Excalibur Communications CEO James Phipps must send a shiver down the spines of many a traditional mobile dealer. As far as he is concerned, their time is up.
‘The writing’s on the wall for those that won’t go beyond mobile,’ he warns. ‘All the networks are sending a clear message that they want fewer partners and they only want those prepared to deliver more than mobile and those that want to grow. I foresee a time when there will be only 60 to 70 partners across all networks. Unfortunately a lot of dealers still don’t get it.’
Phipps speaks from experience. The Swindon-based IT and communications company recently pulled out of negotiations to buy a mobile dealer that Phipps considers just didn’t ‘get it.’
He recalls: ‘We were very keen to get a deal but we could not agree on price. Unfortunately there is a general disparity in the market between what many mobile dealers think they are worth and their true value. A lot of companies are in denial. Despite falling revenues and the networks putting downward pressure on commissions, they still think their businesses are worth more than they really are.’
However, this recent experience has not dampened Excalibur’s appetite for acquisition. Phipps says: ‘We are still in the marketplace for acquisitions but we are more than willing to play a waiting game until these companies face reality.’
His waiting game strategy is already paying dividends, with some companies already seeing the light. Phipps reveals that Excalibur is running the rule over a fellow Vodafone Platinum Partner that recently approached it. ‘People are now coming to us that we would have had to chase just 18 months ago. That’s because they have recognised that their business is decreasing in value every month,’ says Phipps.
Organic health benefits
But Excalibur is not all about acquisition, Phipps is keen to point out. Of equal importance is the company’s organic growth strategy, which is based on a major cross-selling drive into Excalibur’s
Phipps explains: ‘We’ve seen a massive upsurge in our margins through cross-selling and upselling. It is certainly cheaper to upsell than to acquire so we are putting a lot of resources and marketing into our existing customers.’
Excalibur has grown its customer base by over 500 over the past year to ‘just shy of 6,000’ through an even split of acquisitive and organic growth. Currently around 10% of its customers take two or more products. ‘We want that level of uptake to increase to 30% of our customers by the end of this year.’ The company recently celebrated getting its first customer to take all ten of its core products. ‘It’s not easy but once you get it right it is easy to scale up,’ he adds.
Excalibur’s customers range from SMEs with between five and 100 employees up to large corporates with more than 5,000 employees. The company is focusing its cross-selling efforts on 750 ‘VIP’ customers. These have the highest ARPUs and hail mainly from the company’s mid-range customer base. Each VIP customer gets the added benefit of a key relationship manager and a dedicated sales support executive, as well as perks such as a next-day exchange
Excalibur is also on a mission to increase its Vodafone One Net sales, which account for nearly 8% of the company’s total revenue, up from 2% last year. Phipps says he is confident the company will double Vodafone One Net sales this year. ‘It is gaining a lot of traction now. These are largely five-year contracts which help to increase our revenue in the long term.’
Excalibur is also boosting staff numbers this year to support its ‘buy and build’ strategy. It plans to take on another 20 staff this year across its sales, acquisition and support teams, raising employee numbers to over 70. This will include at least six new sales staff from Excalibur’s graduate recruitment and training programme.
Author: Carol Millett