UNIVERGE BLUE Podcast with Bruce Gibbs of ServiceMark Telecom

Kansas City Royals, 2015 World Champions

Topics covered in this podcast:

  • Communications moving into the Cloud
  • Major differences in quality/reliability between VoIP services providers
  • The impact of Google Fiber on Kansas City businesses

Podcast

Transcript of the Podcast

Tony

Good morning. This is Tony Graham with UNIVERGE BLUE Business Cloud Services by NEC. This morning I’m here with Bruce Gibbs, President of ServiceMark Telecom in Kansas City. ServiceMark is a certified UNIVERGE BLUE Lighthouse Associate, so his representatives have been specially trained, he understands the product in-depth, and we’re looking for insights. Good morning, Bruce.

Bruce

Good morning.

Tony

Can you tell me a little bit about ServiceMark’s history and its place in the Kansas City business community?

Bruce

Sure, and Tony, thanks as well for the conversation here this morning. I’ve personally been in the telephone system business in Kansas City since 1981. ServiceMark was formed in 1995, and I was the first employee, but I was not the founder of ServiceMark.

Larry Stewart was the founder of ServiceMark. Larry was an example of generosity both locally and nationally. Larry was known for random acts of kindness, and for years he was Kansas City’s secret Santa. He gave away $100 bills to people in need at Christmas time. Larry passed away in 2007, but his legacy continues to this day.

A bit more about ServiceMark. We’re an exclusive NEC Associate. For many years we’ve been recognized as an NEC Double Diamond Associate. Recently we were selected to be a Lighthouse Associate for UNIVERGE BLUE Business Cloud Services by NEC. And a couple of years ago we also received an international NEC Sales, Marketing, and Leadership Award. As I understand it, these awards are given to only about 10 winners internationally.

And on a personal note, I received word that we won the award immediately after my wife and I arrived home, after we were miraculously survived a car wreck, and my wife was in a wheelchair for a couple of months. And it was in that year that our small company continued to grow for reasons that were beyond me. And in particular, ServiceMark employees had my back at a time when I was focused on caring for my wife.

Tony

It sounds like ServiceMark is very much a family-oriented business with quite extensive ties into the community.

Bruce

Interesting you would say this. We do refer to ourselves as a family. Steve Palermo made some comments at our 20th anniversary party when we celebrated 20 years in business. He recognized we were a family. I think he said, “We’re like a family that gets along.” So that’s very much the case with ServiceMark.

Tony

So with all your ties into the community there in Kansas City, cloud communications have been around for a few years now, but what interest level or deployment trends are you seeing in Kansas City?

Bruce

Well, in Kansas City, I see cloud deployments for the smallest of customers. Some of these customers too small to invest in an on-premises business telephone system. But I might also add that we have replaced a lot of non-NEC cloud phone systems solutions with on-premises phone systems from NEC. I think this is a result because many times there’s poor call quality in a cloud solution, there can be a lack of functionality. I think some of it stems from poor planning and poor implementation by the cloud provider.

I might also add that ServiceMark’s specific market in Kansas City is for customers that can benefit and see the benefits of how ServiceMark plans, prepares, installs, trains and supports our customers. I think that a successful deployment of a phone system solution, whether it’s in the cloud or on-premises, begins with good planning. And we have a team of people that plans, prepares and executes the plan extremely well. If we’re in the game competing, we rarely lose the sale of an on-premises phone system to a competing cloud provider.

We’re well known in Kansas City and our website is easily found for people searching for a business phone system provider in Kansas City. But we’re concerned about what opportunities we’re missing because we’re not even in the game for people that are specifically searching for cloud.

We want to be a part of the conversation with customers that sincerely want to explore both cloud and on-premises solutions, and to really determine what’s best for their business.

Up to this point, we’re not known or easily found as a cloud provider of business phone systems. However, I think this is changing rapidly as our video and content opens up the conversation about cloud versus on-premises phone systems, and what’s best for some of these business. That’s rapidly gaining recognition as authoritative and meaningful content.

Tony

I know in the last few years, Google Fiber has been deployed in Kansas City. How has that impacted business phone systems, because of that bandwidth that becomes available for even SMBs? Are they out there looking for a cloud-based business phone system?

Bruce

Well, I think Google Fiber in Kansas City very well may be a game changer. We need to look at it that way. Kansas City was the first metropolitan area chosen by Google Fiber to offer this abundant bandwidth at very low cost. The build-out of Google Fiber, it’s still a work in progress. The rollout to our business customers is gradual, but we have already seen customers utilize Google Fiber as a means of connectivity to cloud phone system solutions, and as a means of connectivity of SIP trunks to NEC on-premise telephone systems.

Tony

Can you comment now on why ServiceMark is actually recommending cloud-based business phone systems in addition to traditional on-premises solutions? It sounds like some of your customers are looking for it. Is it a combination of Google and changing technology that’s made you embrace cloud as a viable option?

Bruce

Well, simply stated, we’re now offering cloud-based phone systems, because UNIVERGE BLUE cloud phone systems from NEC satisfies several key objections that we’ve had to other cloud offerings. We’ve dealt with a lot objections to the cloud in general, but I’m just going to mention a couple of objections that we’ve had, and how those objections have been satisfied with NEC.

My first objection is, ServiceMark’s history is installing reliable NEC phone systems. The phone service that works almost 99.999% of the time. And we’re concerned about poor quality over best-effort internet connections. Always crazy, we want to this service to actually work after we install it. Generally speaking, voice over IP cloud providers don’t even want to talk about quality of connections.

An example, prior to this podcast, I did a Google search of cloud versus on-premises phone systems. And after reviewing the nine articles that appeared first in my Google Search, there was only a brief mention buried in one of those articles even questioning the quality of internet connections to the cloud. The rest of the articles, it’s nonexistent to open up the conversation about quality. It seems to me, there is such a lack of conversation of quality that it doesn’t even seem responsible. Other providers are so quick to sell it and gobble up market share, without even doing their due diligence to determine if the service will actually work over the customer’s internet service.

Now, NEC’s concern for quality is very different from what I’m seeing from other providers. NEC won’t even proceed with the installation of a cloud phone system unless we install a diagnostic tool at the customer’s location to measure the quality of a customer’s internet service as a means of connectivity to NEC’s cloud-based telephone system. This is drastically different from what I’m seeing with the rest of the industry.

Tony

So this diagnostic tool actually sees if there’s a connection, whatever the business’s connection to the internet is, be it Google Fiber or some other provider, it checks to see if it’s a viable connection that can provide that five-nines (99.999%) quality of service?

Bruce

Yes, it does more than just a quick check. Here’s what we do. We install a diagnostic tool that NEC provides at the customer’s location. We leave it there for a week or two. And in the most simplistic of terms, it goes out and just makes test calls to NEC’s cloud phone service. We get a report and are able to see what the call quality would be.

For an example, with a recent customer we just signed up for NEC cloud services. Over a week and a half time period, we saw there was one call that might have had a little bit of a garbled conversation. It wouldn’t have been bad, but only 1 call out of about 500 test calls. That’s the type of diagnostic tool that we install. Once again, I’m not seeing that of other cloud providers. They want to quickly go ahead and just install the service, yet the casualties of unhappy customers are just totally unacceptable, generally speaking in the industry.

Tony

So in addition to a failure to measure the quality of an internet connection prior to putting in a cloud-based phone system, what other things are you seeing that made you hesitant?

Bruce

Well, here’s another objection that I had to overcome. Generally speaking amongst cloud providers of telephone system solutions, there is a very high churn rate of unhappy customers that try the cloud and leave the cloud. Generally speaking, the churn rate of unhappy customers that try the cloud is not acceptable. We’ve talked with many of them first hand when ServiceMark replaced their failed cloud experiment. In contrast, NEC has had no churn of any customers that have installed a cloud phone system solution using NEC cloud services.

Tony

That’s a nice point. It’s an important point if I’m a small business owner. It does bring up another question I had. What is the relationship between ServiceMark Telecom and NEC? It sounds like a long term partnership that existed way before cloud even hit the horizon.

Bruce

It has. There’s a long history here between ServiceMark and NEC. Officially we’re an NEC associate with credentials reserved for just a small percentage of NEC associates, Double Diamond associate. We’re the recipient of the International Leadership award that I mentioned previously, and we were fortunate to be selected as a Lighthouse Associate for UNIVERGE BLUE Business Cloud Services.

The word “partnership” is reserved for a small percentage of relationships. There is a meaningful business partnership between ServiceMark and NEC that has stood the test of time. I might add that one of the best decisions we ever made was to become an exclusive NEC associate, striving to be the best at selling and deploying NEC products, as opposed to spreading ourselves too thin and doing too many things.

Tony

So what do your customers see when they’re contracting with you or speaking to you? How does that partnership appear to them? What do they experience when they look at a new NEC phone system, be it cloud or on-premise?

Bruce

Well here in Kansas City, ServiceMark customers experience the installation of tangible hardware and software from NEC that has stood the test of time. And ServiceMark customers experience a local vendor that will do their due diligence to plan and set proper expectations, and execute the plan. So the first day of a phone system installation actually looks easy and it’s enjoyable.

Tony

So basically as a local provider, you’re taking all of those assets of a global company, but you’re bringing it down to a small business owner, or a medium-sized business, or IT department, and putting a human face on the deployment and actually being there to troubleshoot any issues that might arise.

Bruce

Very well put. I couldn’t say it better myself.

Tony

Okay. I just want to make sure I had the proper image in my head and a proper profile. Given that, I know what press releases say, and I know what various articles might say, but how important is customer satisfaction for a company like ServiceMark, and NEC for that matter?

Bruce

Well, I think it’s extremely important to both ServiceMark and NEC. I’ve mentioned several times about how important it is for us to plan and prepare prior to the installation of a phone system. If, for whatever reason, we’re not in a position to plan the project well, it’s so important for us to have customer satisfaction, that if we can’t plan it well, I think we’d probably prefer not to do the project. That’s how serious we take it.

The relationship between ServiceMark and NEC has always been good, even great. However, my admiration for NEC reached another level whenever I attended meetings at NEC’s corporate office in Dallas related to NEC cloud phone system solutions. I learned that there was zero churn of NEC cloud customers. Or to put it another way, there are no customers that have tried NEC cloud phone systems that have quit the cloud.

It seems to me that NEC’s culture simply won’t tolerate any unhappy customers. And furthermore, happy cloud customers are more important to NEC than gobbling up market share fast at the expense of other unhappy customers, which is what we see as a general trend among cloud phone system providers.

Tony

Is it safe to say that among the cloud providers, you’re seeing a lot of the same kind of attitude as we saw with cell phones 15 years ago where it was, “Just get accounts no matter what and don’t worry about any long-term satisfaction?”

Bruce

I think there is a parallel there, yes. I think the comparison is valid.

Tony

That leads me to my next question. I remember cell phone networks when they first were going in, and I remember a lot of dissatisfaction. I remember everything being sunshine and roses and puppies when you were signing up and getting started. And when everything was going smoothly, it was great. But as soon as you had any kind of problem – a very, very wide array of customer support and satisfaction. Can you give me any examples of how ServiceMark and NEC have worked together to overcome a problem or an issue one of your customers might have been experiencing?

Bruce

Well, no matter how hard we all try, and I talked about how ServiceMark plans and prepares and things like that, we do our best, but sometimes things don’t always go as planned, no matter how hard you try. And when things don’t go well, then you’re able to see what people and corporations are made of.

There was a recent example. It was just a couple of weeks after I went to the meeting about cloud services at NEC’s corporate office. This was mid-November. ServiceMark completed the installation of an NEC SP9100 telephone system for a complex that has a very unique call center environment of about 50 people. Fifty people, that may not be a big corporation, but at the same time, that’s a good-sized call center that’s taking a lot of calls. Everything worked great for about four days, then the phone system seemed to randomly lock up. Within a few days, the problem was escalated to Japan. An escalation to Japan only has happened one other time in ServiceMark history, and immediately I’m thinking, “This is not good.”

I then quickly learned that the sense of urgency we felt here in Kansas City, both ServiceMark and our customer, was not only felt at NEC headquarters in Dallas, but it was felt across the globe. Together, ServiceMark and NEC thought we had resolution to this problem. However, within a few days we discovered that we had not resolved the problem. When we discovered that, NEC immediately sent two engineers on-site, had others working to replicate the problem in lab environments both in Dallas and Japan, and within days, we achieved a resolution to firmware problem.

Some thoughts about the partnership between ServiceMark, our customer, and NEC can best be expressed directly from an email I sent to my customer, and at times I’m just going to read directly from portions of that email. This is what I sent to our customer after it was all done”

“NEC has proved a lot to us over the past few weeks. The trust I now have in NEC extends well beyond the individual people that I know. Some of these people I’ve known for 20 years. NEC has now become one of my most admired companies, based on personal experiences, as well as a fair amount of study of admirable corporations that I’ve done over the years.”

I wrote to my customer, “You and I now know that we have people at NEC that we don’t even know, on two continents that have our backs. Also, about a month ago, I was in NEC’s corporate office in Dallas, and I learned that the culture of NEC simply will not tolerate any unhappy customers, even the smallest customers that are on their relatively new cloud offering. They really do care about our two companies.”

Tony

I don’t know where to go from that. That’s a pretty strong endorsement. They sent people out, recreated things in the lab, had people on-site for a 50 seat call center. That’s an impressive level of support. I can see why that made such an impression on you. A lot companies, anything like a 50 seat call center, they would just ignore as not worth their time.

Bruce

Sometimes whenever you’ve worked through struggles together, relationships become stronger. They can go both ways. Whenever you’ve got a problem, and especially if you have a big one, the relationship could go south. Or the relationship could be stronger than ever. And that happened between our company and our customer and NEC in this instance. The relationship between all three of us in this case, that relationship and partnership of trust, reached levels that we would have never had if we had not gone through the problem.

Tony

When we spoke in the past you mentioned a “crawl, walk, run” philosophy that NEC used to approach hosted or cloud telephony, in particular the UNIVERGE BLUE product. Can you describe what you mean by that?

Bruce

Let me give you some background. I was at the Lighthouse dealers’ meeting 1st of November. And the whole time I was thinking that they’re going into this with a “crawl, walk, run” philosophy. I was thinking that, but I wasn’t saying it. I would have gotten those words, they’re not my words. It would be a concept in Jim Collins book; Good to Great. It was one of those characteristics of companies that I admired a lot. What was interesting is people associated with UNIVERGE BLUE said that was their philosophy before I said it. And it was refreshing to hear them say it before I said it.

I would probably sum it up this way. NEC is this huge corporation, with all these enormous resources, and has a history in the telephone industry that dates back to 1899, yet they have this “crawl, walk, run” philosophy in this new arena of cloud phone solutions. They simply won’t gobble up market share at the expense of unhappy customers. The culture of NEC simply will not tolerate any unhappy customers. And furthermore, NEC’s rich history, and their stability, and NEC’s partnership at the local level with companies like ours, like ServiceMark, provides unique strengths that I just don’t see with other cloud phone system offerings.

Tony

It sounds like ServiceMark Telecom has also approached hosted or cloud telephony with a “crawl, walk, run” attitude. Is that an accurate statement?

Bruce

That is accurate, yes. As we have delved deep into the cloud, we see some great possibilities with UNIVERGE BLUE. We see it being a great play for some of our small customers, and it can be cost effective and reliable because, if their internet service is reliable, then they can use this and displace the cost of telephone lines.

The other thing is UNIVERGE BLUE provides some big enterprise-level features that may not be available in a small to medium-sized business telephone system. So, while it is a great play, we’re also seeing that we’re going to be selling NEC on-premises telephone systems for a long time. They’re not going to go away overnight, they’re not going to go away here in Kansas City, just because some might say things like, “Well, everything is going to the cloud.” People in Kansas City want more substance behind why they’re going to do something than that.

So it’s refreshing for us to know that our core business of selling NEC telephone systems that are installed inside some of these buildings, is going to be here for quite some time. But yet at the same time, we can see industry trends to where we have this opportunity to crawl, walk, and then run into the cloud.

Tony

Thank you, Bruce for taking the time to speak with us today. Details about UNIVERGE BLUE Business Cloud Services can always be found at UnivergeBlue.com. If someone has questions about business phone systems in the Kansas City region, be it cloud-based or traditional on-premises phones, what’s the best way to contact ServiceMark Telecom?

Bruce

First and foremost, go to our website at ServiceMark.net. There is a lot of information, I think helpful content, having to do with cloud versus on-premises telephone systems, content related to a recent video that we published that opens up this subject is on our website. In addition, there’s a computer telephony overview that provides some explanation of common configurations, primarily concentrating on on-premises telephone systems. We’ve also produced a lot of helpful, how-to and tips in terms of the operation of NEC business telephone systems on our website as well. So there’s a lot of helpful information on our website at servicemark.net. We always love phone calls at 816-478-2000. And you can also email us at support@servicemark.net.

Tony

Sounds great. Thank you again, Bruce. And thank you for listening. We hope the week is treating everyone well.