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Cloud, Biz Networks, Cust Service

TelePacific Talks | October 2013

Up To Date | October 2013
October 2013

9 in 10 Customers Leave After Poor
Customer Service Experience

In our connected and social economy, strong customer service is critical to making a lasting impression and retaining customers in the long run. Indeed, bad customer service will drive away customers faster than a poor product experience, according to data compiled and recently presented in an infographic from

Some of the takeaways:

• It takes 12 positive customer experiences to make up for
  one negative experience.

• A customer is 400 percent more likely to buy from a
  competitor if the problem is service related versus price or
  product related.

• 70 percent of buying experiences are based on how the
  customer feels they are being treated.

• 55 percent of consumers would pay more for a better
  customer experience.

• Dissatisfied customers tell between nine and 15 people
  about their experience.

Take note of that last bullet. Having a superior product or service that can sell itself isn't enough today. With social media, one bad experience — based on reality or perception — can go viral and be very costly. And here's the really eye-opening stat: Some 89 percent of consumers have stopped doing business with a company after experiencing poor customer service.

Moving Past Cloud Adolescence

The cloud has spawned a number of business models for IT solutions providers to work within, from procuring and building cloud architecture to white-labeling and reselling services to managing services and break/fix. And those that have moved the fastest and deepest into a cloud delivery model are seeing the greatest impacts on revenues, show new findings from CompTIA.

According the IT channel trade association, nearly half of IT solutions providers surveyed earlier this year described their cloud business as "mature," while another four in 10 claim to have reached at least a degree of cloud services' maturity alongside their more established lines of business. By contrast, just 13 percent said their current cloud business is not mature at all today, show CompTIA figures.

A new level of maturity also can be seen in the top cloud challenges IT solutions providers now face. In CompTIA surveys from prior years, the number one challenge among IT channel firms was determining the appropriate business model around cloud. For this year's 4th annual survey, the top challenge was developing cloud expertise across both technical and sales arms within the company, "a task that logically follows after the initial business model decision is made," says CompTIA.

And as might be expected, "the maturity of a firm's cloud offerings has a direct correlation to the financial impact they are seeing," according to CompTIA researchers. Among firms that describe their offerings as "not mature," 29 percent saw their cloud revenues growing faster than revenues from established services. But 54 percent of "mature" cloud companies saw faster revenue growth in the cloud. For profit margins, the difference is even more drastic, with 21 percent of "not mature" companies seeing larger profit margins for cloud services when compared to established offerings versus 58 percent of "mature" companies.

Among all IT channel firms surveyed, 50 percent said cloud revenues were growing faster than revenues from established categories, while 49 percent said profit margins for cloud services were higher than margins from established categories.

As far as the cloud services that IT channel firms are selling, a look at CompTIA surveys of what organizations and end users are buying shows that business software as a service and office applications such as email, productivity suites, collaboration and conferencing, continue to account for the lion's share of cloud revenues.

Uptime and the Bottom Line

If your company is similar to most small to mid-sized business today, its employees have experienced the sense of loss and helplessness when a network or important application temporarily "goes down." Even if a company hasn't suffered a total network outage, it's easy to understand how even just email being down for as little as an hour can negatively impact customer service, hamper internal communications or halt a project altogether. Even more stressful is when outages happen right before that important deadline.

While employees must deal with the stress and anxiety of an outage, the company overall feels the bite in the bottom line. According to a recent report from Aberdeen Group, for instance, the average cost of downtime for the typical mid-sized company (with revenues between $50 million and $1 billion) is a whopping $215,638 per hour. For smaller companies with revenue of less than $50 million, the damage is significantly less but still a significant $8,581 per hour of downtime, on average.

Counted as a combination of labor costs and revenues lost, those numbers grow even more daunting when considering that the poorest performing companies of any size, when it comes to business continuity and disaster recovery efforts, averaged 3.92 downtime events during the past 12 months and each event lasted an average of 17.82 hours, show Aberdeen figures. It adds up to nearly $600,000 a year for a small business. Read more

Consumer Devices Using Employer Networks
Will Double In Two Years

Information technology professionals expect the number of personal smart phones and tablets accessing their networks to more than double in the next two years, according to a recent survey by CDW. Looking ahead, nine out of 10 IT professionals expect the growth of personal mobile devices to present a broad set of challenges and have major impacts on their organizations' networks including:

  • Increased bandwidth requirements (63%)
  • Increased server requirements (44%)
  • Increased network latency (39%)
  • Increased storage requirements (37%)

Core messaging functions (email, text, voicemail) are the single most important end user function to be supported, the study concluded. About 48 percent of respondents said core messaging also was important. Accessing organizational data was viewed as key by about 47 percent or survey participants, illustrating the importance of content consumption.

With personal technology putting strain on business networks, it's not surprising that SMBs are increasingly adopting flexible Ethernet solutions to meet their growing bandwidth needs.

Why SMBs Are Increasingly Adopting Ethernet

Over the next five years, the Ethernet services market will grow by a compounded annual growth rate of 19 percent, with the highest growth levels in the next two years, according to a new market research study from The Insight Research Corp. "Ethernet service in the small to mid-sized business market is the fastest growing segment of this market," says Fran Caulfield, Director of Research at Insight.

Ethernet's popularity with SMBs is driven largely by its ability to meet growing bandwidth demands at lower cost and with greater flexibility than legacy TDM-based services. Indeed, 10 Mbps Ethernet over Copper (EoC) is becoming the new T1 access and multiples of that are needed to support businesses with a high reliance on data, voice and video intensive applications.

Fiber broadband access gets all the media publicity, but some 70 percent of U.S. commercial buildings do not have access to a direct fiber connection. And that 70 percent consists mostly of SMBs not located in downtown areas and office park locations running fiber.

This is the reason why TelePacific has invested so heavily in EoC and other Ethernet infrastructure. It essentially democratizes high-speed broadband access for small and midsize organizations.


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