New Web sites offer to ease shoppers' search for telephone and related services. Ten CEOs check out six popular sites.
Best of the Web
A hassle. That's what business owners like Paul Frick expect to find when they shop for a telecommunications service by themselves. There's that dizzying maze of possibilities. Providers with names like Startec Global, OneStar, and Qwest offer everything from basic long-distance service to T1 Internet access and Web hosting. Plus, what about crunching the numbers for all those varying rates that presuppose different usage scenarios? And who's to say which service is reliable? "All you get is the high-pressure sales pitch to change carriers," says Frick, alluding to some telecom solicitations.
No wonder TeleBright.com caught Frick's eye. TeleBright is one of several Web sites offering interactive one-stop service to businesspeople shopping for a telecom carrier. "Long distance is a big chunk of our budget," says Frick, who is a partner in Home Front Communications, a public-relations firm based in Washington, D.C. In an E-mail message he sent this past summer, Frick asked TeleBright about the savings he might achieve by switching his long-distance provider. A TeleBright representative analyzed Home Front's long-distance bill and shot back the names of a dozen carriers that could beat the firm's average monthly outlay of $1,000.
"It was a no-brainer," says Frick, who chose a long-distance telephone company that he predicts will save him $500 a month.
Frick is in the vanguard of executives who are going online to shop for telecom services. But if the projections of Forrester Research, a high-tech-research company based in Cambridge, Mass., prove right, he'll soon be part of a new majority. Some 65% of U.S. businesses plan to buy some of their telecom services online by 2002, predicts a recent Forrester report, Buying into Telecom Online. Online sales of telecom services to businesses will amount to $47 billion in 2004, compared with $900 million this year, according to the report.
TeleBright, based in Rockville, Md., and Web sites like it serve as funnels that direct customers to telecom-service providers with which they've formed partnerships. Some sites invite customers to browse online databases that comprise packages of telecom services. (TeleBright falls into that category.) Others, such as Demandline.com, enable buyers to pool their requests with like-minded businesses and obtain customized bids at lower rates. The sites earn fees from the providers when they land customers.
If the sites have a bright future, not all their customers are as pleased as Frick with the results so far. "Only 15% of interviewees purchase telecom services online today ... and those who have tried it, pan it," notes the Forrester report.
To find out which sites were most worthwhile, Inc. asked 10 small-business CEOs to assess six of the most popular ones. The CEOs shopped for long-distance, 800-number, and Internet-access services, basing their evaluations on eight criteria, including such factors as ease of use, variety, and price. The CEOs also indicated which sites they would consider using to help select their own telecom carriers.
The tone of the feedback we got was often skeptical. Many of the CEOs weren't happy with the sites' design. Up-front requests for personal data tended to annoy them, making them wary of proceeding further. "Simplexity's first page requires a Ph.D. to figure out," complained panelist Ron Zemke, president of Performance Research Associates, a training and leadership consulting firm based in Minneapolis. However, once they overcame their initial displeasure with the sites' architecture, most of the CEOs said they had obtained some useful information.
The sites' offerings apparently vary in quality, depending on region. At least that's what the panelists' feedback would suggest. The CEOs who were based on the West Coast had a higher level of satisfaction with what they found for their region, compared with what their counterparts from other regions said about the sites' offerings for their areas. "I very easily got quotes for cell-phone rates and long-distance rates," said Christopher Butler, president of the Performance Engineering Group Inc., a management-consulting business based in Santa Barbara, Calif., referring to Demandline's coverage of western providers. In contrast, Leslie M. Fox, president and CEO of Fox & Associates, a public-relations company based in Chicago, looked at the site's offerings for her region and reported that it had "very limited products to offer."
The following is a site-by-site summary of what caused the 10 CEOs to turn their thumbs up or down.
What it's good for: Learning something more about vendors and their services and getting an idea about the range of rates. In other words, the panelists agreed that the site was a good place to do research.
Don't waste your time if: You live in the Midwest. The site doesn't yet have a broad selection of packages for that market.
What our CEOs had to say: The service didn't offer the complete range of products and providers they needed to make an informed buying decision. "It's appropriate for residential users and very small businesses that don't have ready access to strategic communications-services planning," said one panelist.
What you should know: TeleBright doesn't collect fees for booking business for carriers but takes a percentage of the users' monthly payments. So the company doesn't make a dime till you start paying your bills.
What it's good for: General information about the kinds of services available in a region. None of the CEOs found the selection to be comprehensive enough, but they all thought the site had educational value.
Don't waste your time if: You don't have a lot of patience. The site challenged all the panelists with what they described as a cryptic registration process and unreliable technology.
What our CEOs had to say: They wouldn't go back. The site didn't offer enough options to allow them to make an educated choice, and its design was cumbersome. "Using this site feels like you are signing up for a 10-year hitch with the Marine Corps," said one CEO.
What you should know: Simplexity is a request-for-proposal site that lets you submit anonymous requests for customized bids to a variety of carriers. At the time of the evaluations, the site bundled only long-distance service with calling-card and toll-free services, although it has since introduced wireless, Internet, and data services.
What it's good for: Companies buying large amounts of services. The reviewers agreed that the site doesn't cater to the small-business owner.
Don't waste your time if: You are buying on a small scale, want prices instantly, or want to remain anonymous. Before the site will provide pricing options, it requires shoppers to submit requests for proposals and divulge personal information about themselves.
What our CEOs had to say: Most liked it. Some were intrigued enough to consider investigating the site further. "Even though I didn't actually provide a request for proposal, there are services my company will need in the future, and I will use this site to comparison shop for them," one of the evaluators said.
What you should know: It requires some technical sophistication to negotiate the site, but it can work smoothly for those in the know.
What it's good for: An easy way to shop for telecom services, according to most of our CEOs. However, they also felt the selection wasn't as comprehensive as it could have been.
Don't waste your time if: You don't have the patience to submit requests and wait for responses, or you are buying services on a small scale.
What our CEOs had to say: Opinions were mixed. One of the panelists was intrigued and said that he "will definitely go back and shop for additional services." But another saw no value to the site's offerings and said she was "more comfortable with the traditional way of buying things." Even those who were impressed with the site thought it could improve. "They need to add more services and a wider array of current vendors," said one CEO. "If it stays the same, I don't think it can compete against the more comprehensive sites like Telezoo."
What you should know: This is the only site among those reviewed that offered a host of business-support tools. Demandline markets end-user and network software support, payroll and credit-card processing, equipment leasing, temp staffing, and retirement services -- along with telecom services.
What it's good for: Comparison shopping. Despite the logistical hurdles they encountered, all the CEOs thought the site offered a useful gateway to a variety of packages and carriers being offered in their area.
Don't waste your time if: You're short on patience. Before you can gain access to any packages of information at TelecomSmart.com, you have to go through a rigorous registration process. The technology and length of the questionnaire irked one CEO, who said if he hadn't been doing a site review, he would have quickly moved on.
What our CEOs had to say: Some thought shopping at this site was a better way to buy telecom services than calling the phone company, but one evaluator thought the site's design made it more trouble than it was worth.
What you should know: You can fax a copy of your phone bill to the company, and it promises to E-mail you within 48 hours a list of carriers and packages in your area -- -with pricing suited to your needs.
What it's good for: Buying small telecom packages for home use. Most of our CEOs agreed that this site catered primarily to residential and home-office buyers, and they found little value in it for their own companies.
The consensus was that Essential.com was of limited value. When asked what he would skip at the site, one CEO quipped, "Everything." Yet it received a B- grade overall.
Don't waste your time if: You're buying services for a large business. Although some of the CEOs thought the site was a good way to do quick research, others dismissed it as lacking in options.
What our CEOs had to say: The consensus was that the site was of limited value. "I was unable to find a useful side-by-side comparison as the information was very basic," said one reviewer, who reported being further stymied by a lack of online customer-service response. When asked what he would skip at this site, one CEO quipped, "Everything."
What you should know: Not only can you buy phone and Internet services at the site, but it also offers electricity, natural-gas, propane, and heating-oil services.
The bottom line
TelecomSmart won kudos from our panelists on the grounds that it offered the widest variety of service options and carriers. Demandline and Essential ranked high in accessibility. Telezoo received high marks for its user-friendly format, too, but lost points for inattention to small-business needs. TeleBright scored well in usability but got mostly fair marks in other categories. Simplexity rated low, in part because of its limited selection in certain areas.
Sarah Fister Gale is a freelance writer based in Minneapolis.
The savvy entrepreneur's guide to buying telecom services on the Web
|Would our CEOs go back?||What is the site good for?||Biggest weaknesses|
|www.telebright.com||"No"||Getting an idea about the range of rates||No criteria for sorting what you are learning|
|www.simplexity.com||"No"||General information on services available||The whole thing|
|www.telezoo.com||"No, but I would have my MIS person look at it"||People who are tech savvy||Not good for small businesses|
|www.demandline.com||"Yes. It offers an easy way to shop"||The nuts and bolts of telecommunications shopping||Lacking in sophistication|
|www.telecomsmart.com||"Yes, it was helpful"||Side-by-side comparisons||Long service questionnaire|
|www.essential.com||"No"||Wireless-plan shopping||Unwieldy comparison button|
|Ease of navigation||Ease of use||Variety of services||Flexibility||Help options||Ease of comparison||Pricing||Security||Overall grade|
Michael W. Allen, chairman and CEO, Allen Interactions Inc.
Jennifer Alstad, president, B-Swing Inc.
Bill Belgard, chairman and CEO, Light-Speed Learning Inc.
John Biancini, president and CEO, CIO Partners
Christopher Butler, president, the Performance Engineering Group Inc.
Kevin Daum, CEO, BYDH Inc.
Leslie M. Fox, president and CEO, Fox & Associates Inc.
Alisa Lippincott, owner and president, Brew Ha Ha Inc.
Stu Tanquist, president, Express Learning Inc.
Ron Zemke, president, Performance Research Associates
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