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Carrier Services
Industry View
How can SMBs effectively invest in technology during a downturn?
Solving business problems with technology creates competitive growth opportunities
by Ken Smith, Qwest
A recent business news story on the recessionary environment reported that "fear" is now running the show in this country. That fear-factor sentiment is pervasive in "doom and gloom" stories that dominate daily U.S. news. Everyone is fearful, and challenges abound for all businesses, including many of the nation's Small and Medium Businesses (SMBs). But with history as a guide, it's important for businesses to attempt to transcend the anxiety and uncertainty, and view a downturn as an opportunity to invest in future success.
With extreme market pressure, every dollar spent is crucial and ROI is at a premium. So, how can SMBs approach this crisis as an opportunity, especially with technology and communications? What can be learned from trends in the SMB technology mindset and emerging SMB services? How can a "partnership" customer experience change how SMBs utilize technology?
Now is the time for SMBs to look at how technology can create competitive advantages and growth opportunities during this economic downturn. Finding the right technology partners to help guide strategic downturn investment is crucial to that effort.
Understanding SMB mindsets
Facing a prolonged downturn, SMBs are still very clear about their views on communications and technology. SMBs look at technology as a critical aspect of their business, and they're hungry for knowledge, expertise and guidance in how to use technology in smart ways. They recognize that technology has forever altered the business ecosystem and there is no going back, even in a challenging period of economic upheaval.
Recessions have a way of forcing businesses to focus on priorities and think about what really matters. Even in a cost-cutting environment, SMBs are recognizing that technology should be a priority based on its indelible impact on their business outcomes. Through our proprietary SMB research at Qwest and experience in talking to SMB customers, some interesting trends1 involving SMB views on technology emerged:
Communication services are "VITAL": SMBs say connectivity is "vital" to their business. This year, SMBs generally intend to cut overall spending, and may reduce some tech expenditures, but they'd prefer not to cut "communications" spending because it's simply too vital.
Speed is king: SMBs refuse to sacrifice Internet connection speed to save money, citing the critical role "speed" plays in operating the business and effectively sharing information with customers, employees and stakeholders.
Quality and reliability: SMBs refuse to sacrifice communications quality and reliability to save on costs, again signaling the importance of connectivity. Also, SMBs note that their customer experience plays a big role in how they "perceive" quality and reliability.
Long-term partnerships: SMBs reward service providers for service quality and reliability, but also for acting more like partners than vendors. They crave stability, wanting assurance that providers can weather tough times and have the financial strength to partner with them over the long-term.
Consultation is appreciated: SMBs understand that the tech landscape is complicated and the latest developments are virtually impossible to follow. So, they want advice on how to be smart with technology, both from tech partners and their colleagues.
What are the tech opportunities in a downturn?
Building on the general SMB tech mindset, we are also talking to SMBs about everyday technology use and how emerging tech trends may affect their business. In a tough economy, how can emerging services fuel growth?
Many SMBs are saying, "Hey, we are not tech experts, and we need help to cut through all this noise." SMBs want their core connectivity, but they also want counsel on how they can best optimize technology. If tech partners provide that extra level of consultative service in matching the right technologies to the right business models, they'll be able to help SMBs better position themselves for post-recession growth. And SMBs will reward them with loyalty.
As SMBs look to "invest to win" during a downturn, many different trends — and potential opportunities — make up a complex technology landscape, which then drives their desire to get more consultative advice. Examples of some of the growing and emerging SMB tech trends include:
Connectivity & Mobility: SMBs know connectivity and mobility are important, but these areas change rapidly and are affected by convergence, complexity and multiple factors, including bandwidth needs, locations, convergence, wireless/remote access, costs, etc. Who needs access to what, when and where? Investing in a plan for connectivity, including an evolution path, is an opportunity to maximize productivity and create consistent experiences across every customer touch point.
Managed Services: Once reserved for large global enterprises, managed services now enable SMBs to do more with less. According to Forrester2, “similar to enterprises, SMBs say that very important reasons for choosing managed services include simplifying operational management and the need for better quality and reliability than could be achieved in-house. However, unlike large enterprises, when it comes to choosing additional managed services beyond raw network services, remote storage and backup solutions are top of mind, with 56 percent of firms interested in purchasing and 20 percent already purchasing. There is similar interest for unified communications and Web conferencing and/or collaboration tools.”
Security & Business Continuity/Disaster Recovery (BCDR): SMBs are focusing more on protecting customer data, which helps guard their company reputation and the bottom line. As government regulations tighten and companies adopt stricter policies, it will be more critical to understand and manage data security. Related to security, BCDR solutions are growing as businesses backup and secure data, while ensuring continuous operations. Some SMBs are even increasing security spending right now, as they mitigate risks to customers and their business.
Other opportunities: SMBs should consider "consolidation" of their services, as voice and data integration, IP services and managed services provide opportunities to reduce providers and cut costs. Consolidation also provides increased efficiency and functionality. Additionally, "Software as a Service" (SaaS) is an emerging opportunity for SMBs to utilize and access applications in new ways, including applications that have historically been cost-prohibitive and deemed "enterprise only."
SMB customer experience
As we look at trends, it's also important to examine the impact customer experience can have on how SMBs utilize technology. SMBs are seeking a specific customer experience, and when they find a true partnership with providers, they are more apt to take advantage of tech solutions that will impact growth. SMBs want:
• A listen-first mentality from communications providers
• Consistent, proactive and tailored customer service, not just a call-center approach
• Consultative recommendations that are grounded in ongoing support and continuing education
• Solutions that make sense for their individual businesses, not just "one-solution-fits- all"
• Control over services and visibility into the performance of those services
• Flexibility and trust in a partner with the financial stability to help them grow long term
• Business partners that meet and exceed current needs, and anticipate future needs
Clearly, many different elements make up the customer experience that SMBs seek, but the partnership theme stands out. The customer experience can positively or negatively impact how technology is used for business success, regardless of the service or solution, so partnering with the right providers is crucial.
A good case in point is SMB product "bundling." These offerings are generally intended to help SMBs consolidate services and create efficiencies, and research shows that most SMBs would consider bundling. However, according to Forrester Research’s study The State of SMB Networks And Telecommunications: 2008, “nearly 25 percent of SMBs don't understand how to purchase bundles.”
Consultative advice and education would help in that regard so that SMBs understand all the opportunities available to them and can make smart technology decisions. A bundled solution without clear counsel from a partner becomes one more shadow in the already murky water of technology. A bundled solution with clear, strategic advice, ongoing customer service and attention to business goals becomes a "positive" customer experience — one that will no doubt lead to long-term partnership.
In addition to tailored solutions and helpful consultation, SMBs also want more education assistance. They are looking for providers to supply experts, materials, background, research, webinars, online tools and other methods to keep them informed of the latest trends. Providing these tools, improves the customer experience.
The same goes for the visibility and control that SMBs have over their own services. Many SMBs want more control and transparency, meaning more robust online tracking and management tools, real-time data and enhanced visibility. Providers that stay ahead of that curve will improve their chances of having long-term partnerships with their SMB customers.
Listening to evolving customer experience needs is an ongoing process, for sure, but it creates great opportunities to become better partners and provide better services to SMBs. As a brief example, Qwest’s Customer Account Managers (CAM) group — a group dedicated to SMBs — is charged with constant improvement to keep pace with changing needs for customer solutions, service and support.
The CAM group's approach is an "account ownership" model that evolves with many of the customer experiences detailed above, including dedicated, consistent service representatives, consultative advice, tailored solutions, etc. In general, both providers and SMBs benefit from listening to each other and collaborating to create positive customer experiences over time.
The brief examples above are merely illustrative, but they help paint a picture of a partnership approach to the SMB customer experience. The partnership customer experience is the wrap that brings together all the key technology trends and insights discussed above. Partnership gives SMBs the peace of mind and the tools to unlock their own potential. Ultimately, with fewer vendors and the right partners, SMBs can embrace the downturn as an opportunity to improve communications, utilize smart technology deployments and set themselves up for sustained growth by the time the next "R word" rolls around — recovery.
1. Source: Qwest Mid-Market & SB IDIs, PSB, Dec. 2008.
2. Source: The State Of SMB Networks and Telecommunications: 2008, Forrester Research, Inc., July 2008.p>
Ken Smith serves as Vice President of Qwest’s Business Markets Group and explores top communications and technology priorities for small-and medium-sized businesses nationwide. He can be reached at ken.h.Smith@qwest.com.
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