Master agency Intelisys says it will earn nearly $36 million in gross commissions in 2011 on total net billed customer revenue approaching $200 million annually. This revelation was made by Jay Bradley, president of telecom services for Intelisys, in a public blog published on its website in August. The question one that Bradley answers in his blog is why would a private company in a fiercely competitive industry share this information? Is it bragging rights? Intelisys may very well be the largest master agency in the country, but thats not the intention, Bradley insists. So what is? Channel Partners asked Bradley to explain. What follows is an edited transcript of that conversation.
CP: Why disclose your revenue numbers?
Jay Bradley: The reason that we are OK with disclosing it is we think it provides some inspiration to a lot of people that we work with today both in terms of our sales partners and our supplier partners in terms of whats possible. We wanted to put it out there to say, Hey, not only is this possible, but we think that we have really just scratched the surface. We think there is so much more to get. We believe that its there and that we can go get it.”
CP: Isnt there also a larger message to the channel community?
JB: Yes, its a call to action to the entire industry. Lets think a little bit bigger. Lets expect a little bit more. Lets get out there and ring the bell and shout from the rooftops that a great way to do business in the telecom sector is through an independent adviser.
CP: Intelisys has set a goal of $100 million in gross commissions. Why $100 million and in what timeframe and what are your plans to get there?
JB: We do have a runway that we can see that just through organic growth alone and, based on past experience, we think we can achieve the $100 million mark before the end of the decade. Thats with no help in terms of a rollup or acquisition strategy; thats just on our experience in growing our channel business with sales partners and no direct sales.
CP: Does Intelisys plan to continue as a traditional master agency or to be a different kind of company in the future?
JB: I dont think we can sit here and say we know what the future looks like. But for all of these years, not knowing what the future would look like from a communications perspective, its worked out very well for the channel in terms of being able to run good, successful businesses. Now, we have our eyes on whatever will change that for the better and help accelerate our growth. In the meantime the business model we have out there providing a national master agency working directly with partners and no direct sales and really helping those partners grow their businesses faster is kind of where our head is at right now.
CP: In your blog, you mention Intelisys subagent NetSources recent achievement of $1 million in MRR caused agents to rethink” what was possible. What did you mean?
JB: It made people step back for a moment and say, I wonder if there is something in my model that if it were tweaked or changed would allow me to achieve a similar kind of success. Is there something I havent been looking at that would allow me to get to that number?” A lot of folks we do business with in the channel today would love to be there, but not a whole lot are. I think that announcement made a lot of people look at their own businesses and say, Is this something I want and, if it is, how do I achieve it?”
CP: You predict a change in the way carrier sales are done, moving toward indirect. Is that wishful thinking or are you seeing this in the marketplace?
JB: The point there was just that as the channel grows and becomes stronger, I think carriers will find new ways to help assure themselves that by putting more resources into the channel rather than direct sales, they will achieve the targets they need to achieve. We see a lot of midlevel carriers wanting to put more resources in to the channel via local channel managers or folks that are on the ground and closer to the customer, folks that want to do more teaming with channel partners, and we think its a really good trend.
CP: Subagents seem to suffer from inertia or uncertainty about how to move to the next level. What is Intelisys doing to inspire them or educate them to achieve more?
JB: A lot of people struggle with who they are in terms of wanting to get to certain point. You hit a ceiling and you arent willing to bring folks on to manage the business in place and you do more service than selling in order to maintain a healthy base of business. Thats one of the reasons we rolled out the Partner Investment Program. For those partners that want access to capital that will help them bring on another support person or bring on a direct sales rep for their agency or for any number of reasons, that is one tool that we give them.
We just announced the Advanced Commissions program, which is another tool for someone who wants to make the change from a direct selling environment or is new to the industry someone that wants to come in but doesnt have the runway to last six or eight months until they get their first commission. The advanced commission program is designed to help those folks grow.
There is a whole series of sales best practices and experiences that we have been through with our top-performing partners that we are willing to share with folks that are serious about growing their business. We share that in one-on-one meetings with them. We share that at our events and through our partners advisory council and through creating a community that talks to each other.
CP: What distinguishes top-performing agents from others?
JB: The biggest single characteristic that the top producers share is that energy and drive to be successful entrepreneurs. Thats been my take on it. Secondly, its the belief system in taking the next risk, hiring the next salesperson or support person and really building an infrastructure within your company that allows you to scale. Intelisys went though that in 2002. The original co-founders made a decision that the only way to scale our business was to make the necessary business investments, build the infrastructure and build the leadership team to take the business forward.
CP: Will Intelisys, specifically, or the channel, generally, go through a consolidation period to achieve mass?
JB: I am not expecting a sudden wave of sole proprietors becoming partnerships and partnerships becoming LLCs and S Corps. But at the top of the industry where Intelisys is situated, I think there is a real possibility we could see some consolidation. But there are a lot of conversations that happen before a deal gets done. I think a lot of people are looking at it. I dont know exactly what the future looks like. I dont see a sudden wave of the smaller sales partners getting together. That would not make a lot of sense.
CP: On one hand you say there is a lot of room in the channel for everyone to get a piece of the pie, which does not incent consolidation. But, on the other hand, you imply that being bigger creates credibility, which would argue in favor of consolidation. What is your view?
JB: Our belief is there is a certain understanding in business development circles that you want to capture a leader in an industry at a time when they are on their way up. We think that could be part of the future for any of the larger master agents. If there is a big VAR out there that wants to get real serious about telecom services, they have a decision to build or to buy. That could be a potential acquirer of a company thats doing what we are doing in this industry.
CP: What is your call to action to carriers, subagents and competitors?
JB: Certainly with carriers and supplier partners, we want you to rely on the channel more. We want to continue to work to find that place where we can grow our business and where you can grow your business and where we can help you to achieve your targets and you know you can count on us. We have arrived at that place with a number of our carriers. Based on our performance today, we have several carriers that reply on Intelisys and our sales partners for huge numbers every year. Thats significant. The call to action for carriers is to continue to be creative in how you approach the channel to get them to do more of the heavy lifting to get you to achieve your numbers.
For our sales partners, certainly, if you are shopping around for a way to grow your business faster, Intelisys has fielded the tools like no other competitor we are aware of to help you do that. As I say in my blog, if we are going to go change this industry and we are going to go grab two or three more points of share on the indirect side, we need to have a lot of people firing on all cylinders. We have put tools in place and the personnel in place to help sales partners do that for sure. Absolutely, we want folks to join our partner community because we think its the best in the industry.
Relative to the competitors, I think there is a professionalism that wed like to achieve across the board with all of the partners competing in the channel. We dont want to appear immature as a channel. We want to be very professional and going after the right things for the right reasons. Throwing around a half point higher commission here or there is small thinking. What wed rather see our competitors do is enable their partners to grow their businesses and take a high integrity, professional approach to building their channel community. I think a lot have today. I think there is a great group of master distributors out there. I think a number of them are very professional in the way they conduct their business and the way they help their partners grow. I would encourage all our known master agent competitors to continue to refine their business to achieve the same goal, which is lifting the ocean for all the boats.
CP: Is there a role for the Technology Channel Association in this last call to action?
JB: Yes. Dana Topping has just joined the board of TCA, representing Intelisys. I was present at the original discussion around TCA and what it could become. We are proponents of an industry association that has very clear goals, that are very big goals and that help everyone in the channel to grow, progress and become stronger players in the industry.
CP: Is there anything you would like to add?
JB: It just goes back to these numbers [estimating channel market share]. Even if you dont believe $100 billion [in total annual telecom spend]. If you think $8.3 billion [in monthly telecom spend] is large, cut it in half. What does the channel do today of that $4 billion? Maybe a couple of $100 million? What inspires us more than anything is the opportunity to change the game, to change how people perceive what a third party can do.