Study: Advice Up, Sales Down for Wireless Services

Over the next three years, the gap between how much influence a solution provider wields over customer decisions about which wireless carrier to go with, and how many of those customers actually buy the wireless services through the solution provider, will widen significantly, according to a study by Compass Intelligence, a industry analyst firm and consultancy based in the Netherlands. The study is based on a survey of more than 1,600 businesses, according to Compass.

Today, business customers ask solution providers for advice on wireless voice and data services about 35 percent of the time. That number is expected to rise to 38 percent in the next three years, survey results said.

During that same time, however, the number of businesses that said they will employ a solution provider to broker a wireless purchase will plummet. Today, about 27 percent of businesses surveyed said they buy wireless voice solutions through a solution provider, a number that will drop to only 9 percent in the next three years, according to the survey.

This phenomenon is real, said Ramsey Dellinger, president of LanCom Technologies, a Hickory, N.C., solution provider with in-house telecom expertise. For every 10 customers Dellinger gives wireless advice to, only about three actually have LanCom fulfill an order, he said. "It depends on the customer, and our relationship with them, but mostly we only get about 30 percent of the wireless business we consult on," he said.

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The growing influence that solution providers, application consultants, vertical industry consultants and group buying organizations have on the wireless decisions of their customers means wireless carriers could be missing out on revenue by not better influencing the influencers, explained Kneko Burney, president and chief strategist at Compass Intelligence.

If channel partners have customers' ears when it comes to wireless solutions, but don't necessarily sell them anything, wireless carriers need to come up with a better way to educate and compensate their partners to peddle influence for their products, Burney said.

A Verizon Wireless spokesperson indicated that the carrier had no changes planned to its existing partner programs in light of the survey findings. Verizon Wireless is equipped to handle any type of business customer durectly, the spokesperson said.

Business customers feel more comfortable going direct to a wireless carrier for their needs, said Abhi Ingle, vice president of data solution consulting at Cingular, San Antonio. Wireless business solutions are complex, and unless solution providers clearly know their niche in the broad wireless market, and already work closely with a wireless carrier, just reselling connectivity can be difficult, he said.

Other forces are at work that make it difficult for solution providers to broker wireless deals for their customers, said Rob Pennoyer, lead consultant at the GG Group, an SMB-centric solution provider and MSP in New York.

"Ninety percent of the time clients ask us for advice on wireless. But it's become a company policy around here now to not enter into a purchase agreement for a customer because it's so difficult to deal with the major carriers," said Pennoyer. "If I call Sprint on behalf of a business customer, we're just another customer to them, not someone who can bring them more business."

LanCom's Dellinger said that the complexity of the wireless market, coupled with the effectiveness of wireless carriers to sell directly, makes many solution providers wary of brokering wireless contracts. "What a lot of resellers have done is stay back. They don't want to get burned, so they'll make recommendations but stay out of the thick of things," he said.