Khali Henderson Blog: An Obituary for the Transactional Agent

A common practice for journalists is to prepare obituaries for aging celebrities in advance of their deaths, so that they can go to press within moments of the reaper’s call. And so it is in that tradition that I begin to pen one for the increasingly infamous “Transactional Agent."

Transactional Agent, 20-something, of Anytown, USA, died [fill in the date] of obsolescence and complacency, without the comfort of a loyal customer base. He was born in the early 1990s, the product of a competitive long-distance market following the divestiture of the Bell System in 1984. He pioneered sales of long-distance and later POTS, T1s, PRIs and Internet access in exchange for recurring commissions from carriers he represented. He built a residual revenue stream by providing customers with multicarrier quotes. He indulged in an enviable lifestyle – nice home(s), cars, vacations – for most of the years of his life. Toward the end, he found customers defecting to those who could offer more than multicarrier quotes, including professional and managed services. He is survived by the Solutions Provider and the Managed Services Provider…

I am not sure how much time the Transactional Agent has left, but the prognosis is worsening as the complexity of the communications and IT environments grow. Customers are looking increasingly for trusted advisers who can help them not only choose vendors but also manage their services and/or costs.

I was discussing this recently with Tim Burke, CEO of Quest, a leading VAR/MSP who has been recruiting agents at the Channel Partners Conference & Expo to join its partner program. He said while agents understand the value of adding Quest’s services, which include security, wireless, data backup, disaster recovery, business continuity, system performance, VoIP, IP video surveillance and technical staffing, they are often too caught up in the transactional pricing of the core carrier services they sell. Some of this is contractual (they have to make quota) and some of this is habit. Unfortunately, he explained, that approach only works when customers request a price for, say, a T1. If they want a disaster recovery plan, they are not expecting it to be on a price list; they want to talk about how to achieve their goals.

The transition is not easy; and, the Transactional Agent, is unlikely to survive it.

Burke can relate. Less than a decade ago, his VAR business was faced with a similar death sentence. The disease came in the form of margin erosion on gear sales. His self-prescribed therapy: Diversify and augment revenue streams with managed services. Burke counts himself lucky; he has VAR friends that did not make it. (And, truth be told, there are VARs that are grappling with this migration still.)

Just as VARs like Burke have had to do, agents have to start thinking about their businesses differently. They need to think less like insurance agents and more like service providers. I am not suggesting that you all need to run out and put up a NOC and become an MSP. But you need to be thinking more about how to deliver those kinds of services either on your own or through partnerships. How can you aggregate services together as solutions?

One of the articles in the March issue attempts to answer agents’ objections to selling wireless. While I do believe the article is relevant to the present mindset of a lot of agents, I worry that the true point may be lost: Not only will selling wireless soon cease to be optional but so will selling it as part of a larger solution addressing a business need. It is unfortunate that both of these realizations must be made almost simultaneously. But for those late to the wireless party, the transactional selling spree is a luxury they are unlikely to be afforded.

The suggestion in the article is that agents bundle applications into their wireless sales. In another article, senior editor Kelly Teal discusses how agents can improve the performance of the cloud services they sell by optimizing their customers’ WANs. These are just two examples. We will be discussing more of them in these pages, online at www.channelpartnersonline.com and at the Channel Partners Conference & Expo, March 13-15, in Las Vegas.

I hope you will join us.