Verizon Combines Enterprise, SMB Partner Programs

Verizon Communications Inc. has recombined its partner programs into one for 2010, a move that has cut the carrier’s agent base in half, but has streamlined processes for the remaining partners.

The new Verizon Indirect Sales Program combines the former Verizon Solutions Partner Program, which targeted small and medium businesses, and the Verizon Business Indirect Channel Alliance, which targeted enterprise.

In 2007, the ILEC created VSPP to consolidate the former MCI and legacy Verizon channels. The following year, Verizon split the channel program apart once again based on target size, forcing many of the partners to belong to both programs, which each had separate contracts, compensation schedules, channel support personnel, tools and processes.

“We have taken the guessing out of the game,” said Sue Molnar, who is formerly with VSPP, but now heads the new program as its director. “We have one contract, one compensation plan, one channel manager support structure and one set of systems, tools and training.”

Molnar reports to Verizon Vice President of Sales Jim Geary, who oversees both direct and indirect sales for midtier businesses (20-1,000 employees) and above. Under Molnar, there are four regional channel sales managers, including Chris Dekowski, Mid-Atlantic; Dave Longo, New York and New England; Becky McDill, Texas and California; and Dean Condotti, Southeast and “everything in the middle.” A sales operations manager and a recruitment manager also are part of the channel team. There also is a sales engineering team dedicated to the indirect channel, but it reports to a nonchannel organization. Customer service support is shared with direct sales.

Molnar said the combination did result in some layoffs, but she did not disclose the number of people impacted.

The consolidation also has trimmed the number of partners considerably. Molnar declined to divulge the numbers, but agents, speaking on background, estimated the new program has between 60-70 members while the previous programs each had 80-90, or more than 160 combined, in 2008. The partners that were invited into the program are those with an IT solutions background that can drive strategic sales.

“We selected some critical indirect channel partners from the former MCI and the former Verizon programs to have a skill set to take us where we need to go,” Molnar said.

Verizon’s channel needs to go after the 20-1,000 employee space or what the ILEC calls the midtier. Previously VSPP targeted 20-500 while the Business Indirect Channel targeted 500-1,000. Molnar said one of the drivers for consolidating the programs was to be able to go after this midtier sweet spot.

The company is pushing IP- and cloud-based services (VoIP, IP MPLS, private IP, etc.) into the segment. Shifting the mix toward these advanced products is one of the goals of the program and it’s stressed in the new compensation plan, Molnar said, explaining that commissions on core products have been lowered and commissions on strategic products have been increased.

Agents told PHONE+ the commissions on IP products are three to five times greater than those on core products, which were cut 20-25 percent. In addition, some services like POTS and FiOS are compensated by upfront payments only.

Molnar said Verizon also has implemented a new bonus structure whereby an indirect partner can earn bonuses on sales of strategic products based on monthly sales revenue. She said there are at least six payout thresholds.

The company also changed its agent agreement to include both a minimum monthly threshold and a higher threshold with a higher commission percentage. “Our goal is to incent the partners that have the lower tier threshold to get to the higher threshold,” Molnar said, noting conversely there is the potential for a partner to drop to the lower percentage if sales lag.

The partner support tools for the previous programs also have been consolidated from five to three. The existing joint commission tracker, Cash, remains, but the respective partner portal and ordering systems have been combined. Insite, a former VSPP portal, has been revamped and now includes promotional and product material from BSG Direct, the enterprise program’s portal. Verizon also has standardized on OneSource for pricing, quoting and ordering. Previously, enterprise agents used a system called OneView.

Keith Muller, CEO of master agency Interactive Telcom Solutions, a premier exclusive Verizon partner and a member of both 2008 programs, said it’s still early, but on paper, the changes appear to be positive. “If you take a look at what it was and the way it is projected to be, it certainly will be easier to deal with Verizon,” he said. “It should be much nicer to deal with one single point whether it be Verizon Business or Verizon Telco products and services.”

He is particularly pleased that the systems have been consolidated. “Last year was tough because the programs categorized prospects by employee size. It had nothing to do with whether they were legacy Verizon or MCI, though the programs’ respective support structures were set up that way. “From that perspective, absolutely, it is a big positive change.”

He also said that the company has made a great effort to be competitive with its IP-based products. “Early on they were just priced out of the park,” he said. “Now they are very competitive. …Where you make money is with their IP products and Ethernet.”

In addition, he said Verizon has worked on simplifying the product packaging and contracts to make some of the products more transactional and easier to sell.

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