Verizon Reports 95% Response to Agent Contract

Despite attempts to organize a boycott against Verizons new agent agreement, nearly 95 percent of the agents invited to participate in the 2007 Verizon Solutions Partner Program are expected to sign the contract, the company said.

Shelley Murphy, vice president, Verizon Business Solutions Group, told PHONE+ today 90 percent of the invited agents executed their agreements by the Dec. 15 deadline. A few more have been given extensions, she said, estimating 95 percent of the nearly 100 agreements will be in hand for the final tally.

She said there will not be an immediate effort to find replacements for the outstanding 5 percent because their absence did not leave any major gaps in coverage. She added that recruiting new agents will be an ongoing effort for VSPP in 2007.

Murphy declined to confirm the number of agents that were cut from the program.

The 2007 agreement has come under fire from former MCI Solutions Partners and was the subject of an attempted boycott. The WE WILL NOT SIGN Coalition solicited likeminded agents via e-mail Nov. 29 and again Dec. 1. PHONE+s requests for an interview sent to the groups hotmail address were not returned.

The protests surround many parts of the contract, including interpretation of evergreen clauses, restrictions on pursuing larger accounts and lower renewal commissions.

The evergreen payment clause, which ensures payment to the agent on their accounts as long as they remain with the carrier, is a particular sticking point. It was included in former MCI contracts, but Verizons policy is any new service added to the customers account automatically puts it under the new Verizon contract, which does not have an evergreen clause.

Murphy told PHONE+ agents with former MCI contracts (even if they arent in the 2007 Verizon program) will continue to receive their evergreen payments as long as they continue to meet revenue thresholds specified in their contracts.

The rules of engagement regarding pursuit of larger accounts requires agents to get permission of the local branch manager before being able to target accounts that bill $10,000 or more per month. One agent who spoke to PHONE+ on background said it was akin to getting permission to continue working with customers they have had for years. Not knowing this in advance, he added, makes it difficult to determine if you can meet set quotas.

Quotas, however, have not yet been shared with invited agents another reason many are concerned about signing the 2007 agreement. Failure to meet quotas can result in termination of the agent agreement, according to VSPP Q&A documents. Murphy said quotas will be assigned in January and will be based on past performance by product and customer type with increases that reflect expectations for efficiency and productivity growth.

The renewal comp plan probably is the most controversial provision of the agreement. Agents have calculated renewal commissions at 70 percent to 80 percent lower than new sales commissions.

Because of this, some nonexclusive agents told PHONE+ off the record they are likely to move customers to a competitive provider to avoid losing revenue. Murphy said she has heard this from agents as well and said the renewal compensation rarely will net out to the steep decreases agents predict. She explained that in the case of a 10-node frame relay renewal, for example, most of the circuits would be upgraded and thus considered new business. The resulting commission would include a blend of new and renewal rates. Thats a piece we are working hard to help agents understand, she said, noting its a different approach that the former MCI agents are accustomed to, which applies the same commission to the entire contract.

To facilitate the education process, VSPP is going into 2007 with a low agent-to-channel manager ratio of about four or five to one, said Murphy. We want the channel managers to work with [agents] to develop business plans, she said.

One agent told PHONE+ he is hopeful Verizon eventually will budge on the renewal compensation levels, citing movement from AT&T in a similar circumstance.

We are a learning organization, Murphy said, noting suggested changes to the agent contract will be under consideration for 2008. A round of edits none impacting the key points mentioned above were made to the contract after it first was distributed in mid-November, but no subsequent modifications were made prior to the signing deadline, she said, noting the need to get agents on board and trained by the end of the year.

Verizon Solutions Partner Program

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