Expert Eye For The Channel Guy

Market Race’s
Michael Fair

Arunas Chesonis

Gary Eisenberger

Deloitte Consulting’s
Elizabeth Faber

Growth Partners’
Hedley Lawson Jr.

At the Spring 2004 Channel Partners

Conference and Expo, PAETEC Communications Inc. CEO Arunas Chesonis led a well-attended Tuesday morning general session titled, “Expert Eye for the Channel Guy,” inspired by the cable TV show, “Queer Eye for the Straight Guy.” The panel consisted of the industry’s own fab five experts: Hedley Lawson Jr., managing partner with Aligned Growth Partners LLC; Elizabeth Faber, senior manager with Deloitte Consulting LLP; Michael Fair, founder of Market Race LLC; James Warren, director of Qwest Communications International Inc.; and Gary Eisenberger, vice president of PAETEC Communications Inc.

The experts looked at representative new agents, seasoned agents and master agents, and gave each of their channel businesses a strategic makeover. The presentation included the profiles for these business models and the recommendations for their strategic growth from the expert panel with respect to finances, products, marketing, carrier contracts, compensation plans and more.

New agents were characterized as recently having left a direct sales position to begin a career as an independent agent or as novice agents with just a few years of experience. The panel discussed several challenges to new agents - who to sign with, how to make enough money to keep the business going, where to get training, how to make a plan of attack for sales and even what clothes to wear.

New agents were reminded that they no longer are knocking on 50 doors a day; they need to start networking more intelligently by shaking hands and kissing babies. Lawson advised new agents to have an individual exit strategy and a reasonable business plan; in other words avoid setting goals out of line with the cash flow to support them. In order to manage finances and run a lower-risk business, new agents should use this business plan to find a balance between master agents and partner programs. “Pick two or three carriers that you know you’re going to put the core of your business with and sign directs with them; but on the other stuff, work with masters,” said Eisenberger. Once signed with these carriers, agents need to demand free training from the carriers.

Finally, the panel reminded attendees “commissions and spiffs are not directly related to successful business partners.” They urged agents not to fall for short-term ploys. “Just because they’re advertising 30 percent commission, don’t drive all your business there. Then, all of a sudden, they fail you on the back end where they provide no customer service, then you’re basically scrambling. Or the company is not financially strong - so it goes twofold,” explained Eisenberger.

Seasoned agents, who have at least three years of experience or who work for one or two master agents and have a few independent contracts, were chided for letting their customer satisfaction responsibilities detract from new customer acquisition. Hence, advice for the seasoned agent centered on expanding back-office support to take care of customer service and lessen the load. Even though one panelist noted most successful agents have automated their customer contact database, the experts advised closely assessing revenue and cash flow trends before bringing on such sales support. Seasoned agents were encouraged to analyze the opportunities associated with becoming a master agent. However, they were urged to do so with predilection and caution - “learn to walk before you run” was the byword. “If you’re going from agent to master agent, you’re going from salesperson to business leader. Be prepared to do that; it might not be for you,” warned Lawson. Furthermore, seasoned agents were urged to go for the informative sale - be more consultative and offer up a strategy, even if it includes technology you don’t currently offer.

Finally, the panelists evaluated the concerns of master agents, including commissions, support staff, contracts, value and loyalty. The panel defined a master agent as having around 15 to 20 employees to do back-office support tasks and “a super-slick Web site and killer advertising - a real marketing machine.”

Master agents, first must get their commissions out correctly and on time, or they may end up losing their subagents, who often have limited loyalties.

Carefully choosing subagents who will add value and build relationships was a challenge issued by the panel to master agents. Eisenberger added, “there’s no time for the used car salesman in this business anymore.” Master agencies are built on the value of the opportunity for the customer. “If you have a bunch of agents just selling on rate, [then] as quick as they’re adding new business, they’re going to be losing old business,” Eisenberger explained.

Of course, there are several other concerns for a master agent, such as balancing time between building internal and external relationships and contracting with a multitude of providers. The experts advised master agents to retain an internal data overlay, MPLS, VPN expert - not just one for voice - to support their agents and they make sales on new technologies. They also can cut down on time by outsourcing part-time workers for back-office support.

The panel said master agents can better juggle carrier contracts by representing everyone or just a select few. Market Race’s Fair added master agents need vertical relationships and bundling capabilities between carriers.

The experts said growth and relationship building are key to maintaining a healthy channel business - whether an agent is old or new or a master agent.

The goal of the makeover was to show channel partners that “planning and strategy are not bad words.”

Expert Eye Goes Virtual

Taking a cue from the success of the channel partner makeover session at the Channel Partners Conference & Expo, TAG will host a cyber panel of experts that will field business strategy questions from the agent community.

Partner questions, submitted via an online form, will be answered in a new monthly advice column. Partners also can keep their advice seeking confidential, or simply learn from others’ inquiries. Go online for more details, at


Aligned Growth Partners LLC
Deloitte Consulting LLP
Market Race LLC
PAETEC Communications Inc.
Qwest Communications International Inc.

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