- competitive compensation plans
- fair and reasonable contracts
- ratio of support/resources provided to the indirect versus direct sales channel
- addressable accounts and rules of engagement
- level of channel integration or conflict
The reason agents are concerned about this is it is difficult to base a business on a moving target. The degree of a carrier’s commitment to the indirect channel can waver for many reasons, not the least of which is the whims of its leaders at the executive or sales veep level. A channel-friendly exec can mean the difference between having a lucrative and long-lived contract and the commission rug being pulled out from under you.
Dot-com era bankruptcies resulted in changes in leadership to the detriment of channel compensation and worse — cancellation of contracts altogether. These painful experiences are still fresh in the minds and bank accounts of many agents who now worry about changes in leadership due to the more normal processes of industry consolidation. These mergers and acquisitions are less likely to result in drastic program cuts characteristic of the Chapter 11s in the early part of the decade, but they have brought new leadership and, in some cases, sweeping changes to virtually all the commitment measures listed above.
A companion strategy is to send less new business to the unfriendly provider. I would guess, unless it’s a consolidated effort by a majority of a carrier’s partners, it will only have the effect of making individual agents look like slackers, which gives them limited sway.
Another approach I am seeing more of in the market is agents migrating their business models away from total reliance on carrier compensation plans. This is not to say that commissions need to be rejected altogether, but that they play a lesser role — a third or fourth leg on a stool, so to speak. This is in fact, the model that has been selected by CRA Telecom, which is the subject of this month’s cover story (see story).
Here are some ideas about where you can begin to make this transition:
• Professional Services. Many of the functions you already are performing for your customers have intrinsic value. These include invoice auditing, needs assessment, RFP preparation, adds/moves/changes, trouble reporting/escalation, network monitoring, expense management, etc. Consider charging for them.
• Equipment. Understanding gear is important to delivering converged services and also can be a step into a diversified revenue stream. Some providers are making it easier with bundled offers that come preconfigured, e.g. Linksys One and CommPartners.
• Managed Services. It’s not simply a commodity connection, but a monitored service that you can deliver on your own or through managed services providers. The takeaway here is diversifying your supplier base.
• Wireless. Mobile operators are not immune to the commitment fear, so let me clarify: On the mobile wireless front, there are opportunities to provide more complex applications that have separate compensation from the activation and MRC (if any). In addition, mobile device management can be offered even if you don’t sell the phones/ plans as an agent (see story). Finally, there is a world of fixed wireless applications (both LAN and WAN) that don’t require licensed spectrum and represent opportunities for partners to help companies with in-building and on-campus mobility.
In the end, it is my belief that agents who endeavor to diversify their revenue streams in the ways I’ve mentioned (or others) will bring more value to their customers and, in turn, stickier business to the carriers they choose to represent. The savvy carriers, too, will recognize and value a stronger partner.
KHALI HENDERSON
group editor
