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Musings on the Channel

By Peter Radizeski, RAD-INFO

Just back from Channel Partners in Vegas. Here are some ramblings from a sleep deprived mind.

Full energetic crowd in the Expo hall. Good to see.

Pioneer Telephone had a long line all day to get Joe Frazier’s autograph. I would be interested in knowing if that will convert into any real ROI. (Many didn’t even know it was Pioneer’s booth).

Thanks to TouchTone Comm for some excellent gelato!

Most energetic booth attendant: Lenny Chesal of Host.net who was happy, enthusiastic and interactive all three days. Those are the three traits needed for booth personnel. (It works best if you are outgoing and make the first contact).

Rumor from show: Nuvox is in talks to buy FDN. (It begs the question with what money?)

A surprise booth at the Channel Partner show was TalkPlus.

(Andy Abramson of VOIP Watch writes about them often). It’s one way for mobile providers to differentiate themselves in the marketplace. (Now there’s an idea.) TalkPlus allows you to add another phone number and advanced IP telephony features to your cell phone.

Joe Theismann’s Keynote was a hit with many that heard him. His point about TEAM was important because I think there is a good amount of them vs. us mentality in the Channel right now. If you can’t trust your vendor, it makes for a shaky relationship. The term “partner” is thrown around but really is it a partnership? After you book business with a vendor, you are at their mercy to install and implement in a timely fashion and to pay you per agreement. (That could be why most big direct agents are call centers – all transaction in a pump-and-dump boiler room style).

What I call the Mount Rushmore panel came after the keynote. SVP’s from XO, Verizon, Sprint and Level 3 were asked about their channel plans. Verizon did not do an adequate job of explaining why recasts were not being paid anymore. He said that it wasn’t in the budget. Huh? Do these guys understand Customer Acquisition costs are higher than customer retention costs?

Actually they don’t care because it is different silos. The metrics in the channel budget after to do with acquisition – the budget for retention is in a different silo and budget. The channel agents need to recognize that the channel budget is for NEW acquisition. BellSouth and Verizon don’t pay on recast. The channel is for customer acquisition (hunting only). It’s messed up but that’s how it is.

One of the things that the carriers have to understand is that most sales personnel are farmers not hunters. Transaction-based selling is call center stuff – even when you don’t want to admit it to upper management. If your business is mainly phone lines, LD and DSL, then your business model is probably a call center type. Even when your contract prohibits that, because door knocking is arduous and more expensive. The churn for door knocking is huge – and so is the cost of acquiring and training those people.

One other thing that the carriers need to wake up to is that rebillers pay a higher percentage and offer a low price than going direct. That’s broken, unless you are trying for the L3 model of only having wholesale customers who bill $25,000 and up.

Thanks to Virgo and the sponsors for putting on a great show. See you at the Meadowlands in September.

Peter Radizeski is president of RAD-INFO . He can be reached at peter@rad-info.net.


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