Carriers Dirty Dealing

By Josh Anderson, Founder and CEO, Telephony Partners

There has been much attention given to the question of ethics in the channel this year in particular. The Spring 2009 Channel Partners Conference & Expo included an ethics panel that packed the room, and surely everyone recalls a certain T-shirt-wearing protestor that roamed the show floor. Likewise, several agent associations are pursuing initiatives to put together codes of ethics that might serve to certify the ethical make-up, so to speak, of a given agency.

Many of these conversations focus on ethics within the agent community, but as I look back on some of the events of the year, I’m starting to think it’s not so much the agents that need to straighten up. Most of my issues involving questionable ethics don’t center on the behavior of another agent, they center on the carriers dealing dirty. Until such time as the major carriers in our industry recognize their role in establishing the ethical baseline for the channel, our efforts to promote high-minded ethics are doomed to fail.

Take, for example, the scenario of a carrier recruiting a master agent’s subagent for a direct relationship. This particular issue has been around as long as there has been a multitiered channel, but it seems like many carriers still don’t get the point. We master agents expend substantial effort and resources to recruit and develop our subagents. We introduce them to carriers. We help them to formulate sales strategies. We provide them engineering support to help them win deals. We work with them to build their agency, and when we are especially successful at that, we expect our carriers to respect our investment and refuse to engage with that subagent directly. We certainly expect that a carrier would not actively pursue that subagent.

Without a doubt, there are scenarios where a subagent outgrows the indirect relationship, but reasonable ethics dictates that the carrier coordinate with the master in advance of even responding to an inquiry by a subagent looking to cut out his master. Unfortunately, that protocol doesn’t always seem so clear to the carrier.

Another example is more insidious – carriers sitting by quietly despite knowing that a subagent is using the support of one master to sell the deal and taking the contract to another that pays more. Although some subagents may not recognize the cost of providing extensive sales support, carrier channel managers do. If a channel manager sees that a deal is quoted and worked by one master, then receives a contract for the same deal through another master, he should not hesitate to cry foul. It’s not a pleasant discussion to have, but both masters would appreciate it, and it’s quite likely that the second master would do the right thing and refuse the deal.

Perhaps the most frustrating is when a carrier refuses to protect the channel internally. This year we had a subagent that sold three deals in Texas on a particular carrier. This carrier’s protocol was such that contract requests had to go through the sales manager of the office local to the customer. Amazingly, within two days of requesting a contract, direct reps from the carrier showed up at the customer’s site to close the deal. Despite months of protest, we never were commissioned on those deals. Another similar circumstance, again with the same carrier, was not resolved until the subagent got the customer to write a letter outlining the fact that our subagent actually sold the deal, not the direct rep. We won commissions on that, but one-for-four is not a record to be proud of.

Considering that the channel is responsible, by some accounts, for up to 45 percent of telecom sales, I don’t think it’s too much to ask for carriers to step up and present agents with at least individual codes of ethics. We in the channel can put all the effort in the world into establishing ethical certifications, but what we really need is for the carriers to lead. We agents can’t play fair if carriers are gaming the system.

Josh Anderson is the CEO of Telephony Partners, a telecom master agency he founded in 2002 leveraging engineering and software expertise. He also is a member of the 2008-09 PHONE+ Channel Partners Advisory Board.

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