Are You Working For Free?

Laura BernsteinBy Laura Bernstein

When you get a commission check from your master agent or from the carrier, do you ever calculate your true hourly wage?

Once upon a time, commissions were paid out for just the act of selling an account. The expectations were simple and straightforward. The irony was that the commissions at that time were upwards of 50 percent and there was plenty of money for the agent to pay for support if they so chose; however, most of us were still new and did not yet believe there was a need.

Somewhere along the way, all that changed. The boundaries around what was expected became unclear. Looking back, the changes were subtle. The carrier agreements made little mention of the agents new support role. It was assumed that if your customers needed help in order to sustain the relationship, you would help. The light bulb quickly went on; one throat to choke” will be my new motto. I can utilize my new support role to differentiate my business from the competition. The intentions were good; however, there were often no real systems in place behind the scenes to provide that support.

Multiple forces were now at work that would drive your hourly wage downward.

  • More sales equaled more work. Devoting more time was a necessity.
  • The need to hire employees increased and with it came a new monthly expense.
  • The carriers were struggling to pay for the rising costs of the Public Switched Network. Commissions began to fall.

The expectations from the master/carrier today are more formal, requiring us to check in” quarterly with our customers. Of course, the reality is that our role is so much more expansive. In many cases the standard 80/20 split with 80 percent going to the carrier seems not only silly, but just plain wrong. In fact, there are many agents today that receive commissions in the 7-12 percent range while they consistently provide endless hours of support for their customers.

Collectively as agents, we all agree that what is needed to support an account properly is rarely provided by the carrier alone. If we could insist that the carriers take more responsibility for serving their customers and they agreed, who do you think would pay for this new level of support? Undoubtedly, the carriers or masters would further reduce commissions or the customer would pay.

Your gross income may be $250,000 per year, but what is your true net after all your monthly expenses? The hard costs are easy to track. The soft costs, such as the time spent responding to the day-to-day issues of your customers are often not accounted for.

Support costs money and good support costs more. Its time to charge the customer and stop working for free.

Laura Bernstein is the president and co-founder of CRA Inc., a Massachusetts-based national network telecom management company formed in 1999 to provide SMBs with proactive monthly auditing, network change facilitation and contract negotiations. She is a former member of the Channel Partners Conference & Expo Advisory Board.

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