Packet8 Tries To Avoid Being Licked

Packet8 has entered into a co-marketing agreement with Pitney Bowes, the company known for selling postage stamp machines to 840,000 businesses in North America to sell in their Virtual Office business class broadband phone service as well as the Packet8 VideoPhone service to 840,000 PB Direct small business customers.

The move comes as Vonage is gearing up via VARs to sell to the same small business market. But Vonage has a different spin with the SOHO and SMB offering. It’s the folks doing the selling. The Vonage sales force are proven telecom and IT sales and installation companies (or are supposed to be). Pitney Bowes sells stamp machines and office related equipment. So just as P8 preceded Vonage into the consumer VoIP space, as they also did in the business space, they are hoping via this move to avoid having what happened in the residential market, where despite offering a better product, Packet 8 got their clocks cleaned when it comes to the number of subscribers despite being the first out the gate.

So while this Packet8 co-marketing opportunity to a step in the right direction for them to begin to penetrate the SMB market, and it’s something new that can be offered to the PBI customer base and sales force (remember sales people always need a “what’s new” answer to give to their customers) I question how effective overall a sales program like will be for P8 without PBI having any real telephone sell-in and support experience. Remember, in sales it’s more than about selling in. It’s about selling through. So far with this move P8 has taken the first step of getting the deal done with Pitney Bowes, but now both companies need to demonstrate that it can work and show some customer wins to have me convinced. That and they have to sustain the sales effort over years not weeks.

While I don’t want to give out free advice I’d be much more supportive of the move by Packet 8 if the could support the move with some test market or trial program sales efforts to date and if they articulated to those of us who watch them closely just how the program is going to be supported. How many work with’s per month are planned? What are the key markets both PBI and P8 want to conquor first? Where will the ad dollars go? To gear up with a full on marketing push including collateral, Packet8 service discounts, Web site promotions, advertising, direct mail and permission-based electronic mail offers, payment stuffers and packaging inserts costs money if that’s what they are doing.

Bottom line this looks like a dressed up lead generation or affiliate program type of deal to me.