ComTech Systems out of Gaithersburg, MD, accomplished the goal of selling 250 FreedomIQ seats; a challenge set by FreedomVoice during the 2011 TAG National Convention. Scott Hobbs, President of ComTech Systems, tells us how they did it.
Tell us about ComTech Systems.
ComTech has been around for 25 years. My brother and I are partners running the company. We’re located just outside of Washington D.C. in Maryland. The markets that we handle are predominantly in the Washington D.C. metropolitan area. We have been in the Voice Arena, though in the last few years we have taken on the IT side for supporting small to medium sized business. We’ve been selling VoIP premise-based equipment for 5-7 years now.
We understood that we really needed to get reoccurring revenue to maintain and help us grow. One of the problems in our industry is the profit margins are shrinking and the ability to gain income after the sale to a client has shrunk. When it was premise-based equipment and they needed someone to work on it, we were the ones they called. Now, everyone is somewhat self-sufficient. We were also looking at a way we could make a profit selling to really small businesses. So with the reoccurring revenue, we could see how we could make money on a ten phone account. We’ve since grown beyond that; that was our entrée. Now we have 25-30 phone accounts. It’s something we now have much confidence in, and we’re selling it as enthusiastically as we sell any other product we have.
We’re a company of about 10 people.
How have you been so successful with FreedomIQ?
We’re now very familiar with the FreedomIQ service offering. As you become more confident with it, it’s easier to sell it. Confidence comes in a couple of ways, confidence with FreedomVoice as a carrier and confidence with their ability to help you through the sales engineering or fixing an installed application that isn’t working well. You gain on that technical side, but also your sales team gains confidence in it. They start to understand it. No matter what we ask them to sell, they migrate towards the things they understand well. They get it. We also are getting more clients who are asking for it.
As companies, they are embracing the concept of cloud computing, and they feel like it’s a perfect migration to go to the voice side as well. We find in the Washington D.C. market, a high percentage of our prospects now are asking for a cloud based solution. Before, a lot of people hadn’t heard about it.
How does being a Tag member help you with your business?
One thing that is paramount with Tag is that they look at the newer technologies and bring lots of quality product choices and let us know why they matter on an economic level including market trends. They are forward looking in that regard. Also, with any major change to a business, there’s a need to figure out how you’re going to take it to market, how you’re going to compensate your people, and all of those things, while they sound easy, are very difficult for any business to change. The concept of selling something where we’re not in control to a client is very unnerving to us. It’s absolutely a service oriented business.
In the case of hosted, it’s a good example where we see it as a complete mind shift. Tag is right there at the forefront helping us through that. Lastly, you should embrace something like Tag because of the training they provide.
What are ComTech’s goals for 2012?
Our goal is to grow in revenues by 60-70 percent over what we did last year. Along with that growth we’re looking to do double what we’re doing today in hosted. That’s our minimal target; I think we can easily accomplish that.
What are your hobbies?
I enjoy golf and amateur photography. I enjoy reading. I find myself reading quite a bit whether it be for the industry or just for enjoyment. I just finished Extremely Loud and Extremely Close. I’m reading now The Greater Journey. One of my passions is early American history. It’s about Americans who go to Paris in the early 1800s because it was a magnet for learning and the arts. That’s where advanced medicine was at the time.
What advice would you give to other partners?
I would tell them that they need to understand the economic value of hosted to you as a company. Also, they need to understand that it is a market trend. In other words, it’s going to become a bigger part of the voice world. If you understand these two things, the last one is easy, which is adapting it into your business model: how to go to market, how to train your people.
They need to understand the strength of the provider because much like they carefully picked a particular premise-based solution, once upon a time, the real core to picking the right provider is understanding the value. I think the value in FreedomIQ is the strength of the company and the years in the industry, the experience. If you’re not careful and you’re just choosing a provider because they’re offered to you, you don’t understand the behind the scenes- how many network operations people do you have, what’s your design- there’s a lot to that they need to understand.
When meeting a potential client, what do you tell them about FreedomIQ?
When I talk to potential clients about hosted, I talk about the fact that it’s the opposite of obsolescence. It’s built into the network for your solution to keep up with things and keep advancing. The cost of ownership is less, so it’s very appealing in that regard. Then also, specifically for FreedomIQ, they go to market with a month-to-month model. You can see that they prove themselves because they don’t lock you in; therefore they have to prove themselves. Those are our primary selling points. We don’t really worry about whether one is more expensive than another provider. If it becomes a price war, we’re willing to walk away.