This post is brought to you by Nick Medina, VP of Business Development for VoIP Innovations.
Working for North America’s largest Wholesale VoIP Provider, I often get the chance to engage with customers who are excited about launching their new VoIP business. Many times they have bought a switch and are extremely focused on the technical operations of the business. However, when I ask who their target market is, I quite often hear, “We are hoping to signup everyone that needs phone service.” Unfortunately, hope is not a strategy.
“Build it and they will come” is a common motto in technology businesses. But building a better mousetrap is not always enough. As competition increases and barriers to entry are reduced, entrepreneurs need a strategy that guarantees a steady stream of customers. So rather than focusing on the product itself, it is sometimes a better strategy to take a step back and focus on your target market. But how do you determine who your target market is? The most ideal situation is to already have an existing customer base that you can simply start providing a new product or service. But if you are starting from scratch, here are some ideas to get you started.
Part 1: Choosing your Target Market
First, determine if you have access to a niche market and what your method of marketing and sales will be. Your goal is to find a market that has not been bombarded with VoIP services or where you can market more cost effectively than your competitor. Your goal is to reduce your customer acquisition cost. Perhaps you belong to a social group and you believe that you can sign-up 10-20 new customer per month. You could test the market by starting with that one group, and as sign-ups increase, you can expand your marketing to other groups. There are hundreds of niche marketing markets to target. The key is to get as specific as possible and make sure your target has a need for your service.
Once you determine what your niche market will be, the next step is to determine your sales and marketing delivery method. There are hundreds of marketing scenarios that include direct mail, radio, TV, online banners, AdWords, emails, advertising in niche trade journals, door to door sales, tradeshows, cold calling, partnerships with complementary businesses, MLM, agent program, etc. Whether you use one or a combination of any of these marketing techniques, it is important to choose the one that will result in the highest amount of sign-ups for the lowest amount of money. This is why tracking your results is an important part of the process. This information will help you determine the most efficient and most cost efficient marketing program.
The most important advice is to think outside the box when choosing your niche group. The most successful and highest growth companies have been those that have focused on a vertical market and provided features and benefits specifically for that vertical. Sometimes the best vertical is the one you have had experience with.
One such success story is a local ITSP in Phoenix, AZ that decided to focus on delivering Hosted PBX to real estate agents. As a former real estate broker, the owner decided to add unique features that helped brokers keep track of agent phone times, incoming call tracking, time of use, etc. Since most agents are independent contractors, he focused on selling the brokers first, which then resulted in the other agents adopting the system. He also advertised in real estate trade journals geared toward brokers. The result has been steady growth in a niche industry.
Bottom line is that pricing is not the only factor when creating your product. Remember that value is benefits minus cost (Value=Benefits-Cost). Consumers make a decision on services based on Product, Price and Marketing. You don’t need to be the leader in all three in order to be successful in selling VoIP. When VoIP first was introduced, everyone competed on pricing. As the space has become more crowded, it is now all about Product (features and integration). As an entrepreneur, your focus is to find what pain points exist in the market and address them. Remember, the more people you can help, the more successful you will be.
Up next, look for Part 2 of this white paper, which will focus on choosing what VoIP Services to Sell.
Nick Medina is VP of Business Development for VoIP Innovations, an Inc. 5000 company. VoIP Innovation provides wholesale VoIP and Private Label VoIP services to over 1,000 carriers, resellers and service providers across the world. They specialize in providing the largest DID and termination VoIP footprints in North America. Their network includes over 500,000 DIDs in stock in over 8,500 rate centers in the US and Canada. Recently, VoIP Innovations expanded their footprint to include DIDs in over 60 countries and now offers A-Z termination. VoIP Innovations is owned by ABG Capital and is based in Pittsburgh, PA. To learn more about VoIP Innovations, visit them at http://www.VoIPInnovations.com.