How To Improve Your Profitability as a VoIP Reseller

In every type of business, profitability is an incredibly important metric. While revenue is an important component of this, it’s ultimately your ability to turn a profit that will determine whether you can stay in business long-term.

According to a report by BDRC Continental, the profitability of UK business has been increasing steadily over time, with around 80% of SMEs reporting a profit in Q4 2016. But with so many things affecting your profit – from your efficiency to pricing – growing a successful, profitable VoIP reseller business isn’t always easy.

At Hostcomm, we closely support members of our VoIP reseller programme to nurture healthy, successful businesses. If you’re already a reseller or considering becoming one, here are a few tips to improve your profitability.

Keep costs low as you grow

Ask any growing business owner – the costs of doing business tend to escalate and bloat over time. That’s why it’s essential to start your VoIP business with a strong focus on efficiency and keeping our outgoings low.

Of course, a VoIP reseller programme helps here by design. With all of the technology, infrastructure and maintenance taken care of by your service provider, you can start selling VoIP with no initial outlay or capital expense. However, as you secure more customers, keeping your costs controlled is essential.

One important area is your in-house expertise. Employing experienced VoIP specialists creates a considerable recurring cost – one that will reduce the profit from your recurring revenue. In addition, with a smaller customer base, you may find this expertise is wasted in the early days of your business.

Ideally, look for a VoIP service provider that’s willing to bolster your expertise early on, with hands-on support for your customers – but also willing to share their knowledge with you, growing your in-house expertise on a budget.

Focus your sales efforts where they count

Beyond keeping your overall costs low, VoIP reseller profits can be increased by carefully managing costs and revenue on a per-sale level. If you take the time to see where your sales efforts generate the most revenue, you can focus more of your attention in that area.

You could target your sales and marketing activity on a specific niche, vertical, or geographic area. This can help you nurture new prospects in the areas or industries where they’re most likely to convert – and where your expenditure is likely to deliver the biggest return.

In addition to profitability, a focused sales and marketing strategy can also help you to stand apart in a crowded VoIP market. Positioning your business as a specialist in a given area is a highly effective unique selling point (USP).

Experiment and find the right pricing

Initially, you’ll be looking for a VoIP reseller programme that comes with a decent margin and competitive end-user pricing. After all, pricing will play a key role in how easily you can sell VoIP to your prospects.

Over time, though, it’s important that you can take more control of your pricing. While your service provider may be an expert in the technology and their own, usually enterprise-level customer base, your growing VoIP business will develop its own customer insights.

As a result, you may be able to increase your prices – and your profit – to suit your specific target audience, niche, or vertical.

Maximise your control over relationships

Finally, your long-term profitability will at least partly be determined by the relationships you build with customers. Unfortunately, some service providers may hold you back by always keeping you at arm’s length from your customers, retaining control over provisioning services as well as billing and supporting your customers.

Each of these customer interactions is an opportunity to connect with your customers and develop a close relationship, improving retention. According to Bain and Co., even a 5% increase in customer retention can increase your profitability by as much as 75%.

Equally importantly, these interactions are also chances to cross-sell, upsell, and drive more revenue per customer. The best service provider will take the burden of customer management for you when you need them to – but be willing to give you increased control as you grow.

The Hostcomm Reseller Programme is designed to help you grow a successful, profitable business.

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