Qwest Communications International Inc. plans to make changes to the Qwest Business Partner Program to address complaints from partners about its 2009 contract. Effective June 1, these changes include the addition of a new Premier Elite business partner level and a rollback of the renewal commission reduction on in-region local services.
The changes are a feather in the cap of the new channel chief Blake Wetzel, vice president of sales for QBPP, who took charge of the Qwest channel in August 2009. Agents, speaking on background, told PHONE+ they had been lobbying for changes for a year and a half with little result from the previous QBPP leadership.
Our team feels that Qwest has rededicated itself to the channel and to two-tier distribution, said Ben Humphreys, president and CEO of QBPP agent Comtel Communications. You always would like more, but we are very pleased the new direction that the program is taking under Blake. This is just another piece of proof to that end.
Wetzel told PHONE+ he would host a call with QBPP members Monday afternoon to share the details. He said the changes were a direct result of feedback from the QBPP advisory board.
One of the most controversial changes in the 2009 contract was a reduction in the commission percentage on renewal orders on in-region local by 2 percentage points, effectively lowering a 14 percent commission to 12 percent. At the time, agents said the policy created a disincentive to renew accounts and that as a result they would consider moving business to other carriers that paid full rate on renewals.
Effective June 1, the reduction on renewals is being lifted, Wetzel said. He added that all accounts that were renewed between Jan. 1, 2009, and June 1, 2010, also would be paid at the full rate going forward. Qwest will not however pay the two points on a retroactive basis, he said.
Of all the program changes weve made, this is one [the advisory council members] have been very vocal about, said Wetzel. As a result, QBPP did some math to calculate the impact of the policy on the program and designed it did not align with Qwests goals for growing its MRC sales and retention rates.
We wanted to make sure that we were consistent across all of our platforms, that we embrace the fact that retention and locking up our customers long-term is a key driver for our success, Wetzel said.
The 1 percent fee to participate in Qwests channel integration program remains intact, however. That fee enables agents to choose the direct rep that is assigned to accounts they re-term. Otherwise, Qwest will assign the rep automatically.
Another concern that agents expressed was about growing their bases without more revenue protections. In response, Qwest has instituted a new business partner level called Premier Elite that offers a higher commission percentage and greater revenue protections than do the other existing levels, which include Select, Master and Premier.
The Select level was added in March 2007, with a minimum commitment of $50,000 in monthly billed revenue. At that time, Qwest reported that master business partners have a minimum of $100,000 in monthly billed revenue, and premier business partners have a $500,000 in monthly billed revenue minimum. Premier Elite members have a monthly revenue commitment of $2.5 million, agents said.
That’s a lot of revenue. We need more protections. We need to know that the rug cant be pulled out from under us, said Humphreys, who also is a member of the Agent Alliance, which has a group contract with Qwest and is one of the carriers top agents, earning Highest Annual Sales for a Premier Master Partner in 2009.
In the past 18 months or so, many carriers, including Qwest, have for various reasons canceled agent contracts, effectively cutting off agents monthly residual commissions if their contracts dont offer compensation protections, such as an evergreen clause ensuring payments for the life of the customer.
Dale Tucker, QBPPs senior director of business development, said the revised contract terms for Premier Elite business partners are designed to extend commission protections, but do not include a true evergreen clause. Tucker declined to be more specific about the duration of the commission payments.
We are offering to this program level additional protections related to their commission stream should something change in the relationship between Qwest and the partner. This is in response to their desire to have a greater comfort level in continuing to focus on their Qwest activity and to grow their business with Qwest, Tucker said.
Qwest executives declined to disclose further specifics, but agents noted there also were improvements in the cancelation for convenience provisions of the contract for Premier Elite members.
“This is a great change to the corporate culture of Qwest,” said Ken Mercer, senior vice president at master agency Telecom Brokerage Inc. “It shows Qwest’s commitment to the channel and gives us even higher goals to shoot for.”
According to Wetzel there are a number of QBPP members that already qualify for Premier Elite status and several others that are near the threshold. He would not disclose the exact numbers nor identify any of the qualified partners.
Once the contracts for the new program level are executed, Qwest may be announcing them, but at a minimum they will identify themselves with logos provided by Qwest for their marketing materials.
Agents also said they believed the contract changes would survive Qwests acquisition by CenturyTel Inc. Announced April 22, the deal is expected to close in the first half of 2011.
“With CenturyLink buying them, it also helps us show our subagents Qwest is still committed to being a strong force in the indirect model,” said Mercer. “They have always been champions for agents.”