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By
Bruce
Wirt
Agent programs are the reason
suppliers are able to put up the large
numbers that shareholders crave,
as it allows suppliers to cast a wide
net in the marketplace and only pay
for performance. That same program
causes finance executives angst as
they put together their monthly recap
statements, and they dream of how
great life would be if only they didn’t
have to pay those 20 percent residual
payments that are attached to the
agent accounts.
I hear it all the time from telecom ex-
ecutives: the easiest way to meet EBITDA
goals in tough times is to chop commis-
sions from the channel partners that
helped to grow the organization in the first
place. Agents that were once titans but
have since slowed in production are for-
gotten faster than yesterday’s junk mail.
While I can’t provide a magic so-
lution that works across the board, I
can offer up a few things to consider
when jumping into a relationship with
a service provider. This comes from
years of executive management on the
supplier side and hundreds of conversa-
tions with peers in the industry. Think
about these things when managing your
supplier relationships and it may save
you heartache and pain years later.
1. Be a partner.
Too many agents
take for granted that the service provider
is actually responsible for providing the
service that we are selling to the custom-
er. Agents sometimes take the position of
dominance in the relationship, looking to
restrict customer contact by the provider,
talking down to the professionals that
support their efforts, and forcing providers
to participate in “pay for play” programs
without reciprocation.
Suppliers remember this abuse when
making the final decision to terminate a
partnership. An agent that produces less
but walks hand in hand with the supplier
is more likely to survive a termination
wave by a supplier. You don’t want to be
in the position of being somebody’s re-
venge dish for years of abuse.
2. Don’t negotiate in bad faith.
Ev-
ery agent out there presents themselves
as the best in the world when it comes
time to negotiate commissions. “I have
so much business to bring you, I deserve
to be paid at the highest level,” knowing
that there may be no intention to do any-
thing other than a few deals a year.
Even the best written contracts can be
torn up in times of trouble, and even if the
agent wins a court battle with a supplier, of-
ten times the cost and time to do so will nev-
er make up for the money to be gained. Be
honest with the provider, and ask that they in
turn do business in good faith with you.
3. Communicate.
That goes for both
with your supplier and with your custom-
ers. Have a plan to support your custom-
ers, and make sure that it is aligned with
the personnel responsible for supporting
those customers at the supplier. If you are
working on a revenue write-down contract
renewal, while the supplier’s account
manager is trying to up-sell the customer
on a 200 percent upgrade, everybody los-
es. Understand the goals of every party
in the relationship and work together to
make sure everybody is happy in the end.
Surviving the Cut
How to avoid losing your residual
commissions when suppliers start cutting
L
et’s face it: telecom suppliers (CLECs, ILECs,
resellers, or virtually any other type of service-based
organization around) both love and hate their agent
programs at the same time.
channel management
Channel
Vision
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March - April, 2017
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