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Thriving or Surviving? A Day in the Life of a Toshiba Phone Dealer

Jim Moorman on Mar 31, 2014 11:31:00 AM

The life of a Toshiba dealer, or any system dealer, isn’t one that’s typically envied by others in the sales universe. Phone systems are expensive. They last a long time. The sales cycle can sometimes go on for months, and it’s a constant stream of prospecting. Closing, then, is what separates mediocre dealers from great dealers. It also dictates whether you’re thriving or just surviving.Toolbox_framed

Thriving dealers have great toolboxes. They use their wrench to overcome objection ‘x’ and the hammer to overcome objection ‘y.’ Some of their tools might be discounts on the initial purchase, value-added services like maintenance agreements, or ‘x’ number of MAC’s included with the initial purchase. They’re the ones who look at carrier services, LAN cabling, and try to understand the complete solution.

The surviving dealer tries to close as quickly as possible using the fewest number of tools. They will work twice as hard for half as much just to make next month’s rent. They’ll eventually fail, but not before they undercut the market just enough to make life miserable for thriving dealers.

Let’s look at a real world example and the differences between surviving and thriving dealers.

Company X is a professional service firm in downtown Cleveland. They are currently 50 people and growing. They’re using a CIX 100 and want to expand it to add a second floor in their building along with 35 additional extensions. The IT manager is the one in charge of the expansion and reaches out to a few local Toshiba dealers for quotes on the upgrade.

The surviving dealer fires off a quote within 24 hours for the expansion cabinet, additional cards, and offers deep discounts on the parts and labor in hopes of a quick close. Their hope is that a low price and fast turnaround on the quote request will win them the business.

The thriving dealer understands that there are multiple elements at play and wants to better understand the prospect’s motivation and goals. The thriving dealer asks about cabling, additional features the prospect might like, and wants to understand what the current carrier situation looks like. The thriving dealer asks great questions the prospect never even thought to ask. As part of this process, the thriving dealer builds trust with the prospect enough to try and uncover the prospects actual budget for the project.

Meanwhile, the surviving dealer is waiting, calling, leaving voicemails for the decision maker, and after a week of silence, cuts the price even more. The new quote is sent and gives the prospect even more negotiating power with the thriving dealer.

Through thorough questioning, the thriving dealer has uncovered that the prospect is currently paying for the following monthly services:

  • Conferencing service - $150/mo (.089 cents/min)
  • AT&T PRI with 2500 local minutes - $542.25 with an average usage of 3000 minutes
  • AT&T POTS lines and DSL service (for internet backup) - $154.30/mo
  • Matrix Long Distance Service - $270/mo (average 4000 minutes/mo)

Total monthly carrier service cost of $1,116.55

The thriving carrier has also uncovered that the prospect’s budget is approx. $25,000 for the expansion. The thriving dealer doesn’t know that the surviving dealer, with the deep discounting, has already planted the seed in the prospect’s mind that this budget is reasonable. The thriving dealer knows that the cost of cabling alone will be around $5000. Adding 35 phones, an expansion cabinet, cards, and installation will likely have them in the 35-40k range at their most profitable tier. Does he walk away from the opportunity? No. Why? Because he knows that closing is what separates mediocre dealers from great dealers.

The solution is to present a solution. Prospects WILL spend more if they see:

  • Value
  • ROI
  • Justification for the added expense like additional features

So the thriving dealer sat down with his team, an internal sales engineer, a telecom partner, and a cabling partner.

His sales engineer agreed that IP phones were the ideal choice for this expansion as did the cabling contractor. The cabling cost would be cut in half and as luck would have it, the data cabling was being covered by the IT budget, not the telecom budget.

The carrier partner recommended moving to a SIP solution via a dedicated higher bandwidth circuit. The connection would terminate into a gateway which would then deliver the voice to the system as PRI signaling. The virtual PRI would include unlimited local and long distance. They would also be able to offer a much less expensive conferencing service - .04 cents/minute versus the .089 cents currently being paid. They recommended keeping the POTS lines in place, but eliminating the backup DSL as it wouldn’t offer much value in the event of a main line outage.

  • Virtual PRI - $399/mo
  • Pots lines - $76.93
  • Conferencing service - $38.20

Total new MRC = $514.13 – savings of $602.42

Once presented, it was an easy choice for the prospect. The $42,000 quote for the system upgrade, new IP phones, and installation would have seemed astronomical when compared to the surviving dealer’s quote had the thriving dealer not shown the prospect the $602 monthly savings. The thriving dealer used the monthly savings to position attractive lease options to the prospect. He was also able to model an ROI against the average life of the system.

The client ended up signing a 36-month lease with a $1.00 buyout. The thriving dealer knocked 10% off the system to help offset the interest on the lease (another tool). The prospect then had an upgraded system for a few hundred dollars a month more than they were already used to paying.

The thriving dealer made a couple points on the lease, most of his points on the hardware, and all of his points on installation and maintenance.

What happened to the dealer just trying to survive? He was left scratching his head wondering how he could have lost another deal to a competitor charging twice as much as him.

 

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