AUSWR
The Association of U S West Retirees
 

 

 

VoIP pitch hits a new note: sales recruiting
One company is hawking the phone technology via multilevel marketing.
By Beth Potter, Staff Writer
Sunday, March 19, 2006

Bill Bowyer talks with evangelical fervor to five new recruits about how to sell phone customers on switching to Internet phone service.

"The VoIP revolution is here.  It's happening," Bowyer said, walking around the cafe tables at Abo's Pizza in Centennial, holding a training seminar on a recent afternoon.  "We're cutting people's phone bills, and Qwest is history."

Voice over Internet Protocol, or VoIP, is a hot technology that threatens to replace traditional phone service, because customers get unlimited local and long distance calls for a flat fee.  As many as 28 million customers may switch to VoIP in the next two years, analysts estimate.

Bowyer and his crew want a piece of the action.  The recruits include a Broomfield retiree, a financial planner and a security systems salesman.

"From J. Paul Getty to Donald Trump, it's all about timing.  For residential VoIP, the time is now," said Gunther Mueller, one of Bowyer's recruits and the owner of three Abo's restaurants.

While the technology is relatively new, the sales method -- multilevel marketing -- is not.  Amway, Herbalife and Mary Kay cosmetics have all become big brands through individuals selling to people they know and recruiting them to become salespeople, too.

In recent years, multilevel marketers have gone high-tech, selling everything from long-distance service to satellite TV dishes.

It's all legal, unless a company promises a service or product it doesn't deliver, said Kristen Hubbell, a spokeswoman for the Colorado attorney general's office.  She said the office has not received any complaints about Lightyear Alliance, the company Bowyer works for.

In general, if a company focuses on recruitment, it may be a pyramid scheme, which is illegal, said Susan Liehe, vice president of the Better Business Bureau in Denver.  A legal multilevel marketing company delivers on its product or service, she said, adding that Lightyear registered with the bureau about six weeks ago, so it has no BBB rating yet.

Parent company Lightyear Network Solutions, founded 13 years ago in Louisville, Ky., is a privately-held telephone reseller, said Josh Henderson, president.  It emerged from bankruptcy in 2002 and decided to focus on marketing VoIP.  The company now has more than 10,000 customers nationwide, he said.

Lightyear in Kentucky has received 67 customer service complaints in the past three years with the Louisville Better Business Bureau, said Charlie Mattingly, president.  "We would consider (67) a standard number, for a company doing the volume of business that it's doing," Mattingly said of Lightyear's mostly customer-service complaints.

Riding Vonage's coattails

Lightyear and other multilevel marketers of VoIP are riding the coattails of industry leaders such as Vonage, which spent close to $48 million in December 2005 alone to boost customers to 1.5 million.

"Vonage competes against any phone offering in the marketplace," said Brooke Schulz, a Vonage spokeswoman.

Scores of companies, including Qwest and Comcast, also sell Internet phone service.  Prices vary depending on service offerings and packages.

Comcast's "Digital Voice" Internet phone service is a "fundamentally better service," because it travels over Comcast's proprietary network rather than the regular Internet, said Cindy Parsons, a Comcast spokeswoman.

VoIP requires a high-speed Internet connection, which Lightyear doesn't sell.  But if you already have it through Qwest, Comcast or another provider, Bowyer and his recruits want to sell you phone service.

How it works:  Bowyer sells $24.99 unlimited local and long distance monthly phone service to customers, who also buy a $49 small, blue box that looks like a computer modem in order to make Internet calls.

"I sell a phone service to people who say they don't like Qwest," Bowyer said.  "You're going to pay your phone bill every month, anyway."

Bowyer markets the service to folks he knows and recruits newcomers through e-mail, seminars and training sessions at area hotels and computer stores.

If a customer wants to join the sales force, there's a $199 fee, with two marketing videos, Internet-based accounting help and other training, Henderson said.

Bowyer makes money on direct sales, plus gets a cut every time any one of his customers signs up a new customer.

Since he started four months ago, Bowyer says he has signed up more than 100 customers, including eight people in a single day.  Because he made $4,000 from sales last month, Bowyer said he's not interested in going back to his old job selling in-home security systems.

Travis Mitchell, who works at the Denver-based VoIP Review, an online trade publication, said he received an e-mail from a Lightyear salesman but "tuned out" when he realized it was a multilevel marketing pitch.

But Richard Wilt, 65, a Parker financial planner who signed on after he met Bowyer at a Denver networking event, said he's ready to make a sale.

"I'm not a fan of direct marketing, but we need air, we need water, we need heat, and everyone over 13 has a phone these days," said Wilt.

Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.

http://www.denverpost.com/business/ci_3614682