Level 3 Communications, Inc. Q3 2009 Earnings Call Transcript

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2009-10-28 12:27:07.0

Tags: Level 3 Communications Inc., Sales Force, Call Transcript, Earnings, Jeff, Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Our first question today comes from Mike McCormack with JPMorgan.

Mike McCormack - JPMorgan

First, on the business market trends, it looks like the year-over-year rate as well as the sequential rate of decline has worsened there, and some of your larger peers are starting to see a benefit I think certainly on the year-over-year rate of decline, and just given your scale of the thought we could see things turn a little faster there.

Maybe just give us a sense for, where project unity stands, if it’s provisioning issue, economic issue. It sounds like its not pricing. And then lastly just on the sales force, can you give us any update on where you stand at productivity measures and sales force churn?

Jim Crowe

Yes. I'll take the first question and Jeff you take sales force productivity and churn. With respect to your question, obviously each company has a different market focus some of the companies are the incumbent, others are alternative providers. In our case, I think fundamentally, the answer is what Jeff was referring to. Prior to this year, we had a primarily national management network, customer care, and sales model, and we were selling through our local networks to those who made buy decisions locally.

One of the contributions Jeff, made when he got here at the end of last year is to put a real focus on making sure that we were matched up to the way our customers buy, and I won't repeat the metrics that Jeff walked through in his presentation, but we see clear evidence below the top, which you correctly refer to as a decrease in revenue, but we see clear evidence that those local initiatives are bearing fruit, and we expect that over the next few quarters, we'll see the revenue line reverse and start growing again. Jeff, comments on sales force?

Jeff Storey

Sure. We are growing our sales force pretty aggressively through the last few months and the rest of the year. As a result, there is some churn that comes through that process, as you try and bring people up to speed. We don't see any significant churn among our sales force for the high performers that we have in the company, or the long tenured performers that we have in the company.

Productivity, when you're adding a sales force, is going to be lower than we would like, and it takes a little bit of time to ramp people up to speed, but we’re seeing the desired effect at the overall, if you think back to my comments about the side markets that we launched earlier in the year, with a 50% improvement in the Q3 to Q2, and a 75% improvement Q3 to Q1. We’re seeing the desired effect of the steps we are taking that, overtime we'll increase our sales force and will improve the productivity for each sales person.

 

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