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How Are Independent Service Providers Facing the Challenges Ahead?

The last several years have been among the most challenging in global history. Unfortunately, difficulties still lie ahead. One such challenge is what independent communications service providers are facing and what they’ll endure in a market that’s historically had its technology needs met by a broad vendor community. These service providers were often local to their customers, providing a “high touch” relationship that delivered various technologies to meet their customers’ needs. Service providers gave vendors robust routes to markets and provided customers with a more competitive landscape. The availability of competition and choice translated to lower costs and better service that balance out the market, but how is that changing? 

In the past 20 years, there has been substantial consolidation within the service provider and vendor community, driven by private equity and major technology brands seeking a direct relationship with their end users. These transitions have almost guaranteed an arduous road ahead for the independent service provider, but is there a solution?

Fortunately, such solutions exist to overcome these hurdles and that help the residents thrive. Below, we’ll discuss the benefits of a flourishing independent service provider and vendor community and how Crexendo® Powered by NetSapiens™ is a champion of Service Providers.

Service Providers are Choosing to Migrate to Specific Partners

Significant change is upon us – a combination of large technology brands is coming into the marketplace and becoming increasingly visible to end-users. In the past, these organisations relied upon the channel for routes-to-market, but now, they’re creeping into a direct market and pushing service providers into a more professional services arm instead of a “service provider” role. It’s a trend that continues to increase as time goes on. 

End-users are witnessing the increased need for cloud-based voice services and managed services as mobility increases for how they work. While many organisations are demanding their employees return to the office, remote and hybrid work continues to grow at an unprecedented rate. According to a Census report from the UK Government, 80 per cent of workers surveyed in February 2022 who worked from home during the pandemic said they plan to work a hybrid schedule, which speaks to the need for flexible service offerings. These figures are substantial and demonstrate the importance of mobility in the workplace.

Customer Intimacy – a Focus of the Independent Service Provider

Unfortunately, “big” doesn’t always equate to the best outcome. “Big,” such as Microsoft, 8×8, or RingCentral, look for economies of scale, automation, and one size fits all, which is what big tech brings. What gets lost through translation is the intimacy of understanding the customer, tailoring their needs, and higher-touch customer service. A few prominent players seldom bring lower costs; instead, they bring similar costs, while a thriving market with many players brings innovation, value, and price competition.

The Independent Service Providers Need Champions

We believe the service provider provides a valuable addition to the landscape for end-users. When you look at the service provider community make-up, they’re local – they’re high touch, meaning you can see them. They get into the trenches with their customers to better understand the issues they’re facing and help them find pragmatic solutions. They draw upon a wide range of technologies to provide the best possible service outcome. In a rapidly changing world, it’s an invaluable service that larger organisations cannot replicate.

Another issue Service Providers face is that they don’t have the financial resources to invest in research & development to keep up the highest value driven outcomes for end-users. They are invested in as they bring strong cash flow and have accretive upsides when you roll multiple organizations together. However, that dynamic has rapidly shifted. 

Crexendo®’s position is that we’re invisible to the end-user. We’re significant in terms of market share, with close to three million end-users to prove it and support from 220 service providers, who are recognized. It’s not about us, though – it’s about our partners. Our investment and development go into cutting-edge UC solutions that our partners can mould and distribute in their own image, enabling them to break out services into specific packages that suit the needs of their end users. 

Source: Grand View Research

According to Grand View Research, the UC market globally is growing at 18 per cent, which is good. However, Crexendo®’s partners are growing at 40+ per cent. Their belief that their partners are best placed to design and deliver solutions to their customers under their own image is proven in a market where margins are reducing. Crexendo®’s service providers are outperforming their competition handsomely. Why is this happening? It’s because we provide our partners with the proper tools to ensure they can compete with anyone – and the results speak for themselves. 

Consolidation Challenges Will Continue

The pressure caused by consolidation will continue to increase, and more service providers of substantial scale will emerge over the coming years, some reaching multiple hundreds of millions of turnover. Smaller Service Providers will always be more agile and see their focus on service delivery with high touch capability. From a technology standpoint, you’ll see increased investments, interaction with AI tech, and a focus on automated processes. Many resources will be deployed into those areas, including APIs, which are at the forefront of what we do. Crexendo® allows its partners to integrate our technology with other elements the community believes are an excellent value to their end-users. We play well with others, while most of our competitors don’t. 

Service Providers Must Focus on User Experience

If you’re an established Service Provider, you’ve earned a relationship and a position of trust. Organisations realise that end-users are buying from a trusted partner. There’s no reason they can’t put that solution under their brand and tie it into a much more profound and value enhancing relationship. If employees are happy and find their tools highly useful, productivity increases, driving the customer experience even higher. This will improve long-term relationships and help improve margins. The Service Provider also provides a more intimate relationship and has a far more profound understanding of the user experience, something that larger organizations can’t replicate. 

The Recipe for Success Works

Service Providers must stick with what they’re good at – high touch and customer understanding. The organisations’ customers are not tech-savvy and want to be led to the promised land. They’re looking for an organisation they can trust through an ever-changing landscape. These big tech brands do a great job painting grand visions – however, do you ever see anyone in these big brands? It’s unlikely. They don’t even answer your phone calls unless the account is 20 seats or more. Correspondence typically takes place via a bot. Responses are cold and sometimes, not always helpful. Customers are left to fend for themselves, which contradicts their needs. 

In the small-to-medium market, there’s an increasing appreciation for human interactions. When you take your time to understand how their business operates and how we can improve productivity – it’s personal. It’s the complete opposite of “cold” interactions you’ll receive from large tech brands. Big tech seeks to automate where it can, rip out costs, and make generic offerings. It commoditizes relationships, which is an opportunity for independent resellers to act differently.

Pick Vendors Who Help You Deliver the Human Touch

As a Service Provider, it’s critical to understand what makes your business improve. In terms of technology, features and functionality are a given – it’s become far less significant. The primary difference between a “good” service provider and an “average” service provider is that the good ones understand what builds profit within the business. It’s no secret that Crexendo® grows faster than other providers, and neither is the reasoning behind it.

Our model doesn’t charge by seat or function, allowing our partners to develop pricing models for their end users. We also provide our partners with monitoring and tracing tools that enable our customers to solve problems at the point of demand to get them right the first time around. It has nothing to do with features and function – it has everything to do with helping our partners become more profitable. We do this by delivering the necessary tools with 300+ integrations, through the most configurable UCaaS platform on the market. These insight tools provide a deep level of understanding. 

Crexendo® service providers are thriving in this challenging market because we enable our partners to build innovative services for their customers, with control over pricing strategies and giving them an overall better user experience. Moving forward, Crexendo® will continue to be a champion for independent service providers.