By Ed Lavalette
Why It Matters?
As the leaves begin to turn from green to beautiful fall colors, talk of 2019 begins around many offices. Budgets, staffing, revenue and within each of those areas the main theme is growth potential and continued execution. This is no different for the telecommunications companies, infrastructure providers, or network aggregators – growth is critical. In connectivity, the 3 pillars of growth (and why they matter) for the new year will be a higher level of Participation, smart and purposeful Targeting and thoughtful Pricing to work the right opportunities and to win more deals.
The Telco industry is a shining example of Coopetition, where providers both compete for customers but also cooperate in deals where their own reach isn’t just far enough. Traditionally, participation in the Coopetitive Connectivity Marketplace meant sending out your building list excel file to your carrier relation partners (while they did the same) and hope they think fondly of you when a bid came through their sales system. Today, Participation is still governed by the need to share data but not just on-net list of buildings from last quarter. Today the cornerstone is your Total Addressable Market, which includes your on-net buildings, but also your near-net potential and your off-net partnerships to participate in the corporative portion of the market.
So, when it comes to network footprint, size does matter but so does speed. Getting a list to your business partners monthly is nice, and becoming industry standard, but imagine real-time sharing of data using API’s in your partner network. Now that’s Participation that drives growth.
Ask any sales person what kind of leads they want to work on and you will hear time and time again, ones that lead to deals. This is the basis of Targeting your services toward prospects and locations where you have the greatest opportunity to win. On the competitive side of Coopetition, understanding your potential footprint and what other service providers are available in your state, city, street or in a specific building gives you insight into how competitive a location is as well as who the players are. The other side of the targeting coin is the tenants of the buildings in your footprint. Not all companies are equal in size, need for bandwidth, or appetite for connectivity/networking/cloud services/data warehousing. A 2-dimensional targeting model matters to focus on the right opportunities. Targeting the right deals, you will be in position to grow your business into the right accounts.
Now that you have your Total Addressable Market and Targeted locations, the last great growth driver is how you price your services. The challenge with pricing is we humans would like it to be to one-size fits all but that’s just not the reality of today’s open markets and how physically disparate the United States is as a country. Imaging hyper competitive locations like data centers in Ashburn, VA vs a “big shiny building” in a mid-market city like Boulder, CO. Think how construction costs vary between New York City and rural Nebraska. Trying to build a pricing model using a Peanut Butter approach (that is the same price everywhere) will only lead to a 3-pronged effect on deals – sometimes your right, sometimes your too high and sometimes you are minimizing margins. Right sizing your price book is critical to winning more deals and to maximize the margins on those deals.
Creating a price book that covers all the needed dimensions for your business is a daunting task. Considering connectivity, competition, geography, services, speeds and terms can lead to a very complex price for your on-net and near-net buildings. But for those who are willing to take on the pricing beast, you will be rewarded with more profitable growth into the new year.
2019 and the 3-Pillars
With 2 month’s left in 2018, there is still time to develop your total addressable market for maximum Participation, review your footprint for precision Targeting and develop a multi-dimensional Pricing model to win more deals in 2019. In the coming weeks, we will dive deeper into each pillar looking at industry trends, best practices and projected outcomes.