|Kelly Teal Blog|
Kelly Teal, senior editor of Channel Partners, relies on nearly 10 years of reporting on telecommunications business, regulation and the channels for her perspectives on industry trends.
Is Partner Compensation Changing?
One of the key questions in the recent 2011 Channel Partners Compensation Survey pertained to partner compensation and whether it’s changing. The open-ended inquiry netted dozens of responses, the majority of which lean toward “yes," and show some intense frustration. I wanted to highlight some of those replies and get input from more of you. We’re going to be talking about the Compensation Survey at the upcoming Channel Partners Conference & Expo in Chicago, and panelists will include a competitive service provider, an agent and a telecom lawyer.
“All the LECs are giving us the stiff arm with lowering of commissions, eliminating residuals. It's a clear message they don't want to use us as an augment to their sales force."
“You have some carriers that are moving more towards working with a limited number of agents so they are reducing their commissions to direct agents and making them go under master agents. [Meanwhile] other carriers are opening up their programs and coming up with new ‘levels’ for commissions, which is [degrading] the master agent model."
“Pay dates are being pushed back to dates up to a YEAR after the deal has been inked. Probably all a result of the lousy economy!"
“The competition landscape seems to be holding steady with the exception of the biggest carriers who seem to be leaning more toward one-time payments for acquisition."
“Margins are shrinking/slimming."
“Depends on the carrier. Verizon has always been terrible and is getting worse. Matches their service, I guess. AT&T is getting worse as well, as is their support and service. I think a backlash is coming. AT&T and Verizon will treat the channel as badly as we allow them to."
“Some of the larger carriers don't believe that a renewal is a competitive event so they are dismissing renewals as though the customer is loyal to the brand. This is so far from the truth it hurts."
“Agents are being cancelled by carriers at a significant rate, and are turning to master agents for protection. At the same time, if those master agents do not adopt managed services and cloud computing, they will find their businesses shrink over the next few years."
“Terms and conditions that were readily available five years ago are no longer available in new agreements. The legacy agents and masters have a significant advantage when it comes to agreements today."
“Seeing a shift to a better mix of upfront and residual, which is helpful. Upfront helps with cash flow, and residual builds the long term health of the business."
“Carriers have always manipulated their compensation with the aim of incenting their agents to sell specific products in specific ways based on the will of the carrier's leadership. With very few exceptions, they've always had loopholes in compensation plans that encourage channel conflict."
“Every day. Downhill."
“Due to price reduction on services we are having to sell twice as much to make the same commission. Commissions need to be increased and/or new revenue streams need to be found."
“LECs clearly don't want to work with agents. … [They’re all] lowering or eliminating commissions. Most are moving us towards wireless commissions."