Are these Taxes on my Phone Bill Legit???

I recently did analysis on a Phone Bill for a client. The client has a "Hosted" IP system so they basically pay a Monthly License fee per user. Most providers in this space offer Plans that are Bronze/Silver/Gold or Basic/Executive/Enhanced Plans based on Feature-set. The more Features a user requires the higher the Plan monthly cost. Easy!!! 

I did a recent analysis of a Phone Bill and the customer was being charged $18.47 in taxes, per user based on a charge of $32.99 per user or 56% ($18.47/$32.99).

First, let me say, I am a fan of Hosted VoIP. I love the idea of paying a fixed fee for users as they come into my business. There are numerous reasons why this is appealing but I will not get into that here as it is not the purpose of this blog.

The purpose of this Blog is to alert users of a fee called "Regulatory Recovery Fee". Here is a description of what is says on the actual Phone Bill:

" Regulatory Recovery Fee - We collect and retain this fee to recover some of the costs we incur to comply with local, state and federal governmental mandates and programs, including, but not limited to, E911, local number portability and number pooling. We may impose the fee whether or not the benefits of any or all of these mandates and programs are available to you in your location."      

I have seen this on other Phone Bills.  The “Regulatory Recovery Fee” is NOT required and is a completely arbitrary fee imposed by the Vendor. On the Phone Bill reviewed there were approximately 12 items listed as a Tax for a total user cost of $18.49. The Regulatory Recovery Fee was $10.47 or 57% ($10.47/$18.49) of the total Taxes. Fairly significant.

When evaluating Hosted Voice Services, the “Regulatory Recovery Fee” should be disclosed as it is arbitrary as to what the provider might charge. It is very important when analyzing the different providers as it is a significant portion of the overall cost. If the Regulatory Recovery Fee is not included in the evaluation, the final decision or outcome might be based on faulty information.

LME Consulting has over 30 years experience of Telecom and Datacom evaluation, implementation, and management of various projects. If your company needs assistance in this area, contact us at rich@lmeconsulting.net.

Characteristics of Transaction Sales Professionals verse Solution Sales Professionals

From a Customer perspective their is always a degree of risk with any purchase but it varies significantly. The Table below displays a Risk Matrix I developed to give some examples of Business risk. There are many others:

Low Risk	High Risk
Little Financial Commitment	Significant Financial Commitment
No additional Resources are required	Additional Resources are required
Little Change in Business Process	Significant Change in Business Process
Little visibility of change	Very visible change
Short implementation cycle	Long implementation cycle
Decision is not political	Decision is very political
People will not get fired	Career impacting decision

Just because a salesperson is successful at selling low-risk product does not mean they can be successful selling to customers who are buying a high-risk product.

I have noticed that salespeople who sell a product with low-risk share different traits than those who sell high-risk product. Spin Selling by Neil Rackham, does a great job of explaining why this occurs.

Successful sales people who sell low risk products and services are very transactional and exhibit these characteristics:

1.      Always available

2.      High energy

3.      Very transaction oriented

4.      Has all the information in their head

5.      Is able to create a sense of urgency

6.      Able to quickly close business

As risk increases, successful salespeople exhibit different characteristics and sometimes those characteristics are just the opposite of salespeople who sell low-risk products and services. Some of their characteristics include:

1.      Ask more questions to gain insight into the business

2.      Multiple meetings and follow-up to explore different options

3.      Relationship-oriented verse transaction oriented.

4.      Manage and coordinate people and process

5.      Instill trust that they will get the job done

Spin Selling even suggests that salespeople who sell higher-risk solutions will actually be less effective if it is perceived they have some of the traits of a transactional salesperson. Mostly, don’t try and close to quickly.

Typically, salespeople who sell products and services with greater risks earn more; however, transactional salespeople are needed within the organization to sell transactional items. Inside salespeople come to mind. I think for organizations to be successful, they need to align the proper resource to support customers.