TAG: It is All in the Audit

Posted:
9/2003

It is All in the Audit
How to Win at Competitive Bids

By Missy Mastel

We all agree there are few new customers
for phone service. About 99 percent of the time, you are competing against
incumbent carriers when you look to sell new business. So how do you let
prospects know you are serious about their businesses and not just about your
commission?

One way to earn a companys trust and its business
is to align yourself with its needs. If its goal is to save money, taking some
simple steps before and during your proposal phase may seal the deal.

1. Express an interest in how your customer uses its
communication services. A physical audit can reveal
overtrunking in my firms experience by at least 10 percent. If you
can work a reduction of lines into your proposal, you can save the prospect
money. Of course, you still want to perform an apples-to-apples comparison, but
your customer will be impressed with your industry. Show a customer how to save
money by decreasing the number of lines, and Ill show you a happy customer.

2. Do a proactive review of the competition.

Why is the competitive-bid situation such a nailbiter? My firm helps customers make the right decision by presenting
all the competitive information. In addition to the information our competitors present, such
as rates and term discounts, we also present information on billing increments
and rate guarantees. Customers always ask how they can save. Even when we do not
suggest switching carriers, we often help negotiate contracts with better
increments, like single-second or stewardship clauses that force the carrier to
match prices with the marketplace once or twice a year. Share this type of
information with your customer. At a minimum, it will spark a heated
conversation between your potential client and your competitors, and you will
come out having shown the prospect that you have its best interests in mind.

3. Take advantage of consistency. Customers
conducting RFPs for phone service generally are happier when they get a true
idea of cost. So, offer a flat rate whenever possible. If you can substitute
network for usage, do it. In addition, avoid services that include automatic yet
arbitrary increases. Some carriers tie their actual rates to published tariffs
or rate sheets published on their Web sites, and can increase rates for all
their customers just by changing that rate sheet. Where you can offer rate security, do it.

4. Explain the savings on a line-item basis.

Almost every analysis that I see from competitive carriers has
the savings calculated as a total number on a monthly basis, but that isnt
the way a company receives or examines its bill after changing carriers. What it
sees is the monthly charges, usage charges and taxes each itemized. Unless
you are expecting very substantial savings from your proposal, itemize the
savings in the same way that a customer will see the charges on the bill. It
gives the customer what they want verifiable savings from the first bill
and invites trust in you.

5. Show that you think outside the box.

Even if your customer is looking for a specific service, you
may have solutions it hasnt considered. One nonprofit, for example, wanted to move its telemarketing
services to another building, but still keep them on its headquarters PRI. We could have set the company up with a wireless equipment
based solution, costing at least $12,000 in capital additions. Instead, we
re-allocated the current network and were able to run cable to meet its needs
for a one-time fee of $1,200 one-tenth the cost.

Another way to take advantage of creative thinking is to note
how your company co-exists with current service providers. For example, if you
are trying to resell local T1s, but the customer has a contract for a dedicated
T1 with its current long-distance carrier, agree to support the current
long-distance carrier on your new local T1. Even though you may not get revenue
for that long-distance usage at first, you will help the customer meet its
commitments that much faster, you will avoid making the customer choose between
a familiar provider and your company and you will be in a better position
when the long-distance contract is exhausted.

Many carriers and resellers are afraid of auditors, mostly
because it is hard to defend against someone who is telling your customer its
being overcharged. If you cant beat us, join us. If you provide both types of
services to your customers, why would they ever go anywhere else?

Missy Mastel, CPA, is the president and founder of Mass Tel
Communications Inc., a telecom outsourcing audit company with headquarters in
San Francisco. Mastel is the author of Telecom Audit (McGraw-Hill, 2003).