Follow up to a Typical Situation

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Follow up to a Typical Situation

I wrote about a typical telecom sales situation about a week ago. Khali Henderson, editor of Phone+ magazine, has an editorial that talks about this type of scenario in the Channel. The conclusion of the story happened yesterday when the client called me to ask me to meet the direct AE's rate and send him a contract. My best Indirect rate is $1500 per month higher than the direct rate. Same company. Go figure. This AE just gave away $18,000, which doesn't seem like a lot, but how many deals like that can a company take? There should be a Pricing Floor.

Some carriers have Rules of Engagement between Direct and Indirect. It's just paper. What's the punishment?

A Cisco VAR just sued Cisco over breach of contract. Cisco took a tagged deal that the VAR brought in and handed it to its other partner, AT&T. It cost Cisco $6.3M and a change to the VAR contract. These lawsuits take years and mucho money so they will be rare, but it goes back to my question: What's a Partner Worth to the carrier or vendor?

AT&T spends millions advertising its partner program, but can't bother to show up at Channel events. Mixed message much?  Verizon has thrown many agents out of its program over the years. Qwest just revamped theirs again.

I started out working with a BellSouth agency (I have never had a direct relationship with BellSouth or AT&T , which is something they can't get through their heads). BellSouth would change the compensation plan regularly. But agencies cannot change their own business plans so easily or so quickly. It sometimes feels like folly.

This is a business where you have to trust your vendor even when you know your vendor is going to trample you at some point.

UPDATE: While the Direct AE did quote way lower than me. However, after speaking with the client, they actually went with a reseller.


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