AccessLine Launches SOHO VoIP Product with Costco

AccessLine's combined system-and-service offering is being marketed to the retailer's business members nationwide.

By Jeff Goldman | Posted Jul 23, 2008
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AccessLine Communications, which last fall became a division of Telanetix, Inc., this month announced the launch of a new combined business phone system-and -service package, the AccessLine Digital Phone Service—which is being offered at a discounted price to members of the warehouse retailer Costco.

According to Kent Hellebust, AccessLine's chief marketing officer, what really makes the new solution stand out is the fact that it's a combined offering. "It is a combination of a business phone system with the phone service lines to use with the system—it's for small businesses who need between two and eight business lines," he says. "They have the option of two different phone systems: a home office system that has just two business lines associated with it and up to six phones—and a small office phone system that has, variably, between two and eight business lines and up to 24 phone stations."

The aim, Hellebust says, is ease of use—and ease of deployment. "What happens is, within seven to 10 business days from the time someone buys this online, they receive a package in the mail that includes the phone system and phones that they've ordered, they basically plug the phone system into their router, they plug the phones into their phone system, they wait for the little green light to go on—and they're making phone calls," he says. "It's a 15-minute install."

And for the company's target market, Hellebust says, that's a great selling point. "None of the customers that we're selling to have got an IT manager on staff—we're talking fewer than 10 employees," he says. "Typically, we're talking to the business decision maker: a lawyer or a plumber or a doctor's office manager or whoever, none of whom are technologists… they want to make a decision, they want it to work, and they want to get on with things and make money."

Saving money

To make the offering more attractive to small businesses, the purchase price of the equipment is spread out over 12 months, and the first year of service includes two free lines. "So if they're buying the home office system, which only has two lines, they're effectively getting business phone service for free for the first year, for the cost of a monthly installment plan for the equipment," Hellebust says.

If purchased directly from AccessLine, the monthly fee for those first 12 months starts at $90.98. Pricing for Costco members varies according to membership level: Gold Star and Business members pay $88.98 a month, while Executive members pay $78.98.

After the first year of free service, direct AccessLine customers pay $34.99 per line per month for unlimited local service and 1,500 minutes of long distance service per line, while Costco's Gold Star and Business members pay $29.99 per month, and Executive members pay $24.99 per month.

And Hellebust says most customers, inevitably, are picking the solution up through Costco. "As you can imagine, Costco is a great channel—so the majority of what we're currently selling is not at our own retail pricing: it's to Costco membership," he says.

Hellebust is quick to point out that there is another VoIP phone system available from Costco: the retailer also offers a system from Syspine, powered by Microsoft Response Point software—for $1,799.99. "That's a bit of a road bump for small businesses… and it doesn't include phone service," he says.

Working with Costco

The AccessLine Digital Phone Service isn't the start of the company's relationship with Costco—AccessLine has been marketing add-on telephony services, including toll-free numbers, conference calling, auto-attendants, and voicemail, through Costco for the past seven years or so. "These were simple, basic applications… we were not replacing the LEC or the primary carrier for a business: we were just adding other bits of telephony value," Hellebust says.

Having that pre-established relationship with Costco made it much easier, Hellebust says, to persuade the retailer to consider the new offering—though he says Costco was still concerned about the reliability of the VoIP service itself. "We said, part of it is that we have our own network—and part of it is that we put customers through a much more rigorous pre-screen… we pre-qualify their broadband connection," he says. "We ping it, we run tests on it, and we tell them whether they're going to have enough bandwidth to have a good quality experience. We have very strict thresholds for bandwidth capacity, and if they don't currently have a circuit that meets those, we won't sell to them."

Looking ahead, Hellebust says he's optimistic about the prospects for the offering. "If we are successful, I think it's arguable that we will be the first carrier who's successful going to this business segment through a mass retailer, because it's not something that has worked for our competition," he says. "It's a question of how you put it together… and we think we've done enough to create differentiation there that it's going to be good to us for a number of years going forward."

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