Being recognised as one of the fastest growing technology businesses in the UK for the second year in succession is a big achievement for service provider Channel Telecom, but owner and Managing Director Clifford Norton believes the best is still to come.
When outsiders imagine the telecoms industry, more often than not they probably see an image of a 20-something whippersnapper over-hyping the merits of the latest smartphone. The reality of this established sector is a current contribution of £56.5 billion to the UK economy and an opportunity for remarkable growth. Walk into Channel Telecom's offices, based in the up and coming area of Buckhurst Hill in suburban Essex, and you'll see the real business of telecoms at its best.
A bright open plan office is populated with smartly dressed, dedicated staff, all focused on expanding the company's channel empire. This commitment has meant that the £5 million revenue target Norton set when he opened the business just five years ago was significantly exceeded with over £10 million recorded in 2015. When revenue surpassed £5 million in 2014, the company was thrilled to meet the requirements of entry into the Sunday Times Hiscox TechTrack, a highly regarded recognition it has now received two years running.
As befits its name, Channel Telecom is 'channel only', which means its success hinges on the performance of its partners and the company's 78th placement in the 2016 TechTrack survey is testament to the growth it has achieved and makes Norton a happy man. "If our partners are growing, we are growing. It's as simple as that," he said, which somewhat underplays the effort put into the partner support which sits at the core of Channel's philosophy and rapid growth.
The company is committed to providing everything a partner needs to make more network sales, specifically added value ones, as Norton explains: "I think what differentiates us from other service providers is that we are completely flexible and we want to help our partners build their business by delivering every single service we can to help them.
"We have reseller partners and dealer partners. With the dealers it's all about adding value to their existing business. On the wholesale side, which has grown massively in the last two years, we offer a billing system and a back-up bureau service where we basically take care of everything for the partner. It gives them the opportunity to go out do what they are good at - building customer relationships and selling. Those partner sales have risen exponentially on the back of data lines, particularly Ethernet, which facilitate added value up-selling.
"Over the last three years we have really pushed data connectivity and recently sold a huge amount of Ethernet lines. Once the data connectivity is there and your customers are getting better speeds then that's the time to go back in and offer SIP, Skype for Business, data recovery, business continuity and all of the hosted solutions that customers now want rather than just calls and lines."
With ISDN disappearing by the end of 2020, Norton believes that the opportunities are huge with more flexibility for customers and better margins for resellers. He is also convinced that the path to real prosperity is through package deals or bundling. "It's all about making it as easy as possible for our partners to sell the products we offer," added Norton. "The customer will say 'I want a bundle of seats, a hosted phone, mobile and MS 365 all for one monthly cost'. That's the way the whole market is going. It's a complete price per person model and it's a strategy that is already working for us."
As well as easing the selling process Channel is also helping partners plan or execute their exit paths. "We are looking to buy as many of our partners as possible that would like to sell," explained Norton. "We have got some flexible arrangements whereby if they want to come on board and sell in 18 months we'll give them a pre-buy out now.
"Every partner is different. Some like to sell the base and want to go now, but most want to take all the hassle out of the billing and the cash flow and simply get back to selling. In these cases, we'll buy a percentage, or most, of the business and the owner can stay on and grow by selling our products to customers, bring the profit up and get another multiple in a year to 18 months. This strategy is good for all of us because the partner carries on working with us and makes more money long-term. The customer migrates to Channel slowly and gets a good experience from all the value added products we offer."
The formulas Norton has put in place certainly seem to be attracting resellers to the Channel family. Since 2015 the number of partners on-boarded has increased from 150 to 340, and as Norton confirmed 'they are doing the numbers'. "The recognition we have achieved in the FastTrack 100 is to do with our growth, but it's also judged on profit," he said. "As we are channel only, it's obvious to say that our partners are bringing in the business, but it's a team effort. We don't just give them a rate sheet. It's about giving them constant training, regular webinars, keeping them updated, helping them grow, giving them what I believe to be the best rate, the best products, and then going out to help them sell.
"I am confident that the partnerships we are continuing to develop will secure us an even better position in FastTrack 2017. I have never enjoyed business so much as I do now, and with massive opportunities on the horizon, we will achieve even greater success."•