Businesses have long retained independent brokers to help them search out the best deal on insurance, real estate or other vital services.
But when it comes to getting the best telephone connection, many organizations are forced to rely on their sales agent or go it alone.
This fact was not lost on Jim Sauter, who spent 14 years selling phone and Internet service for TDS Telecom.
“I’m not saying everybody is getting ripped off ... but this is a high-churn industry,” he says. “The average telecom sales person lasts about 12 months on the job. It’s very demanding, and if they’re not selling enough they’re out the door.”
So when Sauter was offered a buyout to leave his marketing executive position at TDS in January, he decided to take it.
“TDS was an excellent company to work for and I could have stayed,” he says. “But I didn’t want to wait around for the next reorganization. It was time to do something else.”
Sauter has since done an about-face. Now instead of urging people to spend more on their telecom services he’s telling them how to spend less through his company called NovaONE Networks.
NovaONE, with offices at 7878 Big Sky Drive in Madison, has been characterized as a cross between “Consumer Reports” and “Priceline” for commercial-grade voice, data and Internet services.
To date, NovaONE has worked with dozens of companies and school districts in the Midwest. Sauter maintains the average savings is 31 percent, with customers generally getting faster and better service. He says every customer except one has saved at least 10 percent.
NovaONE makes its money by charging clients a percentage fee based on how much they save. Business has been so good, in fact, that Sauter, who is the company’s sole employee, has enlisted former telecom executives in Illinois and Michigan to work as independent consultants.
“There’s a lot of talent out there now because of downsizing, so it makes perfect sense to tap that expertise, create opportunities and better serve our customers,” says Sauter, 46, a married father of two from Mount Horeb.
A long overdue idea
Barry Orton, professor of telecommunications at the University of Wisconsin-Madison and a national expert on consumer tech issues, says the concept of an independent telecom broker holds promise and is long overdue.
“It’s a new idea to me but one that makes sense,” he says.
Orton says many public institutions and private companies simply pay their monthly telephone bill without ever looking into ways to consolidate lines, use new technologies or negotiate a better rate.
“The incumbent telephone companies like TDS and AT&T love those kinds of customers,” says Orton.
Not surprisingly, officials at AT&T have bristled at that characterization, saying phone companies are continually working with customers to provide the best service at the lowest price.
“We have a long and successful history of working in a competitive environment,” says AT&T spokesman Chris Bauer. “Our customers, which include all of the Fortune 1000, look to our teams of specialists to provide the most effective and cost-efficient solutions to meet their needs.”
But Sauter says many businesses and organizations are spending far more than they should for their telephone services. NovaONE has focused on companies with 10 or more employees, but Sauter says they will work with any size organization.
“Keep in mind that AT&T dislikes anyone that eats into their revenues,” he says. “I just did a comparison for Rock County which is serviced by AT&T and I estimate it could save up to $50,000 per year.”
Actually, one of the first customers to use NovaONE was the Mount Horeb School District. It was an obvious move since Sauter serves on the School Board and chairs the district’s finance committee.
“One of the first things I looked at was the phone bill and it was like $4,000 a month,” says Sauter, who donated his services to the district.
By consolidating lines and making other technical changes, Sauter was able to cut the district’s phone bill in half.
“Jim took the time to listen and understand our needs, then presented concrete ways that our network could be updated, while at the same time, saving us money,” says Superintendent Wayne Anderson. “We now have a more efficient network with new features at a lower cost.”
Utilizing the Internet
The bulk of the savings for NovaONE clients comes from switching phone service from land lines to the Internet — so-called Voice over Internet Protocol or “VoIP.”
The entire field of “IP telephony” refers to communications services — voice, fax or messaging — that are transported via the Internet rather than the through traditional telephone networks. The basic steps involved are converting the analog voice signal to a digital format and compressing the signal for transmission over the Internet. The process is then reversed at the receiving end to complete the call.
Devices like the home “Magic Jack” are based on the VoIP concept.
To organizations paying for multiple phone lines, the savings can be significant. In working with the Wisconsin Heights School District, for example, Sauter discovered the district was paying for 45 separate land lines to buildings in Black Earth and Mazomanie in addition to the high school/middle school located between the two villages.
“That was a lot of money going out the door every month,” says Sauter.
By running phones through the district’s main campus computer, however, Sauter reduced the number of lines from 45 to four, with a new Primary Rate Interface or PRI line running into the high school.
A native of San Jose, Calif., Sauter moved to Chicago in the 1980s while working for Hitachi. There he met his wife and the couple ended up relocating to Wisconsin.
Sauter says he enjoys the Madison area and adds that it shares many of the same progressive values as the Bay Area. He is now looking to apply those values to his fledgling business.
“Our core philosophy is to apply the highest standards of honesty, objectivity, and expertise to complex telecom issues,” he says.
Hard to argue with that, especially if it cuts the phone bill.