In this short blog, I am going to cover the effectiveness Purple’s placement in telco deals has on reducing churn and driving additional value.
I had the pleasure of sitting in the office of the CEO of one of the biggest Telco groups in the world, honored of course to be there I was also interested as to why this person had chosen to take that time given the small amounts of revenue that we drove at that point in time.
He told me that fixed-line telephony is dead, which was their primary revenue stream, with the lion’s share now coming from data solutions, but that it is increasingly becoming commoditized. They needed to find the things that de-commoditize (add intrinsic value) to data solution offerings that deliver clear value and competitive advantage.
We’d often thought about specific benefits that we bring to partners such as extending their relationships into new lines of business to build on their existing IT ones – however, the combination of equipment, connectivity, and managed services on greenfield (untapped marketplace) opportunities, as well having a large definable ROI, proved that bringing on our solution helps the wider deal.
The power of this offering is further reflected in the reduction of the telco’s churn. From their own analysis, the partner revealed that customers who had Purple as part of their package had a 50% reduction in churn, and considering the industry average churn rate for IT services is 23%, the potential upside and ROI for a telco is huge.
For instance, if we were to apply those contrasting churn rates to a revenue base of $100 million over a period of 10 years (see relative churn graph below), the cumulative difference in revenue equates to more than $200 million for customers using Purple.
Furthermore, the push for improved ARR (Annual Recurring Revenue), GRR (Gross Revenue Retention), and NRR (Net Revenue Retention) in more traditional businesses is something we strongly align with.
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