Telstra's SMB arm shifts into gear

Telstra has finished putting together its new dedicated small and medium business (SMB) division, and will make the unit's presence felt with several new product offerings over the next few months. Formally named Telstra Business, the unit's formation was announced in the closing months of 2005, with then boss of Telstra's wholesale division Deena Shiff moving across to take the reins in late January.

Telstra has finished putting together its new dedicated small and medium business (SMB) division, and will make the unit's presence felt with several new product offerings over the next few months.

Formally named Telstra Business, the unit's formation was announced in the closing months of 2005, with then boss of Telstra's wholesale division Deena Shiff moving across to take the reins in late January.

Deena Shiff

"The organisation and the team was complete in July," Shiff told ZDNet Australia in a telephone interview late last week.

Shiff said the unit currently comprised around 1700 people, who had been drawn both from within Telstra and externally. For example, around 600 staff were drawn from Telstra's big business Enterprise and Government division, with a mere 17 coming from the telco's consumer arm.

Telstra Business currently has around a 60 percent share of the AU$5.5 billion to AU$6 billion that SMBs annually spend on telecommunications in Australia.

One of Shiff's tasks over the last eight months has been revamping the way Telstra communicates with SMB-type customers. "Service was a real turn-off, because a large number of customers were being pushed into an anonymous consumer mass channel experience," she said.

"I guess one of the big steps we made was to cut across dedicated call centres, just for Business, in July. So we've got eight centres around Australia now, three for service."

This and other associated moves meant SMB customers who called Telstra were now funnelled directly through to dedicated consultants who understood their needs, according to Shiff.

"It sounds really small, but I think for our customers to have that personalised contact, and have what I call 'a door marked Business' through which they can pass, has been really important to us," she said.

In line with this philosophy, Telstra Business will place emphasis on being able to interact with its customers through one integrated Web portal. The effort is being spearheaded by a former IBM staffer who ran IBM.com for the vendor.

"In December we'll launch a new look Telstra.com/business, and that will not only enable customers to shop and look at the catalogue of goods on offer, but will also provide the full range of services, for example fulfilment and assurance," said Shiff.

Getting the product right
Shiff acknowledged Telstra hadn't always offered the right solutions for the SMB sector. However, her division will now move to right these wrongs.

"A big focus for us has been to put better broadband products in the market for business customers," she said. "We've recognised, and recognised fully, that our enterprise offer was too industrial, and our consumer offer was too light for a lot of businesses. We've left a void for our competitors, which we will now fill."

In the next couple of months Telstra will go to market with integrated offers packaging broadband with associated services such as data backup, e-mail, anti-spam, antivirus and domain name.

"And then what we propose to do after or alongside that is to offer solutions and applications that you can kind of clip on," said Shiff. For example, Telstra Business is working with the telco's directories unit Sensis on an e-commerce package targeted at SMBs.

In July, Shiff oversaw an overhaul of Telstra's business fixed-line telephony subscription pricing, which she described as "one of the biggest changes to business pricing in several years".

Mobility products such as wireless data services were also in current demand in the SMB sector, according to Shiff.

Another initiative is seeing Telstra re-launch its hardware or customer premise equipment (CPE) offerings in conjunction with vendors such as Ericsson, Mitel, Alcatel, Panasonic, NEC and others.

In a speech on Saturday night (September 23), Telstra chief executive officer Sol Trujillo also mentioned the telco was trialling new Telstra Business shopfronts with specially trained Telstra staff devoted to serving business customers.

Getting the mindset right
In the interview, Shiff emphasised the need for her division to work differently from the rest of Telstra in order to meet the unique needs of the SMB sector.

"We didn't just want to bolt bits of Telstra together and do things the same way, we wanted to take advantage of the opportunity to do things differently," she said.

"I think large corporations like banks and telcos find it hard to understand the needs of small business, because they're [small business] heterogeneous, and you're not individually account managing and having a one to one relationship with them."

Accordingly, Telstra Business conducted research under what Trujillo has called the telco's "market-based management program". Shiff only appointed marketing managers for her division when she was confident her unit understood different customer segments within the SMB sector.

In general Shiff likened the atmosphere within Telstra Business to that of a new start-up company.

"Although we're 1700 people now, for the revenues we carry, which is over AU$3 billion, we're not a big retail business unit. So we still feel like a small group, we still kind of feel like we're a start-up, and we want to feel that way because it kind of brings us closer to what our customers feel like," she said.

Shiff said a lot of her staff were motivated by the ability to help Australian SMBs make the jump into organising their business in the online world of the Internet.

"Everyone's working pretty hard [in Telstra Business]," she said. "But it is exciting, because the customer group are so much part of the culture and the economy within Australia, it's very easy to identify with and feel passionate about the needs of the customers that you're serving."