How to Reduce Your Telecom Costs
Understand your traffic patterns and what you spend better than they do., Package your services into something that you can explain to the carrier market in their terms., Identify the minimum level of service that is required to meet the needs of...
Step-by-Step Guide
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Step 1: Understand your traffic patterns and what you spend better than they do.
Many people rely on their carrier to tell them what to do.
This is ill-advised and reflects laziness on the part of the person making the determination.
Given the choice, a telecom carrier will always sell you a gold plated Mercedes, whether you need it or not, on a 50 year lease, which only increases in cost every year, that you can never get rid of, even after the wheels have long fallen off.
Don't fall for this trap.
You make the rules.
It's your money! -
Step 2: Package your services into something that you can explain to the carrier market in their terms.
Measure service by origination, type, distance, and per unit expense.
Roll it all up from perfect granularity to absolute 100,000 foot (30,480.0 m) level. , This doesn't mean cheap, it means that the combination of services you buy should exactly meet your needs, being neither greater than, or less than your needs.
You don't need to pay for widgets you can't use, and you don't want your users to go without services which are critical to the success of your business. , For instance, it doesn't matter if XYZ carrier has nationwide service to major cities, if your main city is not on their list.
Get market comps from reliable sources.
The carriers may be telling you the best rate is a nickel, while other may be paying a penny, and they will never enlighten you beyond that which they need to.
Other top performing end users probably have the best rate information, which you can informally exchange.
Be sure not to just look at the leading rates that are generally followed, but look at the entire list of services.
Recognize that the largest companies with the highest volume do not necessarily pay the best rates.
They often suffer from ossified contracts that have been carried forward after far too many "good guy deals" have been cut.
Carriers will always be quick to cite others who are paying more money than you are.
Don't worry, they only cite the higher ones, keeping the ones getting a good deal private. , Even if its just a single circuit.
The more the better.
Don't invite carriers who you wouldn't seriously consider giving business to, which is called using "stalking horses." If you do this, the market won't respect you.
Don't give any one carrier any advantage that every other carrier is not getting.
Make it fair.
Use a level playing field.
Make everyone compete using the same information, released at the same time, and under the same rules.
Don't give anyone more time than you could perform within.
Open the information from all of the carriers in private, sharing it with the minimum number of internal people required to do the work.
The more people that know of your internal influences, the more they will share it with the market, and not to your benefit. , Your incumbent carrier will use excuse after excuse to slow down the process.
Why should they help you speed the process which will only result in their having to write down part of the fat profits they are making on your business? This is not a time to get nostalgic.
Set your terms, your timing, and award to the carriers who earn your business.
Not in the past.
In the present.
Once you have tentatively identified a carrier, make sure to come up with a list of 2 or 3 others that can also suffice.
Never tell any carrier what the outcome is until you have your contracts signed.
It's a very small vendor community, and your information will be shared (again to your detriment) if you disclose it before the deal is done. , -
Step 3: Identify the minimum level of service that is required to meet the needs of your organization.
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Step 4: Identify the carriers that provide service in the locations where you originate a need for service.
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Step 5: Invite every carrier to compete for your business that has even the slightest chance of winning your business.
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Step 6: Set the pace.
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Step 7: Measure everything and report your margin of success to your executives to they can understand your performance.
Detailed Guide
Many people rely on their carrier to tell them what to do.
This is ill-advised and reflects laziness on the part of the person making the determination.
Given the choice, a telecom carrier will always sell you a gold plated Mercedes, whether you need it or not, on a 50 year lease, which only increases in cost every year, that you can never get rid of, even after the wheels have long fallen off.
Don't fall for this trap.
You make the rules.
It's your money!
Measure service by origination, type, distance, and per unit expense.
Roll it all up from perfect granularity to absolute 100,000 foot (30,480.0 m) level. , This doesn't mean cheap, it means that the combination of services you buy should exactly meet your needs, being neither greater than, or less than your needs.
You don't need to pay for widgets you can't use, and you don't want your users to go without services which are critical to the success of your business. , For instance, it doesn't matter if XYZ carrier has nationwide service to major cities, if your main city is not on their list.
Get market comps from reliable sources.
The carriers may be telling you the best rate is a nickel, while other may be paying a penny, and they will never enlighten you beyond that which they need to.
Other top performing end users probably have the best rate information, which you can informally exchange.
Be sure not to just look at the leading rates that are generally followed, but look at the entire list of services.
Recognize that the largest companies with the highest volume do not necessarily pay the best rates.
They often suffer from ossified contracts that have been carried forward after far too many "good guy deals" have been cut.
Carriers will always be quick to cite others who are paying more money than you are.
Don't worry, they only cite the higher ones, keeping the ones getting a good deal private. , Even if its just a single circuit.
The more the better.
Don't invite carriers who you wouldn't seriously consider giving business to, which is called using "stalking horses." If you do this, the market won't respect you.
Don't give any one carrier any advantage that every other carrier is not getting.
Make it fair.
Use a level playing field.
Make everyone compete using the same information, released at the same time, and under the same rules.
Don't give anyone more time than you could perform within.
Open the information from all of the carriers in private, sharing it with the minimum number of internal people required to do the work.
The more people that know of your internal influences, the more they will share it with the market, and not to your benefit. , Your incumbent carrier will use excuse after excuse to slow down the process.
Why should they help you speed the process which will only result in their having to write down part of the fat profits they are making on your business? This is not a time to get nostalgic.
Set your terms, your timing, and award to the carriers who earn your business.
Not in the past.
In the present.
Once you have tentatively identified a carrier, make sure to come up with a list of 2 or 3 others that can also suffice.
Never tell any carrier what the outcome is until you have your contracts signed.
It's a very small vendor community, and your information will be shared (again to your detriment) if you disclose it before the deal is done. ,
About the Author
Matthew Evans
Committed to making lifestyle accessible and understandable for everyone.
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