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Verizon Business Does a U-Turn With VISP

By Kelly Teal
January 12, 2012 - Article

Verizon Business says it is reinforcing its commitment to the indirect channel and, to prove it, is revamping its Verizon Indirect Sales Partner (VISP) strategy and compensation. The details were expected to debut early this year. Michael Ruhnke, director of sales in the medium business segment for Verizon, shared some information with Channel Partners.

Verizon's Michael RuhnkeRuhnke first discussed the pending adjustments in a late December blog. "We will reinforce Verizon's commitment to its partners and to newly recruited partners, as we go to market in 2012," he wrote. Some of the new elements include fewer restrictions on segmentation, higher commissions on some products and services, more products and services for partners to sell and "aggressive incentives" to entice partners to sell the Terremark portfolio of IT, security and cloud services, Ruhnke said.

"We stand committed to our indirect channel program to drive sales and revenue in the medium business space," he added.

The statements come in stark contrast to Verizon's actions in early 2011. That's when the carrier cut indirect sales partners' commissions by an alleged two-thirds, scrubbed agents out of midmarket accounts and laid off as many as 10 channel managers. So why the U-turn? The company wouldn't get specific. "As always, Verizon sees the indirect sales program as a key component to executing its strategy in the medium business market — that was the driver for the changes," Ruhnke told Channel Partners. To that point, Ruhnke said, "We will allow partners to sell into the medium business segment."

And when it comes to commissions, Ruhnke could only say that increased compensation will apply to IP communications, IT products and security. He also could not say by how much commissions will rise but he did say Verizon is recruiting partners "who can effectively sell into the strategic products space we are targeting."

For Venture Group Enterprises Inc., one of Verizon Business's largest master agents, the turnaround is welcome. For the midtier channel, Verizon is returning some of the formerly protected customers — who could only be reached through direct reps — to an unprotected status, said Doug Turpin, president of VGE. "Our best guess is they are moving some 20,000 customers back to the unprotected midtier status but we do not yet know the total size. They are increasing compensation from prior year’s levels, but not yet back for many levels to where it was before last year’s changes overall. Still, the changes are positive for the channel as a whole."   

The program modification channel is the latest since Verizon bought MCI in 2006. In the intervening years, Verizon has split its partners according to customer profiles — SMBs and enterprises, and now, midmarket — as it has tinkered with its indirect channel strategy.

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Kelly Teal
Kelly Teal