article

Soap Box – Agents Searching for Carrier Promise Keepers

Posted: 12/2000

Soap Box

Agents Searching for Carrier Promise Keepers
By Kieren J. McCobb

Having
attended the September AgENt Conference and Exhibition in New Orleans and the
"Sounding Off" Carrier Panel session, I would like to share some
observations.

What I saw were agents who fall into the category of: "We are full time
at this business and feed our families this way." The agents attending know
the carriers hold their livelihoods in their hands. Therefore, a lot of
attention is paid to sessions like the carrier panel, in which agents concerns
can be aired and their responses considered.

The September session was different than previous carrier panels, however.
There was a noticeable buzz in the room. Agents have become better educated as
to what they can negotiate. Indeed, agents have discovered they can
negotiate.

Fewer agents just sign intact agent agreements. Today, they look out more for
their future than they have in the past. This is because agents realize the
importance of having a knowledgeable attorney review the documents before
signing.

This session gave several hundred agents a chance to vent their frustrations.
And they challenged carriers with issues that span the gamut from contractual to
provisioning. Carriers routinely promise support. The "partner" word
is used heavily. Most of the carriers on the four-member panel stressed how
"important the agent channel is" to their respective companies.

Strangely, the only time many agents hear such promises is either at public
forums such as the AgENt Conference "Sounding Off" panel, or in the
afterglow and pillow talk immediately following the signing of an agent
agreement.

The sad fact is that carriers often fail to deliver on the promises they
claim in everyday operations. Ironically this is a "lose/lose"
situation: Customers suffer outages or missed service dates, agents hear it from
end users, and carriers fail to provide traffic in a reasonable timeframe.

Carriers need to work closer with agents, from better presale understanding
of the application through an on-time, successful installation and correct bill
verification.

Not long after the September session began, panelists stressed that their
companies are committed to the indirect channel. They seemingly were surprised
at the resulting outcry.

I would like to ask the panelists, and all carriers: "Is anyone
listening? I mean really listening?"

Agents have been voicing their concerns for years. Agents have followed
carriers’ suggestions. We’ve gone through the channels, and paid attention to
the carriers’ procedures.

Yet, when agents ask where a given change or improvement is, we most often
hear, "We’re working on it."

Since the typical suggestion is motivated by a desire to streamline and
improve, what is there to work on? How far down on the MIS "to-do"
list can trimming paperwork be? Cutting costs? Speeding provisioning and
improving installations?

Instead of good things waiting for scarce resources to get around to them,
outsource it. The important thing is to implement a common-sense idea, not to
excuse the bureaucracy that slows it down. I believe the panelists who
participated individually and personally are sincere in their desire to
offer good agent support. Having said that, however, I must also state the
execution and delivery of that support somehow doesn’t happen. Their sincerity
is not shared by the people in their organizations.

Ironically, these people frequently are nice, hard-working folks who are
doing what they are told, by the book. Therein lies the problem. The people
sitting on the panels answering agents’ concerns are not empowered.

Frequently, these panelists would like to make a common-sense business
decision to help a customer, but they are hamstrung by policy, and perhaps the
fear of unemployment.

That is where the carriers must re-examine what they do. Partnering with
agents means either being a partner or being a hindrance. If it is the latter,
we all lose. Partnering with your own employees means giving them good training
and genuine authority.

During the September sessions, this question was asked: "How committed
are you if you’re not offering evergreen clauses?" (Evergreen clauses refer
to paying an agent for procuring a customer for as long as that customer remains
a customer.)

I was the agent who asked a panelist about his company’s decision to cancel
two existing agent agreements, both billing six figures a month. Both of the
agents are friends, and colleagues, of mine. To his credit, the panelist met
privately with the agents several hours later.

The concerns raised were addressed during the next month, and I spoke with
the agents on Oct. 20. One told me a written resolution had been reached. While
waiting to hear what the second agent had been promised, the first called back.

Let me explain circumstances leading up to the situation. The agent had
negotiated an agreement with a carrier. Because of problems under the carriers’
control–poor and missed provisioning, failure to be competitive and
inconsistent customer service–some business was provisioned late; some was
never provisioned.

Because of this, performance levels or quota numbers were missed, and the
carrier cancelled the contract, withholding the agent’s commissions for months
while causing grief to end-user customers.

In other words, because of the carrier’s problems, it turned around and
amended the contract with the agent to favor itself. Specifically, the carrier
wanted the agent to give up evergreen and agree to new performance
quotas!

After this was brought out during the September panel session, the panelist
agreed to investigate the matter. After the agent received a letter in
mid-October that promised full reinstatement of his contract, commissions, etc.,
the agent received an e-mail a week later that rescinded the promise.

The carrier explained it wants new performance quotas in return for
paying what the agent already had earned in commissions and reinstating the
contract. This kind of astonishing arrogance sparks exactly the kind of
frustration agents were expressing during that September session.

In general, the panelists’ view to the evergreen issue was: "In the new
space of where the market is going, not offering evergreen clauses is not the
point. It’s a matter of being competitive in the marketplace. The life
expectancy of a customer isn’t what it was at one time."

Ladies and gentlemen of the carrier community, hear this very clearly:
Evergreen is exactly the point, and only part of the larger and more
important point … partnering.

Not only is evergreen necessary, it is viewed as sacred among agents. The
reason this is so important is that we literally support families this way, and
we feel we should be paid as long as the carrier is paid.

As agents, we all are only too familiar with customer list and proprietary
information language in all agency agreements. That notwithstanding, we all know
that, in reality, the end users are not the carrier’s customers; they’re our
customers. We, the agents, are the carrier’s customers.

Evergreen is an essential component of an agency agreement, so much so that
it is a deal breaker.

The excuse given to rescind evergreen in the "going forward"
contracts of this panelist’s company was that a customer’s life expectancy (as a
customer) is shorter than in the past. That statement negates the carrier’s own
reason for not having the evergreen clause. If the customer’s life span is
shorter today, offering evergreen doesn’t matter in actual fact … does it?

Finally, more agents are requesting, and receiving, equity bonuses, be it
stock options, appreciation rights or whatever. The important point is that
agents increasingly are realizing they should negotiate and receive some share
in a buyout or public offering of the carriers they’ve helped to build. And as
more agents accomplish this, more carriers are offering it. It’s not isolated
anymore.

In closing, work needs to be done in the relationship between agents and
carriers to realize good faith. A good beginning would include carriers’
recognition that:

* The agent channel is a permanent and important part of their marketing
strategy;

* Evergreen is a staple of the contract, but it isn’t enough;

* Some type of equity plan of options, shares or other bonuses-should permit
agents to share in a merger, buyout or acquisition; and

* When agents receive orders and the revenues are delayed for reasons beyond
their control, the agents should not be insulted by a quota shortfall when they
have done their jobs.

It also is incumbent upon agents to play fair and honestly and to take the
"high road" in their dealings with suppliers.

The first carrier that sees the light, and actually delivers on its
partnering promises, will be the "Pied Piper" of carriers, attracting
serious agents with actions instead of words.

Kieren J. McCobb is a master agent and founder of TeleConfusion Removal
Inc. He can be reached at kdotmack@ix.netcom.com.


Roundtable

On competitive carriers’ problems provisioning DSL …"Legacy central
offices have been fine tuned for voice so you have to be creative. CO-based DSL
has technological limitations, such as loop lengths and bridge taps, loading
coils and DLCs [digital loop carriers]. I haven’t found a building yet in
Atlanta that doesn’t have a DLC."

–James McKenna, president and CEO, Edge Connections Inc. (www.edgeconnections.com)

"We must have test access to the facility side of the splitter to enable
basic DSL loop qualification, testing and maintenance. The current deployment
architecture won’t scale, so we need a solution."

–Jane Wasson, product marketing manager, Turnstone Systems Inc. (www.turnstone.com)

"There are storm clouds on the horizon in the form of legislative
threats to the DSL regulatory landscape. Why care? For one, [if approved] such
legislation would send a strong negative signal to Wall Street that would make
it hard to raise capital."

–Jim Halpert, partner, Piper Marbury Rudnick & Wolfe LLP (www.piperrudnick.com)


Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 68775