Seven Costly Mistakes Businesses Make When Buying Telephone Equipment

"body">found out you needed to get a pacemaker, would
Companies have spent BIG dollars for theyou go out looking for the cheapest one you
telephone equipment that some vendor wantedcould find? Of course not. You would want the
to sell them - not necessarily for what theybest doctor and the best pacemaker money
wanted or needed.could buy.
If you are in the market now or will be soon toYour business telephone system is the heart of
update your telephone equipment this report mayyour business communication to YOUR customers.
contain answers to the questions you need toDon't you value them as much as you do your
know before you make that capital expenditure.health? OK, almost as much. Remember your
Armed with this knowledge you might just savetelephone is the heart of your business.
thousands of dollars.There was a small city government that was
Paying Too Little or Too Muchlooking at two different telephone systems. One
To start with, what should a new telephonewas a cheap system, the other a more
system cost? In general, you should plan onexpensive more reliable system. Of course the
spending somewhere between $450.00 andreliable system was almost twice the price of the
$850.00 per station installed. If you spend lessother cheaper system. When the customer asked
than that, you're probably buying something thatif the vendor offering the cheaper system could
you don't want. Cheap never lasts. The pleasureoffer a 5-year warranty like the more expensive
of low price is often long forgotten after the painsystem she was told that his cheaper system
of poor quality hangs on for many years. If thewould probably have to be replaced in five years.
price is higher, you are probably buying somethingSo the longer warranty was out of the question.
you don't need.Now can you see that the higher priced system is
These numbers do not include specialty add onactually less costly because it would last much
items like caller I.D., paging or voice mail. Thoselonger?
would increase the price. But this should give you"Could you be missing an important part of the
an idea of what you'll be spending. If you thinkequation?"
you're going to buy an 8 phone system for underThere is another part of the telephone equation
$2,000.00 don't fool yourself. If you find someonethat most equipment vendors will never even
to sell it to you, I guarantee you won't be happyaddress. The network side. Let me explain. Lets
because you'll have bought an inexpensive, cheapsay your looking at a telephone system that has
problem waiting to happen.8 telephones. Earlier you heard me say you can
All too often the customer will say " I need 3 linesexpect your telephone equipment to cost you
and 8 phones and the vendor is more than happysomewhere between $450.00 and $850.00 per
to provide a bid of just that. Some will even gostation. If you have an 8-phone system that's a
to the length to fax you your proposal. Why dobottom end figure of about $3600.00 and a top
they work soooooo... hard?end figure of about $6000.00. That's pretty much
If you're in the manufacturing business oragiven. Well if your business has 4 telephone lines
accounting business you probably know thatyou probably spend about $30 to $35 per line or
business very well but how much can you know$140.00 in reoccurring monthly charges on your
about telephones? It's a shame that a business istelephone bill. If you have long distance bill of say
sold what they asked for when that really isn't$125.00 per month that's a total reoccurring
necessarily what they need.monthly bill of $265.00 or $3,180.00 per year. If
So how do you figure out what you need?you think you will keep you telephone system 10
First and most simply ... How many telephones willyears, okay let's be conservative and say 5 years
you need? Start with a floor plan of you facility. Itor 60 months, that means you have a network
can be a simple sketch of the rooms. Don't havecost of $15,900.00.
one? Some businesses have a fire escape plan,Don't you think that the network side of your
which is a good place to start, and it will serve forequation at least deserves a look? Wouldn't it be
this purpose as well. Or you could just draw thata good idea to see if there is anything that can
sketch. It doesn't need to be anything fancy. Justbe done there to reduce some of the monthly
something that shows the different rooms andreoccurring expense? Many vendors won't even
the basic structure of your facility. Now mark thelook at this side of the equation.
location of each phone you will need so you can"Company gets sued because of their telephone
get an accurate count of the number ofsystem"
telephones. Don't forget things like faxes,How could it happen? Isn't it almost always true
modems and credit card terminals. These could bethat if something couldhappen, wouldn't it happen
noted by marking an "F" for fax, "CC" for creditat the most inopportune time?
card terminal or an "M" for modem.A delivery truck looses control and crashes into
Now you know you need "X" number ofyour building. Thankfully no one is hurt but the
telephones and "Y" number of peripheral devisesimpact does two things. The point of impact
(those faxes etc.).causes your power to go off and in the
The next step is to figure out what type ofexcitement of the loud crash a customer in you
telephones you want to have at each location. Tobuilding collapses. You pick up your telephone to
be candid, there are as many different types ofdial 911 to get emergency help and guess what,
telephones as there are type of cars. So how doyour phone doesn't work. If you lose critical time
you get a handle on which type of telephonesthis could result in a liability position for your
you need at each location? You need to identifycompany.
what the job of the telephone is at that spot.You see, at your house the telephones are
"Some basic information on which to base yourpowered by the phone cord plugged into the jack.
decision. "But on a telephone system you basically have a
Does the phone need to show each line on it; orcomputer device that runs the individual
can you get by with one button with all the linestelephones and without electricity your telephones
located under it? This depends on if you need towon't work. Therefore, isn't it critical to have
be able to go to a phone other than the one thatbattery back-up on that system? Battery back-up
was answered to see the lines and take a call offis a way to keep your phones running even when
hold.you don't have electrical power. This is often an
Speaker telephone (this might be used byoverlooked part of a telephone proposal.
someone who would review large or severalOK, my story is a little stretch. So let me ask a
papers while on the phone to keep their handsmore realistic question. If your power goes off
free. Another use may be for a conference roomand a customer calls your business what do they
where multiple people might need to listen or talkhear? Nine out of ten people asked that question
as a group.say; " The customer hears a busy signal." Well,
Does the person use the telephone a lot and needthat does sound like a logical answer but losing
to have a one-touch button on it for otherpower to your telephone system is the equivalent
individuals in the office? If so, how many? Forof unplugging all you phones at home and then
example, an officer of the company might need ahaving some one call you. What would they hear?
phone with a button for his / her secretary that... That's right unending ringing. It would appear to
would enable them to see if that staff memberthem your business is closed. What if they then
was on the line. It would also allow for one touchcalled one of your competitors and made a
access to call that individual. A receptionist wouldpurchase from them? You could lose that
need to have buttons for all the other people socustomer for life. Can you afford to lose even
they could transfer calls with the touch of oneone revenue call due to a short power outage?
button. This might be in the form of a consoleCaution: The Trunker
with many buttons on it, or a manager orThere is yet another area that can be hazardous
executive secretary might need a smaller versionto your telecommunication health. The one-man
of the console with a few extra buttons for ashop or trunker. There are telephone equipment
smaller group of personnel.sales companies that are run totally by one
Is there a phone in a break or storage roomperson. That's right, one person who sells and
where you want a way to communicate but thatinstalls telephone systems. Some of these guys
won't be used a lot? This could be a lessdrive up in their car and operate out of the trunk,
expensive type of telephone. Do you need tothus the term trunker. Their overhead is lower
have a courtesy phone in a lobby or counter areabecause it's just them. If you purchase a bargain
for customers to use?telephone system from a company that is run by
How many telephone lines (telephone numbers)an individual like this, what is your service like if
does your business need? How many outsidesomething happens to him. What if he goes on
telephone calls do you want to have going on atvacation and you need immediate attention? What
once? It's been proven that many businesses areif he's installing a new system for someone else
over lined. If you have 10 telephone lines andand your system goes down? It's mind boggling
really only need 9 that could be costing yourthat a business would risk their communications to
company as much as an extra $400.00 a year.purchase a telephone system from one person.
This is an area that you should discuss at lengthOh you might save a little on the front side, but
with a prospective telephone vendor. One time Ithe loss you could have down the road far out
was designing a telephone system for a doctorway the few pennies you kept. You need the
and she told me she wanted to have five phoneassurance that your service needs will be met if
lines for her new start up business. When I askedsomething happens to your telephones.
her how many people she was starting with sheComparing Apples to Oranges
told me three. "How can three people answer fiveOnce you have all your bids in, how do you
phone lines?" I asked. And that didn't account fordecipher what is what? There are only a few
anyone being with patients. I informed her that ifthings that will relate across from one system to
she had too many lines no one would ever call inthe next. The number of phones and lines is an
and say, "Doctor Smith, you know when I call in Ieasy one. You need to be careful about the
never have any trouble getting through." Peopletypes of phones and what they do. The only
expect their call to be answered. In other wordsother thing that at a glance makes comparing
if she was over lined she would never know. Sheeasy is price and we've already discussed the
would just pay too much month after month.draw back to using that as a major factor. One
However, on the other hand if she didn't havesuggestion is to take your proposals; cover the
enough lines, people would complain about her linesprices up on them and then copy them and let a
always being busy and she could simply add morevendor or two that you trust tell you what the
lines as needed.differences are in the bill of material. A way to
Typically, if I were designing lines for a neweliminate this problem is to hire a consultant to
business the ratio is one line for every two ordraw up a request for proposal. Usually for a
three people. Ten people; five lines. Twentypercentage of the purchase price a set of
people; ten lines. However, that isn't always thestandards can be drawn up so all the vendors are
case. In a factory, most people will be in the shopquoting apples or oranges not both. This fee can
and not need to use the phone. But in abe somewhere between 5 and 10% of the
telemarketing firm almost everyone need to haveawarded bid price. But this can be money well
a line. You can't afford to have staff sittingspent if it keeps you from making a costly
around waiting to use the phone. But these aremistake in the purchase of equipment you will
the exception, not the rule.have to use for years.
Price vs. CostAs you can see there are many areas to
Often a business will use the bottom line price toexamine when getting ready to purchase a
make the final decision. This could be a costlytelephone system for your office. Can you afford
mistake. Let's be realistic. If price is the ultimateto over look any of them? As a matter of fact,
deciding fact, we'd all be driving cheap, unreliable,you should actually go through what is called a
unsafe cars. But you and I know, there are a lottelephone interview with a potential telephone
of fine luxury automobiles sold in this country. Andequipment vendor. Spend time having all your
there is a good reason why.questions answered so you understand exactly
We are all very aware of the massive amount ofwhat it is you need and so will your prospective
information we're bombarded with about thevendors.
importance of taking care of our hearts. So if you