Q&A with Mike Griffith Featured in July issue of Independent Cable News

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Essentials for Launching Business Broadband Services

Essentials for Launching Business Broadband Services

Question: To start off, let's discuss the market opportunity that exists today for Tier 2/Tier 3 providers seeking to deliver business broadband services.
Answer: According to Pike & Fischer, today there are between 5 and 6 million small and medium sized businesses (SMBs) in the U.S., that have between 1 and 500 employees. Each of these businesses averages 3-4 phone lines, and they all generally require some combination of data and application services.

Q: What decisions do Tier 2/Tier 3 broadband providers need to make in order to address this market opportunity?
A: The fundamental decisions involve targeting potential business customers, offering differentiated products that attract those customers, and working with the right partners to provide the required levels of service to those customers. Most broadband providers today tend to offer business packages consisting of basic high-speed data service with greater bandwidth than residential service bundled with simple voice products. The future and true revenue opportunity of business broadband services, however, lies in providing advanced business applications. Adding applications not only increases ARPU and profitability, but also decreases churn. That is why applications are such a critical piece of IBBS' commercial services solutions.

Q: What types of differentiated products and services should Tier 2 and Tier 3 providers look to offer?
A: For decades, phone companies could operate profitably by offering basically a single product: voice. But today, the ability to provide a full suite of services and applications that SMBs require is an essential component in launching business broadband services. These services include voice and data; privately-branded email and web hosting; collaboration and mobility applications; virus security and spam control tools; data storage/back-up and disaster recovery services; and a set of network monitoring and management capabilities. IBBS has focused on providing these types of services to broadband providers in a manner that is easy to scale and support.

Q: You just mentioned a number of applications that would be critical to small and medium businesses. Can you discuss in more detail?
A: Security services is a perfect example of something that small and medium businesses should outsource to their local broadband provider, because the process of managing firewalls, detecting intruders, and updating antivirus software must continually evolve to keep up with new threats. Today's online security tools have matured to the point where they're highly sophisticated, and they can be remotely monitored and managed, but the average SMB owner doesn't have the time, knowledge base or resources to stay on top of the latest security tools and enhancements. If their local broadband provider offers security as part of a bundled business offering, the SMB is much more likely to find value in the product. Our view is the company that owns the applications owns the customer. Once a company is using applications and relies on the broadband provider for support, it is time consuming and potentially risky to switch.

Q: Different customers have different needs. So what's the best way for broadband providers to package and deliver all of these capabilities to their business customers?
A: The "Managed Services" model is vital for any broadband provider attacking the SMB market. Typical SMB owners do not want to incur the expense of hiring and training the technical staff, nor are they interested in maintaining their own 24/7 on-call support. So by out- sourcing these items to their broadband provider SMB owners are able to free up resources that are better allocated to their core line of business. Managed services offerings also facilitate recurring revenue for the broadband provider, and they offer the means to up-sell additional services over time, as customers' needs evolve, their budgets increase, and their comfort level with the provider increases.

Q: Is price still a primary selling point?
A: A recent survey conducted by Bredin Business Information (BBI), found that the most important purchase criterion in today's economy is high value (61.3%) followed by low price (52.4%) and reliability (35.3%). Least important is having a personal relationship with the vendor (6%) or buying from a leading brand (1.9%). So, while price is a key selling point, winning the customer is more about providing value - customers will pay if their needs are being addressed. This means that a broadband provider's sales and marketing resources should be involved early to understand local markets and competition, develop the value proposition, and create messaging that effectively communicates the value. Broadband providers can deliver the value that customers seek by packaging the combination of services their SMB customers require to run their businesses. Since IBBS supports more than 230 broadband providers, we can support the economies of scale that Tier 2 and Tier 3 providers need to successfully compete and turn profits in today's competitive market space.

Q: You've laid out a number of essentials thus far. What haven't we covered?
A: We often hear from broadband providers that 'you only get one chance to serve a business well.' Consequently, a critical element for launching business broadband services is comprehensive customer care and support. In the business broadband space, robust customer support can be a competitive advantage. To ensure success, broadband providers should employ a software platform that facilitates broadband and voice service provisioning, real-time network diagnostics and reporting, CSR decision support, and integrated trouble ticketing and dispatch support. This technology will allow broadband providers to immediately respond to the needs of their customers and play a key role in increasing customer satisfaction and customer loyalty. It is also vital to operate a 24/7 call center to support managed solutions, with prioritized technical support for business broadband customers. To summarize, the essentials for launching broadband business services include: engaging early with sales and marketing; delivering a full set of applications and services in a convenient, managed-services model; positioning the applications to help differentiate value to SMBs and avoid competing on price, and providing comprehensive 24/7 call center support required to address customer issues in a timely manner.

Mike Griffith is the VP and GM of Commercial Services for Integrated Broadband Services (www.ibbs.com).