In 2009, the channel community has been discussing the topic of business ethics in its blogs, conferences, forums and backrooms. At the suggestion of master agent Josh Anderson, CEO of Telephony Partners LLC, PHONE+ is tackling the topic in a new and, hopefully, constructive way by presenting “ethical dilemmas” that have happened in the indirect sales channel and seeking comments from suppliers and partners.
What follows is our debut effort featuring comments from Anderson as well as agent Greg Praske, CEO of ARG; and service providers Ron Ireland, president and CFO of TMC Communications, and Michael Fair, vice president, general manager of alternate channels for One Communications Inc.
To add your own comments, look for this article online at www.phoneplusmag.com/you2009. If you have an idea for our next “ethical dilemma,” please contact PHONE+ Editor in Chief Khali Henderson at khenderson@vpico.com.
Ethical Dilemma No. 1
This scenario is comprised of two similar situations, both with the same agent and carrier. While the outcomes were different, both experienced similar chains of events that resulted in real financial impact for all parties involved.
Scenario 1: The agent had a client that wanted to migrate his 60 locations to some type of integrated access solution, and as a result the agent proceeded to secure quotes from a handful of carriers. One carrier in particular stood out from the crowd at 20 percent below its nearest rival. Prior to the signing of the contract, the client was visited by a direct sales rep for the carrier offering more than a 30 percent discount off the rates presented by the agent. The client presented this pricing to the agent and asked if he could match it. He was able to match it and the customer signed a contract through the agent. The difference in price between the agent’s original pricing and the final reduced pricing amounted to approximately $60,000 over the term of the contract, which has since renewed at the same rates.
Scenario 2: The agent had a health care consortium client to whose members he marketed his consulting services. One member, a group with 15 locations, contracted with the agent to install the carrier’s services into one site as a pilot. The services performed well and the savings were significant, so the agent and the client began negotiations for the other 14 sites. Prior to signing the contract, the client was visited by a direct sales rep for the carrier telling the client that he could provide lower pricing than the agent. The subsequent pricing negotiations resulted in the agent lowering the price 10 percent. At that time a second agent called on the client indicating he could secure even lower pricing. Upon hearing this, the first agent exited negotiations. Subsequent pricing exchanges resulted in a final price that was 60 percent lower than the originally quoted price. The client ultimately signed with the direct sales rep. The difference in price between the first agent’s original pricing and the final reduced pricing was approximately $190,000 over the term of the contract.
