I know what you are thinking – what does the telecom industry have in common with one of the largest entertainment companies in the world? It turns out quite a lot. In recent months, Disney has made changes that your competitors have already started to embrace. But before we go into this, let’s go through the main similarities between your company and Disney.
Number one: The Lion King – a true Disney classic, released in 1994, and winner of multiple awards. But the real question is, how on earth did the Lion King 2, a sequel to this classic, make more money for Disney than the original?
Well, this story is similar for all Disney Blockbusters. Disney noticed that they made more money from straight to VHS/DVD sequels than from releasing the original movie. Crazy right? The first film would be released to get the fans on board. They would then be inclined to buy the DVD. Watch and purchase the sequel. And finish off purchasing any merchandise from the movie franchise.
Think in the world of telecoms, before Cloud, remote working and UCaaS, a telephone system would be installed purely to make and receive phone calls. And most of the time, it still is, but the buying pattern was very similar. The customer would pay a one-off fee for the supply and equipment, and they would be tied into a maintenance contract and offered multiple add-on products – this is where they made their real money.
Let say the average telephone system costs £3,000 RRP and you make a 50% profit. If you charged 10% annually in a maintenance contract and that customer paid that until they bought their next system. On average, they would pay you an additional £2,100. And in most cases, nothing goes wrong with a telephone system that’s just used for a dial tone. That means you were charging a customer to swap a few curly cords that likely cost you £1.00.
Hopefully, that customer then rings you up and says: ‘Oh, I have this new staff member that needs a phone’ or ‘I like that jazzy on-hold music, can we have that?’. It is the same as the Disney concept – you would make more money from the follow-up sales than you would the initial sell.
Let’s reiterate our first point – the upfront work is not much, but the ongoing, the ‘direct to video’ sequel is where the real money is at.
Number Two: Technology is advancing. You can now stream any movie you want on the internet by paying a small fee that gives you access to thousands of films. But how did Disney tap into this? They launched Disney+, their own streaming service with original content that people have already seen and paid for years ago but yet they still achieved 94.9 million subscribers (as of Q1 2021) who are now spending £5.99 per month. Overnight they completely flipped their business model from upfront revenue to a monthly recurring revenue model. All because DVD players are a thing of the past.
ISDN is the DVD of the telecoms world. Soon they will be an expensive thing of the past, and now you are flipping people from line-based systems to Cloud with everything included. They pay you monthly for it and get access to all the latest features that a telephone system can offer call recording, music on hold, DDIs, and some ‘seats’ even include minutes. People don’t spend thousands of pounds upfront for this, but instead, pay you £50.00 a month for the privilege. And just like that, you have gone from having cash injection after cash injection to low monthly payments.
Technology has changed how you bill customers.
But what is next? How do you make the most out of your loyal subscribers? Like what Disney has done, you can do the same with your customers by working with Candio.
Disney launched Star on the 23rd of Feb 2021, a new addition to their streaming service that no one asked for – it’s not Disney content, it’s just a few good films and TV series. But in doing so, they have raised the subscription price by £2.00 a month, which does not sound a lot, but it is to Disney. They will earn an additional £196m a month. Ok, some people will cancel and say it is too much now, but only a very small percentage of their customers. The key here is the price increase is justified – the users are now getting more for their £2.00 a month with no contract. If you don’t like it, cancel. Chances are you won’t because Star actually sounds quite good.
So how do you do this? You have xxx ‘loyal’ customers, right?
By partnering with Candio, you can launch either of our services: Website Optimiser or Web Listings, to your loyal customer base on a free 60-day trial. It will automatically improve their online presence, and at the end of the free trial, it automatically turns into a billed service of under £10.00 per month. We have done this 1,000 times with other telecom/technology companies, so we know that roughly only 10% of customers will cancel.
Like Disney did with Star, you are now able to add an additional £10.00 a month to 90% of your customer invoices. Adding £4,500 in monthly revenue, £54,000 annually, 50% profit, and adding £135,000 to your business valuation just by onboarding 500 customer locations.
Don’t have 500 customers? More or less? Head over to our revenue calculator to see how much you can potentially earn.
Disney is late to the party on this – Netflix, Amazon, Xero, and many more have been doing this for years. Learn from Disney and get in touch with a member of the Candio team for more information.
Book some time with Tom in our sales team to find out more about how Web Listings or Website Optimiser can provide an additional recurring revenue stream for your business.
Follow us on social media: LinkedIn, Twitter, YouTube