The Peer-to-Peer blog is a forum for Channel Partners readers with the goal of stimulating discussion among partners about important issues impacting their business. The opinions expressed here are those of the authors and not necessarily those of Channel Partners editors or publishers. If you are interested in submitting a blog, please contact Managing Editor Buffy Naylor, email@example.com.
Renewals ARE a Competitive Event
By Edward O'Connor, Vice President of Network Technology and Sales, Total Communications Inc.
In this very complex and busy world, with all of the economic pressures on business decision makers, is it not their fiduciary responsibility to review all options when service agreements come up for renewal? The answer is a resounding YES!
And yet many would argue that is not the case. They believe customers would rather make no change because it’s safe. And, since it’s not coming out of the IT contacts’ personal checkbook and no one is auditing the expenses, the status quo is OK.
I would argue that with unemployment at record levels, personal savings at record lows, an IT manager would have to have a death wish not to pursue all alternatives, it’s their responsibility to their employer!
From an agent’s perspective, this means when a renewal is captured, it’s typically a fight to sell it all over again. We do the review, meet with the customer, discuss applications, check pricing, promotions and process orders. And carriers want agents to do this for free or minimum wage?
Some carriers believe that renewals are not a competitive situation and, therefore, pay little if any compensation for renewing a service agreement.
Low compensation for renewals is a disincentive to the agent that not only impacts his commission stream, but the service level to the customer. How does it improve service to the customers when their agents don’t maintain contact with them because they need to make a living selling products that generate revenues? Ultimately, it also impacts carrier revenue.
Unfortunately, when the carrier’s actuaries try to ascertain why recurring revenues are down, they won’t come to the obvious conclusion: The carrier wanted to improve profits for the short term at the risk of long-term results.
Perhaps if enough discussion prevails, carriers will listen. If we are still in business next year or the year after, we can all take credit for effecting change that benefits the industry and improves service to the customer.
What's your opinion or experience?
Edward O’Connor is the vice president of network services and sales at Total Communications Inc. , which has more than 30 years operating experience in the voice, data, network management, and structured cabling arenas as a large interconnect solution provider, representing the Cisco and Mitel/Inter-Tel product lines. Total Communications Inc. also is a master agency representing multiple carriers. O’Connor has more than 25 years experience as a leader in telecommunications firms, with expertise in PBX and network sales, marketing, engineering and operations. Over the past 15 years of his career he has held senior sales management positions with SBC, MFS, Brooks Fiber Communications, and MCI, with responsibilities during those assignments handling SMB, wholesale, enterprise and global markets. He also is a member of the 2010-11 PHONE+/Channel Partners Conference & Expo Advisory Board.