Cable companies are significant telecommunications network service providers. They are the incumbent telcos’ primary rivals for consumer triple-play spend, but they also have made inroads into the business markets on two fronts: high-capacity and alternative access services for medium and large businesses, and voice and data for small businesses. Most cablecos have one or both offers at this point. What they don’t have is an experienced direct sales force to sell it. That’s why many are engaging the channel with more vigor recently. More providers are on board and the early adopters are sweetening their offers.
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| Cablevision's Joe Magliulo, Time Warner Cable' Ken Fitzpatrick, Comcast's Ed Gallagher, Cox' Tim McKinley and Charter Business' Jack Gordon at the World Trade Center in Boston. |
“They all seem to getting it, finally. By ‘it’ I mean they are going to have to include the channel in their plans going forward,” said John Macario, president of Savatar, a consulting firm with experience in both channel and cable telephony strategies. “This is probably due to a combination of two factors. The first is that their products are at a stage where they can sell them to real businesses. It’s been a long time coming, but they do seem to be here now. Secondly, they are looking at their costs of doing business.”
The cost of doing business includes two things: One is the transition from a consumer-focus to a business focus and the second is sales costs. “They’ve looked at the cost to build a pure direct model to reach the kinds of markets they want to reach and probably have come to the realization that they need to find a way to effectively add feet on the street by developing an indirect channel,” Macario said.
While they all may have reached this same conclusion (some as recently at this summer), they do not share the same understanding of how to build a channel. “I think some are trying things and going through some of the same internal arguments phone companies went through 10, 15 years ago: Do we do a bounty? Do we need a recurring stream? Is it some combination of the two? How do we deal with conflict between them and our direct sales force?” said Macario. “I am not sure all the MSOs will have a credible program coming out of the gate, but I think once a few of them figure it out, their brethren will be quick to follow and take the best of what’s worked and make it work in their organizations.”
What’s worked depends on your perspective. But Vinny Helfrich, vice president of business development for master agency Teledomani Inc., based in Beth Page, N.Y., advises cablecos to look at the Cablevision model.
Cablevision
Cablevision has been developing the indirect channel longer than its peers; its referral program for its Optimum Business products started in late 2005 and Cablevision added an agent program in summer 2006. The Cablevision agent program started with upfront bounties paid on sales, but in March 2007 changed to include a combination of a one-time spiff and a monthly residual commission, a key component as far as telephony agents are concerned. “No [residual] was the primary reason we did not sell Cablevision,” said Helfrich. “While we knew that DSL was not necessarily the best fit for the client, it was the residual income we were looking for, so we were motivated to push that type of product.”
Today, Helfrich said sales of Cablevision make up 15 percent of Teledomani’s business.
Cablevision has nearly a dozen master agents and about 80 direct agents, said Joe Magliulo, director of strategic sales for Cablevision. It also has doubted its support staff to include three (soon to be four) account managers and four dedicated support staff members.
