Ethical Dilemma No. 5: Referral Quid Pro Quo

By Khali Henderson Comments
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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 comment from suppliers and partners.

Our debut effort on channel pricing conflict came in December 2009 as Ethical Dilemma No. 1. In Ethical Dilemma No. 5 we ask the question, are master agents obligated to send a subagent’s business to a carrier that referred the subagent?

Comments are from Dale Bohannon, president of independent agency IP Distribution Systems LLC; Ken Mercer, senior vice president for master agency Telecom Brokerage Inc. (TBI); service providers Daniel Lonstein, COO, AireSpring Inc.; and Donna Wenk, senior vice president of sales operations and customer care, PAETEC.

If you have an idea for our next “ethical dilemma,” please contact PHONE+ Editor in Chief Khali Henderson at khenderson@vpico.com.

Ethical Dilemma Scenario No. 5

A carrier referred to a master agent a subagent that was working on several opportunities. During the course of the introduction, the master agent developed the relationship with the subagent emphasizing the referring carrier. However, upon reviewing some of the opportunities the subagent was working, the master agent realized that several were not well-suited to the referring carrier, either due to technology or price.

Is the master agent’s duty to respect the source of the lead and to offer alternative carriers only when explicitly asked by the subagent? Or is the duty to provide the agent with other feasible solutions that may be less expensive?

IP Distribution's Dale BohannonBohannon: It is the duty of the master agent to advise the sub of other viable alternatives, but at the end of the day the subagent needs to make their own decisions based on the client history. The sub’s responsibility is to present some viable choices, but not lose sight of the fact they need to sell something as best in class. I think the days of the wishy-washy proposals with six different carrier options and “You pick what you think is best, Mr. Customer” have come to a close. To make a sale, you need to lean on something you know as reliable, but make the client aware of other options if that’s something they might be interested in. But it’s really not the master’s place to be involved in this aspect of the sale. You can still sell something even in the position of an independent consultant.

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