ChannelVision Magazine

CHANNEL MANAGEMENT Master theAgent Channel By Bruce Wirt Maximizing the master distributor relationship A winning channel strategy encompasses three general types of agents: national master agents, regional master agents and selling partners. The selling partner category can be broken down into many different sub- types, but from a macro standpoint these are the major categories that make up the agent channel. In recent years, more than ever, the key to building a successful channel program revolves around develop - ing a thriving master agent program. Other than regionalized on-net access providers (coax, private fiber, etc.), the telecommunications service provider of 2020 must be able to effectively scale its program at least to a national level, and as time goes on scaling globally will be increasingly important. In that new marketplace, the macro market is made up of individual markets, each with its own profile and personality. Each requires some semblance of brand recognition and the understand - ing of nuances that are unique to that area. Master agencies are set up to enable a provider to centralize its mes - sage and value proposition, then using its infrastructure and relationships to drive the message downward to indi - vidual markets. Some service providers look at mar - ket development funds (MDFs) as a form of pay to play that master agents use to pad their bottom-line profitability. While some of that may be true, MDFs can be an incredibly valuable tool to capture key relationships and brand awareness in individual markets. Where MDFs become less effective are when strategic initiatives are not defined in advance. The master agent and the ser - vice provider need to align on initiatives that aide the growth of both parties. Some of the blanket e-marketing initia - tives can be effective as an overlay, but the in-market events that connect service providers to selling partners and regional master agents are a key part to generating success. Many channel managers incorrectly think that working with a national master agent will absolve them from the task of recruiting. Nothing could be farther from the truth. Master agents are an umbrella ecosystem that makes the process of re - cruiting selling partners efficient and ef - fective. Each national master may have greater than 100 suppliers in its portfolio, each with a unique and precise value proposition. While the master agent works on its end to organize the match - making process, the supplier’s channel managers also must work on their own to maximize relationships with selling partners under that umbrella. Furthermore, because churn from contract renewal write-downs is a harsh reality of the business, master agents are fueled by the ability to add new selling partners with new relation - ships to offset existing revenue losses. An effective supplier-agent program must understand this and require its channel managers to actively recruit new partners into the master agents that they are assigned to. In my 20 years in the channel, recruiting a good partner for a master agent has always been a key component to developing a thriving business relationship. I’ve heard finance people say over the years, “Why would we pay 25 points to the master agent when we can pay 15 points to the selling partner if we recruit them directly?” On the surface, it’s a fair point; business 101 says that we should never pay more for some- thing that we can get for less. However, there is a rider to that: never pay more for something that you can get for less, unless there is a greater value to the product you are paying more for. Here’s the thing, the supplier could absolutely make 10 percent more profit on every deal sold by that small partner, and that 10 percent gets compounded for every small partner that comes to the table in the same way. Missing from that equation is the fact that finding those key partners and starting cold to - ward developing a relationship involves time and investment. Plus, all of those selling partners require attention, hand holding and education that will eventu - ally require the supplier to hire more internal staff to support them, and more contracts to administer and manage. Furthermore, more money is required to gather intelligence on individual mar - kets and how best to go about winning business in those markets. As you prepare for this year’s big show in Vegas, make sure that your agenda includes a strategy to cover all of the key areas of success: make sure you are aligned with your supplier rep - resentative on how to maximize MDF plans to meet your areas of focus (prod - uct, geography, branding or otherwise); learn the players in each area of the country that best align with the products and services you sell and the value proposition that you represent; and carve out a recruiting path that enables you to feed the master agents that you work with. This basic but crucial formula will put your program in the best posi - tion to master the agent channel. o Bruce Wirt is ex- ecutive vice president and chief business development officer at Telesystem. 68 CHANNEL VISION | March - April, 2020