Birch Barks Up the Agent Tree

CLEC Birch Telecom is recommitting itself to the agent channel - this time with a proactive approach that involves beefing up its staff, revamping its contracts and retooling its extranet.

The move is part of a global re-evaluation the company undertook at the end of 2003 that resulted in the hiring of Paul Hales to lead the sales staff as senior vice president. “We as a company had gotten to the size that we could not single out success from one direction,” says Hales, remarking on the company’s reliance on the direct sales channel.

While the company technically had an agent channel, it was the remnants of its merger with Ionex Telecom in March 2003 and was in place primarily to respond to requests from agents to sell its services. “We didn’t have a go-to-market strategy,” Hales says. Instead, he thought the channel would be a way to put the company’s feet on the street and spread the risk.

He convinced management and now, he says, the channel is a key strategic emphasis for the company over the next 24 months to 36 months.

“We will double our revenue from the channel in 2004 and again next year,” says Hales, explaining that the company’s goal is to shift its take from the channel from nearly nonexistent to 10 percent to 15 percent in 2005 with a long-term goal of reaching 35 percent.

In an effort to reach this objective, Hales hired Bob Stewart, who spent the previous five years as senior director of alternate channels for Allegiance, which was recently acquired by XO Communications Inc. Stewart joined Birch in May, and began identifying issues such as headcount and contracts that were ripe for renovation.

Stewart is targeting small and medium agents, arguing the company’s regional coverage and product mix is more appealing to this segment than a nationwide master agent.

Formed in 1997, Birch was one of the first companies in the Midwest certified as CLEC. It offers local, long-distance and broadband Internet services. The company now has 1,400 employees, 150,000 customers and $340 million in annual revenue. It has a facilities-based network in SBC territory as a result of its merger with Ionex. In those states, Birch offers the BirchLink family of services, delivering local, long-distance and high-speed Internet access over a digital connection. Birch is using UNE-P to offer local service in the BellSouth region, but is planning a migration to facilities, Stewart says.

Since joining he has increased the channel staff from three to eight - all working in the SBC territory, including one each in St. Louis, Kansas City, Oklahoma City and San Antonio and two each in Dallas and Houston. Another half dozen or so channel managers will be hired to target BellSouth territory, Stewart says.

Stewart also went back to the drawing board on the agent agreement and commissions structure. Now, he says agents can choose from a front-loaded/residual contract or a residual-only contract, the latter being a new addition. He adds that a new commission structure includes tiers of performance.

Stewart now is setting his sights on improving the company’s agent extranet. Online real-time order status and commission reporting are two items high on his list. “It needs to be a vehicle that agents rely on, that helps them bring value to the equation,” he says. “We are evaluating what visibility do we have and how can we deliver it to the Web.” Improvements are expected later this year, he says.


Birch Telecom

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