. The vast importance of peer relationships stresses the importance of industry networking to build and develop important connections. This has given rise to a number of exclusive initiation-only events targeted at business leaders with the power to make purchasing decisions.
Outside of existing supplier and peer relationships, professional analysts are also critical in building influence – both internal business analysts and external industry analysts. Internal analysts have become the eyes and ears of the business units they serve, reading, filtering and sharing knowledge gained through trade media, analyst and vendor research. Industry analysts have also become essential aides for vendors selling to operators – both through report compilation and consultancy services they deliver to operators to help build RFPs and perform due diligence.
Despite rumours to the contrary, industry events are still valued by operator executives when it comes to technology decision making. Media articles are also listed as an important part of the armoury, especially given their influence over the other communications platforms such as internal analysts and tradeshows.
What factors influence operators’ shortlisting of potential suppliers?
Operator executives were asked to rate in importance a series of factors that could influence whether or not vendors were invited to take part in RFXs. Yet again, having a previous relationship and familiarity with the supplier was rated the highest influencing factor.
The reputation and market profile of a vendor was the second most influential factor on RFX selection and shortlisting. Anecdotal conversation suggests that the manner in which this reputation and profile is ‘realised’ is through channels such as media prominence, positioning in analyst reports, award wins and presence on the speaker circuit.
What factors influence which vendor is finally selected?
Price rears its head at decision time – but not as one might expect. Operators (and consultants back this up) are more concerned about value than price. They want to understand costs saved, revenues generated, business models advanced or protected, or opportunities created as a result of a particular vendor’s solution. They want to understand how vendor X enables something bigger, and addresses a real business challenge they face as an operator. Price alone is one of the least influential factors.
The ability of a vendor to prove its capability to deliver is critical. Operators are unwilling to take ‘chances’ on untried and untested vendors and technologies, they are trying to mitigate risks as much as possible. They value references, case studies and third party backing at this stage of the process.
Finally, demonstrating practical vision through a roadmap for future solutions and post-sales support is a critical hygiene factor. Substance – demonstrating value, delivery and understanding are more important at this stage in an RFX process.
How can vendors better engage with telecoms operators?
At a high level, the research reveals that successfully selling to operators depends on the interplay of three primary factors: influence channels, content and messaging:
1. Influence channels: direct, in-person communications platforms, supported by strong indirect platforms, are the most effective for securing involvement in operator procurement exercises
2. Content: a combination of relevant insight and/or new perspectives as well as thought leadership and cost/benefit analysis are critical in demonstrating vendor understanding of operator challenges, and being shortlisted
3. Messaging: demonstrating the vendor’s relevance and uniqueness in a manner that makes it ‘real’ for operators, especially when it comes to decision time
Inertia – the failure to learn these lessons and change current approaches – will limit the success of vendor sales and marketing teams. To combat this inertia, vendors must reset their expectations of how operators buy. They must rethink their approaches to lead generation and sales support and reconnect with their audiences in a more meaningful, powerful way.
To succeed, sales and marketing teams must expect and demand more of each other. Accessing and influencing the operator procurement process is intensely challenging for vendors today – but it can be done extremely effectively. It demands a symbiotic relationship between sales and marketing functions and the integration of various communications to deliver the campaigns that will make the difference.
Paul Nolan is Head of Telecoms at CCgroup. To access a copy of the white paper Click here